By Josh Katzowitz, WCI Content DirectorMaybe your parents meant well when they told you that day trading could be a good idea. Maybe your attending thought they knew what they were talking about when they advised you to buy that budget-stretching house during your internship year. Maybe your financial advisor didn’t really have your best interests at heart when they told you that procuring permanent life insurance was a winning strategy.
People are always looking for advice about how to save, invest, and spend their money. Sometimes they turn to The White Coat Investor. Sometimes they open their social media apps. Sometimes, they lean on artificial intelligence. And while you can find advice about what to do with your money in many corners of the internet and in the real world, much of that advice is, to put it nicely, flawed. And some of it outright sucks.
But it’s always fun, once we’re a little more financially literate, to look back on the advice we were given and tell the tale of just how bad those suggestions might have been.
At WCICON25 (which you can watch in our Continuing Financial Education 2025 course), I talked to a number of attendees and speakers and asked them about the worst advice they’d ever received. I’ve kept them anonymous so they could be as honest as possible.
Here’s what they said.
- Buying Enron stock. This was when I first graduated from college. It was still relatively early in my financial education. One of the first things I asked one of the partners, one of the mentors I had, [for advice], he said, “There’s this company called Enron. It’s doing really well. We have some consulting projects there. We know what their infrastructure and vision look like. It’s a great company to invest with.” This was a leader, a mentor. This was 1999. I purchased some of it. They went away in 2001. I lost all of it. I didn’t have a ton of money in it, but it was all gone. I learned to diversify. Just because someone is an industry leader doesn’t mean they understand finances.
- The worst was none, not getting any advice. I went almost 13 years of practice without anywhere to go. No. 1, The White Coat Investor didn’t exist. No. 2, I had the lack of knowledge to maximize my corporate match into my 401(k). It was several years where I was doing like 1%.
- My first managing partner basically advocated that I use his [company redacted] agent as a financial advisor. I actually declined to do that. I got a term life insurance policy from him, but I never got into the actual financial planning. I just got a weird feeling, like this doesn’t match.
- I bought a little condo in med school for me to live in. I was moving to residency, and I didn’t want to be a remote landlord. The realtor we were working with–this was just after the 2008 real estate crash–said we should take a cash offer for it. Looking back, if we had held that property and let it generate some rental income, it would have been several hundred thousand dollars, not just in appreciation but in cash flow from the rent.
- Luckily, it came at a time when I already knew better, but in March 2020, when the market was crashing, a co-worker said, “Put everything in cash.” That was right after I first attended The White Coat Investor conference, and so I knew better. He left his stuff in cash when the market kept going up and up and up. Then, he felt paralyzed about getting back in the market. Then, he hired somebody to take care of his money, because he was too paralyzed to do anything with it.
- This was direct advice from my dad that impacted me. He was sold a whole life insurance policy from somebody in my church. My dad was a pastor. He put all of his retirement money in it. I was a teenager back then. Once I learned the basics of what happened in my 20s, I got really pissed off. We’ve corrected it since then. I read a book when I was a senior in college—Mutual Funds for Dummies—and my eyes were opened. At this point, I manage all his finances.
- To buy a house when I was a medical student. It was stupid. We should have been told to rent a freakin’ apartment. It appreciated $3,000 in four years, and the transaction costs were way more than that.
- When I was a dental student, my wife and I were told to buy permanent life insurance. Somebody had gotten access to the dental school, and they came for a lunch-and-learn and offered free consultations with our spouses. We went down to their office, and they gave us the spiel. “You can have an investment tool that also provides insurance and safety for your family. There’s limited downside. It’s this guaranteed risk-free investment, and it can solve all your problems.” I bought it. I got rid of it like two weeks later. I had a 30-day window. It felt weird. I didn’t learn that the product was crappy; I just realized I had been sold something.
- It was not so much advice but watching my parents and in-laws. It’s an immigrant mentality of save, save, save, save. It was to the point where there was never any real enjoyment. There’s always a scarcity mindset. I had a family member tell me that you should sock money away from your husband.
