AVOID THESE(7)SCAMS

O.K. scams might be too strong a word. But not by much. But there's more than enough consensus along financial expert fault lines to just safely ignore these seven.

Now in truth there MAY be very specific circumstances in which some of these products would make sense.
 But there is overwhelming consensus along the financial expert guides to just ignore them.

1: Annuities:
Annuities can best be described as an INSURANCE CONTACT sold to people  by investment institutions. It's main attraction to retirees is in the form of a guaranteed monthly amount payment. 
But there is a good reason we list it as scam number one. 
Amongst some of the reasons. 
Annuities, for what they offer, are often extremely expensive, overly complicated (not always fully understood by the salesperson selling it), and just completely unnecessary.
There are far better and simpler options. 
Perhaps worse of all, they're frequently written in such a way that could only be described as misleading, if not downright dishonest.
Ignore what every financial salesperson and even friends and family.
 DON'T GET ONE.

2. Whole life insurance:
In a nutshell, a whole life insurance policy is a policy that's designed to pay out and cover you from the time you purchase the policy until your death.
 A term policy will only cover you for a certain number of years.
 A term policy is virtually always preferable to whole term.
 The real point of term life insurance is to protect your family during your working years.
Remember insurance, despite what a financial salesperson tells you is not an investment. 
Its insurance and nothing more. 
Term life is also much less expensive. After 30+ years of working, saving, and investing you should be in a position where insurance of any sort is just unnecessary.
For starters you most likely receive some form of life insurance through your employment. 
For many of us this is more than adequate for our needs. 
What we were talking about here is whole life insurance VS term life. 
If you do need some form of life insurance it's far better to get term life. 

3. Hiring a financial adviser:
The vast majority of so called financial advisers you'll encounter are not really financial advisers at all. 
They are by majority salespeople.
The job of these salepeople is to sell you products whether you need them or not.
 Nor are they legally bound to put your interests above their own.
So what are you to do? The answer is simple enough for most people.

You need a FIDUCIARY. 

A fiduciary is legally mandated to put your financial interest first above their own. 
They won't try to sell you annuities, whole term life insurance, or offer to 'manage" your investments.
Because no one needs to manage your money except you.
A fiduciary that you hire will be a fee-only. 
Basically X amount of money for X amount of face time.
 In other words, don't pay for commission based advice.
It's a good idea to visit a good fiduciary every two or three years after you've reached the $100,000 benchmark. 
It's money well spent to help once your financial path starts to come into focus and prevents you from drifting off course.
Just make sure you're hiring a fee-only fiduciary.

4. Car leasing:
When you lease a car you're basically just renting an automobile on a long term basis.
Car decisions in general are as bad a trap as one can make. 
Car leasing however is easily amongst the worst auto debt decisions you can make.

Here are just a few issues.
Your renting, not outright purchasing-or even making payments toward ownership.
 You never own a car you lease. 
But you will be required to keep up maintenance on THEIR CAR. 
Also the terms and conditions usually include things like mileage restrictions and just a myriad of other complicating factors to contend with. 
There are almost no shortage of reasons to never even consider leasing. 
Perhaps the most overlooked reason is the fact that when you lease, you're renting a depreciating asset. 
You never want to rent a depreciating asset.
Owning a reliable vehicle for as long a period of time is one of the best ways to avoid the personal wealth traps that millions of people are chained to.
 Leasing cars on the other hand, prevents you from even getting this far.
 You can't even get in the car ownership game when your sidelined with a car lease.

5. Payday type loans:
Some financial mistakes are worse than others.
 Payday type loans are amongst the worst of the worst. 
Please note were not just talking about the Payday company itself but also the numerous other companies that are different in name only.
These predatory products are marked by absolutely astronomical interest rates. 
There is no other type of loan that just climbs so fast.
Borrowers find that loans of just a few hundred dollars turns into thousands seemingly overnight.
 In only a few months some people will find themselves so massively behind they effectively won't ever catch up.

There is one last thing to consider. 
Most of these payday type loans are for relatively small amounts. 
Perhaps a thousand dollars or less.
Considering we are talking about a rather small amount of money you must come up with a different way to get the money.
 Maybe you feel there is literally no other way but you have to do literally anything else instead of borrowing from them.
Never ever do business with these predatory loan institutions. 

Never. 6. Lifestyle creep:
No doubt you've heard about "lifestyle creep" but what does it mean? 
Lifestyle creep is the phenomenon of increasing your monthly expenses, generally on luxury purchases as our financial picture improves.
Note were talking about an increase in discretionary (i.e., luxury) spending.

What were NOT talking about is using our increased income to improve our personal finances. Such improvements may include paying down debt, getting our first $100,000, extra mortgage payments etc. 
We are specifically talking about things like car upgrades, vacations, subscriptions, clothes they only wear once, and other niceties.
Lifestyle creep is real and can prove to be difficult to overcome if your income dramatically drops and you have to force yourself to suddenly downsize your expenses.
There's a good reason experts often refer to lifestyle creep as a "silent inflation," and it's an inflation we impose upon ourselves.

7. Keeping a mortgage for the "tax break".
This is less of a scam than just extremely bad advice. 
This is advice that can cost ten, or even hundreds of thousands of dollars. What makes this advice so much worse than it already is the fact that this is advice typically comes from "experts" who may even have some financial interest in you not paying off a mortgage early.
Many, if not most people think that mortgage interest is deducted in its entirety. 
It's not.
 What can be deducted is the tax rate (your tax rate) of the interest you deduct. 
Big difference.

Example: You're in the 15% tax bracket. 
You paid $3,000 in interest on your thirty year mortgage last year and deduct it from this year's tax return.
Many people believe that means your getting back the $3,000 in interest you paid into the mortgage the previous year.
 But that's not how it works.
Instead, this is what you can expect.

The 15% (your tax rate) is divided into $3,000 for a total of $450. 
A far cry from $3,000.  That doesn't even begin to take into account all the other expenses first and foremost being the interest on the loan itself. 
The debilitating effect interest has on your largest lifetime purchase can easily be the difference between an ordinary retirement and an extraordinary one. 
Theres other financial considerations but they all pale in comparison to the interest paid. 
This is interest that will burden you for DECADES if you don't address it.
Mortgage loans are, to be sure, a weight we put on ourselves that we justify keeping.
Get rid of it. 

Paying off a mortgage early will cost you a little bit of money at tax time per year. 
But you have to remember the amount of money you save by paying off your mortgage early.
 Its no contest at all.
 An added bonus is the extra money you now free up.
You can expect to hear the mortgage tax break myth your whole life.
 But not having a mortgage is the break you give yourself.