24 Outdated Financial Advice That No Longer Make Sense
Finance changes, but some advice sticks around like an old myth that refuses to die. Bad financial takes get passed down like family recipes, even when they don’t work anymore.
I retired early because I ignored a lot of these so-called “rules.” I wrote this article so you can ignore them too.
In this article, I will break down the advice that no longer makes sense and replace it with what actually works. Some of these ideas were once useful, but today? They’ll hold you back.
People who listen to bad advice make bad mistakes. Keep reading, so you don’t.
Table of Contents
“Credit Cards Are Bad. Avoid Them.”
Credit cards aren’t the problem. People who use them irresponsibly are. Anyone saying credit cards are dangerous is really just saying they don’t trust themselves with money.
Used correctly, they build credit, offer fraud protection, and rack up rewards that put real money back in your pocket. I’ve used credit cards for years and have had an 800 credit score for more than half my life.
The key isn’t avoiding them, it’s paying them off in full every single month. The real financial disaster isn’t credit cards, it’s cash sitting in a checking account doing nothing while you miss out on free travel, cashback, and purchase protection.
If you’re still living in fear of a piece of plastic, it’s time to grow up financially.
Expert (With 820+ Credit Score) Addresses 10 Credit Card Myths
“You Need a 3-6 Month Emergency Fund.”
The idea of an emergency fund isn’t wrong, the problem is blindly following an arbitrary number. The old advice says three to six months of expenses, but that number ignores your actual risk factors.
I retired early because I ignored generic financial advice and focused on my situation. My emergency fund wasn’t built around a monthly expense multiplier. Instead it was backed by my reality and the risk of losing income.
My method: I tracked trailing expenses over 24 months, factored in planned major replacements, and kept liquidity to cover real risks.
Financial security isn’t about following a rule, it’s about making the right call for you.
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“Roth IRAs Are Always Better Than Traditional IRAs or 401(k)s.”
This one gets pushed hard, but it’s not the universal win people think it is. The main selling point? You pay taxes now, then get tax-free withdrawals later. That sounds great, unless your tax rate drops in retirement, which is exactly what happens for most people.
I see people blindly maxing out a Roth without even considering if it makes sense for their future tax situation. A Traditional 401(k) or IRA lets you take deductions now, grow tax-deferred, and pay taxes later when your income is lower.
That’s exactly how I played it, and it worked. Roths aren’t bad, but they’re not automatically better either. The real key is knowing when one makes more sense than the other for you.
Why a Roth IRA Isn’t Always the Best Choice: A Campfire Conversation
“Put 20% Down on a House.”
People love repeating this one, but they never stop to ask why. The idea is that putting 20% down saves you from paying Private Mortgage Insurance (PMI). Here’s the thing, PMI isn’t the monster people think it is.
It’s temporary, it’s small, and in many cases, it lets you buy a home sooner. Waiting years to save a 20% down payment means missing out on appreciation, equity building, and locking in a fixed-rate mortgage before prices climb higher.
I’ve bought properties with little or no money down, and guess what? Those homes built wealth a lot faster than if I had waited. The obsession with avoiding PMI is costing people way more than just paying it for a few years and moving on.
Oh and that 20% down number? That is to protect the lender. It isn’t to protect you. It’s so if you foreclose, they can get some money back.
Related Video: If I Listened To “Good Advice,” I Would Not Have Retired At 42
“Private Mortgage Insurance (PMI) Is Bad.”
This one ties directly into the last point. The reality? PMI is just a cost of doing business. It’s not some lifelong penalty, it drops off when you reach 20% equity. I’ve seen people delay buying a home for years just to avoid PMI, while home values kept climbing out of reach.
Imagine missing out on tens of thousands in home appreciation just to avoid a $100 PMI payment for a couple of years. That math doesn’t make sense. PMI isn’t ideal, but it’s temporary.
If paying it gets you into a home sooner and allows you to start building equity now, it’s worth it. The sooner people stop treating PMI like some financial curse, the better off they’ll be.
How To Get Rid Of PMI Early: I’ve Done It Many Times
“Discount Points on Mortgages Are a Scam.”
Another common one, and again, people repeating this don’t understand how money works. Discount points let you pay upfront to lower your mortgage rate. The key is knowing when it makes sense.
If you’re planning to stay in a home for the long run, lowering your rate can save you tens of thousands over time. I don’t just look at the short-term cost, I do the math on the break-even point.
If I’m going to hold a property for a decade or more, I want the lowest rate possible. Writing off discount points as a “scam” is exactly why so many people get stuck with bad loans that cost them far more in the long run.
Paying Mortgage Discount Points: A Powerful And Misunderstood Option
“30-Year Mortgages Are Always Better Than 15-Year Mortgages.”