- It’s people just saying to you, “Oh, if you make good money, you’re going to be OK.” To me, that’s doing such a disservice to people. Just because you make good money, it doesn’t mean you’re going to be OK, and it doesn’t mean you’re going to make good money in perpetuity. If you don’t have some kind of a goal or plan or a loose road map, then you burn out. That’s what happened to me. I got married later in life. I was already a staff radiologist. I wasn’t such an extravagant spender that I was burning through all my money. I knew enough to save responsibly. But you just keep working, and you worry about if you’re spending too much or you’re not saving enough. If you haven’t planned it out, you don’t know, and it’s just pervasive stress. To say, “Don’t worry, if you spend too much, you can make just more,” it doesn’t work that way.
- It was probably from my dad. It was to buy the big house when I got out of fellowship. “You worked hard and sacrificed. You deserve it.” I bought it. That job didn’t work out, and then I had to sell the big house. Of course, I lost money on [it]. I wish I was plugged in to this community when I was a resident. I would have made much different decisions.
- Mine is shockingly bad. I had an attending tell me that residency was extremely stressful and to realize I was going to be making quadruple the money when I came out residency and that I should get a credit card and reward myself to decrease stress. I got the credit card, and it amounted to $10,000 worth of credit card debt. I could pay it off really quickly after I became an attending, but it was really bad advice.
- To only buy something if you can buy it up front in cash. With my family, there is a scarcity mindset to only buy a house or a car if you have the cash. In hindsight, it’s like, actually pricing a mortgage with a 3% interest rate isn’t a bad deal.
- I bought term life insurance and then converted some of it to whole life. In residency, [company redacted] came to our program, and I got the disability insurance. I’m in that whole life thing—what they say not to do. It was through my residency, so it felt safe. I still have it. I’ve put so much into it already.
- Our parents were really thrifty. They saved everything. The worst piece of advice was saving with a scarcity mindset. Even now, my mom is like, “Don’t go on vacation; don’t do this. Save, save, save.”
- My parents didn’t think I should do investment stuff. They’d say, “Hold on to the money and don’t put it into a retirement account.” They were always so against retirement accounts, for some reason. They thought I should put it in the bank.
- My parents bought me a car in my first year of medical school. It was awesome. It was a 2003 Mitsubishi Mirage. They probably paid a couple of grand or something for it. Fast forward to the end of my first year of residency. The car was getting close to 100,000 miles, and my dad was like, “You need a new car. You’re a doctor.” He was going to go with me to a car dealership to negotiate for me. I ended up walking out with a brand new Honda Accord. It was a terrible financial move. I went from having no car debt, and I now have a brand new car. What’s even worse was the following year when I got one of those flyers in the mail that showed the brand new model of the Accord. “Why don’t you just trade in your old one to get the new one?” No one told me that this was me falling to a scheme of marketing. I showed up at the dealership, and I walked away with another new model of a Honda Accord. I was already upside down on my loan. When I looked at the paperwork, it was all repackaged into a new loan. The car was worth about $27,000, and I owed $32,000. It was a new car disaster.
More information here:
What’s Been Your Biggest Splurge Recently?
What We Learned Financially from Our Parents and How We’re Passing It on to the Next Generation
Money Song of the Week
Thirty years ago this Tuesday, Blind Melon singer Shannon Hoon died of a drug overdose. He was 28 years old, and he had such a large chunk of his career in front of him. Unlike many of the most famous members of the so-called 27 Club (Kurt Cobain, Jimi Hendrix, Jim Morrison, Janis Joplin), Hoon’s death in his late 20s didn’t catapult him into post-mortem superstardom, and it didn’t make him a rock legend.
Instead, if you know Blind Melon, it’s probably because of the band’s 1993 hit, No Rain, aka the music video that featured a girl in a bee costume. But the kids today don’t wear Blind Melon T-shirts (like they do Nirvana shirts), and nobody ever made a movie about him (like they did with Morrison). Instead, Hoon and the band’s enormous creative talent long ago exited the cultural zeitgeist.
To celebrate his life three decades after it ended, let’s take a listen to the first song off Blind Melon’s immensely enjoyable 1995 album Soup. This tune is called Galaxie, and it’s in the same vein as many of Hoon’s songs that deal with depression or addiction or, gosh, even drowning your own kids in a lake. This song is almost assuredly about drugs, but another interpretation is that no matter how well-off the character becomes or how many expensive cars he owns, he’ll always feel more at home in his beater. Maybe it’s because he preferred getting high in his Ford Galaxie, or maybe it’s because he, even after becoming a rock star, doesn’t want to forget his more humble roots.
