Avoid Big Financial Mistakes

    Published: 06-16-2009
    Views: 8,402
    Financial Advisor Ric Edelman discusses how to avoid big financial mistakes.

    Ric Edelman: Hi! I am Ric Edelman. You probably know the basics about money, don't spend more than you make, save for the future, don't buy more house than you can afford, these are some of the more obvious money mistakes, and then in the series we are going beyond the obvious to talk about the really bad mistakes you might not even realize you're making.

    Number 1 biggie: Debt. We all know debt is bad. We try to rationalize reasons though, why, are debt is okay? One of my advisors used to work at a firm where their boss told them that they should always spend more than they earned; he figured they'll be so hungry for cash they would work harder. Imagine a place where even the advisors can't keep within their own means. That's one of the reasons my colleague now works for me instead of them.

    Another advisor on my team had a client with 26 credit cards and $40,000 in debt. She thought she was clever, because she kept transferring her balances to 0% interest rate cards. She thought she was getting free money plus airline miles. We set up a spreadsheet to show her how much she was really paying for her free money. Well, today she is down to two cards and she'll be debt free next year. Who knows how much debt she would have had; she hadn't realized the mistake she was making.

    You want to see more examples of big financial mistakes, check out my other videos, including one where I will show you how well-meaning people can give you really bad advice.