The 30-year mortgage is popular because it keeps payments low, but low payments don’t mean you’re making the best financial decision. A 15-year mortgage builds equity faster, saves hundreds of thousands in interest, and gets rid of debt sooner.
I took the 15-year route on properties because I didn’t want to drag payments out forever. People argue that the extra cash flow from a 30-year mortgage can be invested elsewhere, but most don’t actually invest the difference, they just spend it.
Paying off a house in half the time means lower overall costs, more equity, and financial freedom sooner. That’s why it was my move.
How To Pay Off A Mortgage Early (I’ve Done It Many Times)
Why A 15 Year Mortgage Is Smarter Than A 30 Year Mortgage
I’m going to beat a dead horse with the 15 year vs 30 year mortgage debate.
Thinking about a 30-year mortgage? Here’s why you should only budget for what you can afford on a 15-year mortgage: On a $300,000 loan: A 30-year mortgage at 5% interest will cost you $579,767 over its life. That’s nearly 2x the home’s price!
A 15-year mortgage at 4% interest will cost you $399,431—saving $180,336 in interest.
The word “mortgage” literally translates from Latin to “until death.”
Don’t let it live up to its name. Budget for 15 years, not 30.
“Only Contribute to Your 401(k) Up to the Company Match.”
One of the worst pieces of advice out there. People act like once they hit the company match, they should just stop and throw the rest into a taxable account. That’s nonsense. A 401(k) has massive tax advantages that compound over time.
I maxed out my 401(k) every year because I wanted every tax break possible, and it paid off. People underestimate how much taxes eat into their returns, and that’s why they stay stuck.
Maximizing tax-advantaged accounts is one of the fastest ways to build wealth, yet people let bad advice stop them before they even hit their full potential.
Related Video: The Top Mistakes People Make with Their 401ks and How to Avoid Them
“Stocks Are Too Risky, Stick to Bonds.”
Bonds are safe, but safe doesn’t build wealth. Long-term stock investing beats bonds every single time. The problem isn’t that stocks are risky, it’s that people don’t know what they’re doing.
The market rewards patience, not panic. I stuck with stocks through the crashes, corrections, and media fear-mongering, and guess what? It worked.
Bonds are fine for stability, but if the goal is financial freedom, letting fear push you into low-return investments is a guaranteed way to retire later than you need to.
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“Day Trading Can Replace Your Job.”
Most people trying to day trade are playing a losing game. The reality? The ones making money are massive firms with better tech, faster execution, and an army of PhDs.
Regular investors trying to outguess the market get crushed. I’ve seen it over and over, people jumping in, thinking they’re smarter than the system, then watching their money disappear.
Real wealth comes from long-term investing, not jumping in and out like a gambler at a casino. The ones getting rich off day trading? The brokers, not the traders.
“Don’t Take on Any Debt.”
Debt isn’t the problem, stupid debt is. Credit card debt, car loans for luxury vehicles, financing furniture, those are mistakes. But avoiding all debt? That’s just as bad.
The right kind of debt builds wealth. I used real estate leverage to grow faster, and I wasn’t afraid of borrowing when it made sense. The key is knowing when debt is an asset and when it’s a liability.
The people screaming “debt is bad” are often the ones who don’t understand how to use it.
23 Debt Payoff Mistakes That May Keep You Broke (And How to Fix Them)
“You Shouldn’t Buy Used Cars.”
A brand-new car loses value the second it leaves the lot. Paying thousands more just to say it’s “new” is a terrible financial move. I’ve bought used cars that lasted for years, saved money, and let me invest the difference.
The ones pushing for new cars are usually dealerships trying to pad their bottom line. Cars are not an investment, they’re an expense.
Treating them like a status symbol is how people stay broke while convincing themselves they’re doing well.
“Crypto Is the Future, Invest Now!”
People act like Bitcoin is going to make them rich overnight. The truth? It’s not an investment, it’s speculation. Real investments generate cash flow. Crypto doesn’t.
I don’t bet on hype. If something requires blind faith instead of actual financial fundamentals, I don’t touch it. The crypto space is filled with people promising insane returns, but most of them are just selling a dream while cashing out their own holdings.
The ones making real money? The exchanges and influencers convincing others to buy in.
I Never Do These 14 Things, And Thats Why I Was Able To Retire At 42.
“You Need to Cut Out All Luxuries to Get Rich.”
The whole “skip your daily coffee” advice is garbage. No one retires early because they stopped drinking lattes. Wealth doesn’t come from pinching pennies, it comes from increasing income and investing wisely.
I spent on things that made sense and cut the ones that didn’t. The trick isn’t eliminating everything fun, it’s being smart about where money goes.
The real problem is people focusing on saving pennies while ignoring the thousands they could be making elsewhere.