As Hoon sings as the song nears its end,
“But I keep on a-coming here and standing in this state/Oh, and I'm always reassured the situation's getting carried away/But I'm not appalled or afraid/Verbal pocket play/Is as discreet as I can muster up to be.
Because the Cadillac that's sitting in the back/It isn't me/Oh, no, no, no, it isn't me.
Oh, no, no, no it isn't me/No it isn't me/No it isn't me/No it isn't me.
No, no it isn't me/No it isn't me/In my Galaxie.”
That live performance occurred about five weeks before Hoon’s overdose. Perhaps, in retrospect, that’s what makes the performance all the more powerful.
Listening to Blind Melon’s Soup album can be a melancholy experience because of the songs’ subject matter, because we know Hoon died less than two months after the album was released, and because we don’t know what heights the band could have reached (much in the same way we’ll never know about what else Nirvana or Hendrix would have produced).
But you have to admire Hoon’s passion and his search for truth and self-reflection—even as he struggled with addiction.
As Blind Melon bassist Brad Smith said in a 2013 interview with Song Facts,
“Shannon, I think, meant every word that he said on the Soup record, and that's why it's maybe even more critically acclaimed than our first record. Our first record [with No Rain] sold many, many more units than our second record, but the second record had a lot more critical acclaim to it. People recognize it as the truth and pure. And I think that's the earmark of a great record.”
And the earmark of a talented, creative but ultimately troubled singer who the rock world lost far too soon.
More information here:
Every Money Song of the Week Ever Published
YouTube Short of the Week
I’m certainly not judging, but $1,000 per month on skin care/massages and $900 per month on whiskey/cigars are fascinating budget lines.
What's the worst advice you ever received? Did you act on it? How much did taking that advice affect you financially?
[EDITOR'S NOTE: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]
I am not sure if I agree with getting in to ‘an acceptable’ credit card debt during residency is a terrible idea. One of my personal regrets was not able to go back to visit my aging parents who live overseas for 8 years. Visiting them and the entire extended family would have been pretty costly for a resident in HCOL program. I could have paid off the 10 or 15k easily with attending income. Don’t forget the season of life.
Funny- I read the entire list, and this one also stuck out to me the most as not-so-bad bad advice.
I think you are referring to this: “ Mine is shockingly bad. I had an attending tell me that residency was extremely stressful and to realize I was going to be making quadruple the money when I came out residency and that I should get a credit card and reward myself to decrease stress. I got the credit card, and it amounted to $10,000 worth of credit card debt. I could pay it off really quickly after I became an attending, but it was really bad advice.”
At the end of residency I did exactly this. I maxed out a Bank of America credit card with an introductory 0% apr with $20k. It helped pay for fellowship interviews, meals during the several months I was cramming for my boards, and lots of other stuff. Back then, it wasn’t hard to sign up for a second 0% intro card to without a fee to lengthen the free loan. Within a few months of becoming an attending, I paid it off completely and at the end paid $0 on interest.
Worst advice. People with YOLO advice and attitude. Living a lavish lifestyle with nothing saved. Forced to work into their 60’s because they can’t afford to stop working. These are doctors and dentists, family members I know.
Our worst financial advice: The inconsistency of a financial advisor’s advice saved us. He was a charming fella who talked to us about money cycles and how every 80 years there was another recession etc and really talked a good talk. Explained he was going to do AUM for 40 families with half a million and that would be enough money for him to live on at 1% or whatever it was, not an unreasonable AUM fee. We were to liquidate everything including our IRAs, put it into his firm’s funds and then he would turn that money into however much he calculated over the years for us to retire on. The math seemed fine and then I realized he hadn’t considered that we would have to pay taxes liquidating the Ira’s thereby decreasing what we put into his company by that not insignificant amount. Had he included that in his calculations and still convinced us that might be our financial plan to this day.
