By Jonathan Clements
Today’s financial advice: Just say no.
You can probably think of instances when an individual ought to ignore one or two of the suggestions below. Still, I’d argue that, if most folks followed these rules, they’d be far better off financially. Want a brighter financial future? Here are 51 things you shouldn’t do:
1. Don’t buy cash-value life insurance.
2. Don’t envy hedge fund investors.
3. Don’t write frequent checks against bond funds held in a taxable account.
4. Don’t carry a credit card balance.
5. Don’t invest in high-turnover stock funds.
6. Don’t fund custodial accounts if your family hopes to receive college financial aid.
7. Don’t trust brokers when their lips are moving.
8. Don’t keep a heap of money in your checking account.
9. Don’t assume the premium on your long-term-care insurance is fixed for life.
10. Don’t forget that a high potential return means high risk.
11. Don’t buy a home if you think you’ll move in the next five years.
12. Don’t invest 100% in stocks — or 100% in bonds.
13. Don’t die without a will.
14. Don’t buy trip-cancellation insurance.
15. Don’t retire with debt.
16. Don’t buy initial public stock offerings.
17. Don’t throw away the advantages of index funds by actively trading them.
18. Don’t claim Social Security at age 62.
19. Don’t buy a tax-deferred annuity in an individual retirement account.
20. Don’t apply for credit too often.
21. Don’t use your taxable account to buy high-yield junk bonds or real estate investment trusts (REITs).
22. Don’t opt for low insurance deductibles.
23. Don’t fully fund your 401(k) if you smoke, drink heavily and never exercise.
24. Don’t buy any fund with annual expenses above 0.35%.
25. Don’t instinctively hang on to losing stocks.
26. Don’t be surprised if every solution offered by an insurance salesman involves insurance.
27. Don’t assume you, or anybody else, are smarter than the market.
28. Don’t get your stock picks from your brother-in-law, your spam folder or the television.
29. Don’t purchase life insurance if you don’t have financial dependents.
30. Don’t pay a 6% real estate commission.
31. Don’t opt for the extended warranty.
32. Don’t invest heavily in your employer’s stock.
33. Don’t purchase a house that’s bigger than you really need.
34. Don’t day trade.
35. Don’t have children if you hope to retire early.
36. Don’t read anything into short-term market movements.
37. Don’t buy investments without first settling on your financial goals.
38. Don’t use more than 10% of the credit limit on your credit cards.
39. Don’t buy an individual bond without figuring out what markup you’re paying.
40. Don’t forget about inflation.
41. Don’t buy an investment unless you’d be happy to hold it for 10 years.
42. Don’t assume a commission-free stock trade is cost-free.
43. Don’t buy based on past performance and expect it to persist.
44. Don’t leave your ex-spouse listed as your 401(k) plan’s beneficiary.
45. Don’t take out a large mortgage just for the tax deduction.
46. Don’t keep money in the stock market that you’ll need to spend within five years.
47. Don’t buy variable annuities.
48. Don’t assume a high yield means a high return.
49. Don’t pay bills late, especially loans and credit card payments.
50. Don’t expect stocks to earn 10% a year, even over the long run.
51. Don’t lend money to family members if you’ll need it back.
Jonathan Clements is the former personal-finance columnist of The Wall Street Journal and author of the «Jonathan Clements Money Guide 2016.» Follow him on Twitter and on Facebook.