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The Worst Investment Advice I Ever Heard–Everywhere

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My financial story creates an interesting juxtaposition, as I recently shared with Steve Chen on the NewRetirement Podcast. On one hand, my wife and I did many things well with our money. We achieved financial independence quickly, allowing me to retire last fall at 41 years old. 

On the other hand, we made investing mistakes that in retrospect could only be described as pure stupidity.

The Good

My wife and I are reasonably intelligent, hard-working people. Both of us are first generation college graduates from working class families. We each earned three college degrees and had professional success.

We were financially savvy enough to get out of debt quickly, pay off our mortgage in seven years, and save approximately half our income throughout our careers. Throughout the accumulation phase, we managed to maintain our high savings rate while living lives filled with adventure, travel, and amazing experiences while we were earning normal professional salaries. 

The Bad

We began investing with a financial advisor who we blindly trusted, handing him large sums of our hard earned money. We later learned we paid approximately eight times more in hidden fees than we thought we were, costing us thousands of dollars each year. Following horrible advice led to costly tax planning blunders that cost thousands more annually. This combination of excessive fees and unnecessary taxes cost us nearly $20,000 in just the last year we used his services.

The Ugly

We weren’t ignorant just once. We willingly followed this advice for nearly a decade. Considering lost compounding over decades, this was a million dollar mistake.

How did this happen to us? It was a direct result of following what I now consider the worst investing advice you can get. Unfortunately, I hear and see it often.

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