I think I had already read the only investment guide you’ll ever need which didn’t quite warn about this exact issue but white coat investor wasn’t even in med school yet at that time. I didn’t think the AUM scheme was dodgy, I just thought that he was on inadequate mathematician for us to trust our money to. For some reason later than that perhaps because he’s younger my little brother an actuary directed me towards vanguard and that has been our financial story since, along with me doing my own spreadsheet plotting of how much we ought to save in order to achieve our goals.
Jordan Frey has an excellent blog post today that is very similar https://prudentplasticsurgeon.com/the-most-dangerous-place-for-your-wallet-isnt-wall-street-its-the-doctors-lounge/
“The most dangerous place for your wallet isn’t Wall Street, it’s the doctors’ lounge.”
He disproves the most pervasive personal finance myths of doctors.
The only piece of financial advice my father ever gave me came when I was in high school. He said, “Don’t worry about it, you’ll make the big bucks someday.” This from a man who cashed out his entire pension and put it all into GE stock in 1999. We all know how that story ends.
I never took that advice to heart; even back then, it struck me as a ridiculous thing to say. Looking back now, I realize that while my father was frugal and a diligent saver, he knew nothing about investing or generating lasting wealth. I promised myself I’d never be like that, learned from his follies, and used it as motivation that helped me comfortably reach financial independence in my mid-40s.
I’m glad you didn’t take that advice. I’ve come to realize in the last several years that sometimes the best things we learn from our family is what NOT to do.
When I was in grad school, my father convinced me to invest with him in second mortgages, sold by a distant relative of ours. It paid good interest for a couple of years. Then the relative stole all of our money and fled the country.
Years later, my father, age 97, living in a trailer, still puts his money in hare brained real estate and options schemes. He ignores my investment advice.
Very nice, and respectful, retrospective on Shannon Hoon, Josh. Definitely one of your best “Money Song of the Week” pieces.
As a teenager with a small amount of gifted stock, I was told the best “safe” way to make money was to sell call options!
You make money with covered calls if the underlying stock price never moves significantly, which is usually not what you want in a stock.
Getting a fancy degree sure doesn’t make people wiser. If Common Sense was only a stock, right? I don’t take advice, especially unsolicited, from anyone. People should invest in what they know & know what they invest in…tons of free info. can be found at our fingertips, yet people wait to be spoonfed. Many people don’t plan, don’t save, pay rent for decades & will work until they die. If they have families depending on them then they should probably get life insurance, because that’s all they will have after toiling for life. Plenty of regrets here..
The worst advice I got from a family member who stated “there is no limit to the amount of debt you can go into!” They weren’t wrong.
Not entirely true, but it’s certainly not all that hard to get enough debt to get yourself into trouble.
So many choices but the most consistent one I still get is about getting that nice car. After having no payment for several years I have learned to love it, but it amazes me how many people tell me to get something nicer. It’s especially annoying hearing from people that will have big inheritances coming to them. Not all of us are going to inherit 8-9 figures from their family. The only money I’ll ever see is what I earn and save.
I had a friend in his late 20s who, despite having a decent job at a bank, still worked a couple of evening shifts a week at a local chain restaurant. When I asked him why, he said that his father had told him that he should always have a job at a restaurant to ensure he would never go hungry.
That struck me as being both sad and profound; sad that this was the financial advice his family offered, yet profound in that his father was doing his best, giving this advice out of love, based on his life experience.
Former financial advisor: “You should buy this Whole Life policy!”
Me: “I have no dependents and don’t ever want children. Why do I need life insurance period?”
Former financial advisor: “You can pay fees to take a loan on the money you just put in there!”
Fortunately I did not fall for this scam unlike many of my not so lucky colleagues.
My worst advice was the media reporting that Russia had become a democracy. I only lost $4,000, but a friend of mine to this day asks me how my Russia fund is doing.
We had a financial advisor for about a decade. We were being killed on taxes every year…cap gains and dividends in our taxable account. I asked the “guy” for some way to reduce taxes and his answer was, “if you’re paying taxes you’re making money!” We were working long hours and were not well educated in money matters. He was basically lazy by having the same mix of equities and bonds in every account type…Roth, traditional IRA, taxable. I read a bit, fired the financial advisor and re-positioned funds into a tax efficient portfolio….problem solved.
Yea, do what you can to improve tax-efficiency. But there is some truth to the idea that having to pay taxes is a good problem to have. It beats not having to pay taxes most of the time.