“You Need a High Salary to Build Wealth.”
One of the biggest lies out there. I didn’t make $50k a year until I was in my 30s, and I still retired early. Wealth isn’t about how much you earn, it’s about how much you keep and what you do with it.
Plenty of people make six figures and still live paycheck to paycheck. I focused on saving aggressively, investing early, and avoiding lifestyle creep. High earners can still be broke, and modest earners can retire early if they play the game right.
Anyone telling you otherwise doesn’t understand money.
I Became A Millionaire In my 30s: 25 Things I Know, That Most People Never Figure Out
“Social Security Will Cover Your Retirement.”
Counting on Social Security as your main source of retirement income is a losing strategy. It was never designed to replace a full paycheck, yet people act like it’s a reliable plan.
With rising costs, an aging population, and ongoing changes to benefits, expecting a government check to cover everything is unrealistic. Retirement should be built on investments, savings, and income streams that put you in control, not a system that might not hold up when you need it most.
A good rule? Treat Social Security like a bonus, not the plan.
“Life Insurance Is a Must-Have Investment.”
Life insurance is protection, not an investment. The financial industry pushes whole life policies as a way to “build wealth,” but the returns are weak, and the fees eat into any potential gains. Term life insurance does what it should, provides coverage when dependents need it, nothing more.
The smarter move? Keep insurance separate from investing. Put money where it actually grows instead of tying it up in a policy that benefits the company selling it more than the person buying it.
Insurance Is Expensive: 20 Simple Tricks You Can Easily Do to Cut Costs
“The Best Time to Buy a House Was Yesterday.”
The idea that you have to rush into buying a home is terrible advice. Buying at the wrong time or before being financially ready locks people into mortgages they can’t afford and homes that don’t appreciate the way they expected.
Interest rates change, markets shift, and property values don’t always go up. The right time to buy isn’t when some guru says so, it’s when the numbers make sense for your income, savings, and long-term stability.
The ones who jump in just because “real estate always goes up” are often the ones struggling later.
When Is The Best Time To Buy A House? A Real Estate Pro Answers.
“Cash Is King.”
Letting cash sit around doing nothing is a guaranteed way to lose money. Inflation eats away at its value every single day, which means every dollar sitting in a savings account is slowly shrinking.
Having enough for emergencies and short-term needs makes sense, but stacking piles of cash instead of putting it to work in assets that grow is a mistake. The wealthy don’t hoard cash, they make sure it’s always moving, compounding, and building more wealth.
The real king is invested money.
“Paying Off Your Mortgage Early Is Always the Best Move.”
Owning a house outright sounds great, but sinking every spare dollar into paying off a mortgage isn’t always the smartest strategy. A low-interest mortgage means extra money could be working harder somewhere else, like in investments that bring higher returns.
Financial flexibility beats being house-rich and cash-poor. The key isn’t eliminating debt at all costs, it’s knowing when your money can be doing something better than just sitting in home equity.
My Mortgage Is 2.3%, I Have Money In The Bank. Should I Pay It Off?
“Gold and Silver Are the Best Investments for Security.”
Precious metals get hyped up every time there’s economic uncertainty, but they don’t generate cash flow, don’t pay dividends, and don’t compound over time. Sitting on a pile of gold bars won’t build wealth.
The price goes up and down based on fear, not fundamentals. There’s a place for gold in a diversified portfolio, but treating it like the ultimate safe haven keeps money stuck instead of working.
“Renting Is Always Throwing Money Away.”
The idea that renting is a waste of money ignores reality. Homeownership comes with hidden costs, maintenance, and market risks that don’t always work out in the buyer’s favor.
Renting offers flexibility, lower upfront costs, and sometimes even a better financial position if it allows for investing elsewhere. The real waste is stretching a budget too thin just to “own” something that ends up costing more than expected.
There’s no shame in renting if it keeps financial options open.
I Retired Young: Here’s Why I Love Investing In Real Estate (Even In Today’s Market)
“All Debt Should Be Paid Off Before Investing.”
Paying off debt feels good, but delaying investing in order to do it isn’t always the smartest move. High-interest debt should go first, but low-interest loans don’t always need to be rushed. Every year money isn’t invested is a year of compounding lost.
Balancing both, paying down bad debt while building assets, is the smarter play. The ones waiting to be completely debt-free before investing are often the ones playing catch-up later.
Smart Advice That Actually Works
Bad advice keeps people stuck, working longer than they need to. The rules that worked decades ago don’t always hold up in today’s economy, and sticking to them blindly can do more harm than good.
The ones who get ahead are the ones who question bad advice, think critically, and make money work for them instead of against them. Financial success isn’t about doing what everyone else says, it’s about doing what actually works.
Ignore the noise, focus on the numbers, and build the kind of future that puts you in control.
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