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LIke - never buy a home unless you are going to live in it for more than 5 years. We bought a home once and lived in it for 2 years and it went up $150,000 before we ended up moving and having to sell it.
I wasn't given this advice, but I hear it all the time, and that is to start saving/investing every penny you can as early as you can. I went the other route and rather than investing, I paid off all my debt as fast as I could (student loan, car payment, credit card). When the market crashed and people lost 50% or more of their investments, I had just finished paying off all my debt, and was just starting to invest, so got into the game at bargain prices.
Also, I hear this one a lot too: Buy as much house as you can afford, because you will grow into the need for it. Horrible advice in my opinion. I bought as little house as I needed, and have loved the small payments.
Last one sounds pretty stupid... but it depends. If you're of moderate means and planning on having a family and the most you can afford is a modest 3bd house in good school district a ways out, probably a good idea. Better than buying the 1bd condo you can more easily afford and then having to sell in 2-3 years because it's too small when the first kid pops out.
Best financial advice I didn't follow was don't buy a new car straight out of college. I ended up doing that (not exactly by choice) about 6 months after graduating when my old car was totaled. I was busy with work, had discretionary income, used market in '08 was pretty sad and it was the height of Carmaggedon so there were really good deals on new cars. Worked out fine, but I did spend about $10,000 more than I initially planned on for a used car.
We've had two long term one year adjustable rate mortgages tied to two different indexes, and each time our mortgage payments have gone DOWN yearly -- and when they haven't we went fixed. Now we're at near historic lows... but we're sitting on it for a while.
Aside from living below your means, I don't think any financial "saws" are written in stone.
Years ago money magazine challenged us to do an article and to let their team of pros see if they could improve on my own planning and investing.
They said i needed more small cap stocks in my portfolio. Well that was right before our big 2008 drop.
I was down only about 18% instead of 45% or 50%
Short memories. Everyone got spooky on blue chips since they got wtf stomped during the 2000-2002 period where the S&P 600 barely budged. Also, while they do have a higher (arithmetic mean) return, a lot of that is just due to the volatility. No one with a brain really looks at arithmetic means anyway, and S&P 500/600 are closer in real returns.
On the other hand, short memories.
iShares 600 is up from $34 to $86 since the trough days. (250%)
DOW is up from $6,226 to $14,818. (230%).
For someone like me who isn't anywhere near retirement, as long as you're not doing what most active investors do and buy high and sell low, losing 50% in '08 wouldn't really have devastated you. Not that small caps lost all that much more than blue chips in '08 anyway. But that's just small cap/large cap. It's not the only things out there.
LIke - never buy a home unless you are going to live in it for more than 5 years. We bought a home once and lived in it for 2 years and it went up $150,000 before we ended up moving and having to sell it.
That's called a windfall.
The basic advice still stands.
When I moved back to the NoVa area in late 2006, I was looking for where to live. I was young, single and wanted flexibility, so I was looking at renting, but my dad tried to convince me to buy a small townhouse out in Centreville (medium-far out suburb). Since I didn't have 20% saved up yet I was quite hesitant about PMI, but he was like "Oh, you don't need 20% these days, and besides, at the rate values are increasing, it will go away real soon anyway".
Well thankfully I didn't listen, since I would probably be underwater now, and I ended up buying a much better place in 2010. I also probably wouldn't have met my wife had I moved out there back then.
housing prices always go up ( I was a signature away from buying a place in 2005 ish). You need to go to college. Albeit this was a bit of a bigger gamble and could be up for debate, but it it has worked out thus far IMO
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