5 Disaster Financial Moves

After almost 20 years of giving personal financial advice, I thought I would share the secrets I know about becoming financially successful.If you avoid these 5 disaster financial moves, you should have a good chance of becoming prosperous and hitting your goals. If you have made one of these already, it may be time to come see us to show you how to get back on track.

1) Buying More Home Than You Can AffordThis is my top one as it will truly cripple your long term financial plan. Years ago, I had heard of a very simple financial ratio called the primary obligation ratio which said that your mortgage payment shouldn’t be much more than 28% to 34% of your total gross monthly income.  Use that statistic in conjunction with putting 20% down on your home purchase and you will typically avoid this number one financial disaster.  It is impossible to squeeze into a home financially like you would a car or some other one time purchase.  Many people forget the cost of furnishing the house which can run 5% to 15% of the home value depending on your taste. While most people think that they can ‘fill’ there home over the rest of their lives, the truth is people work hard to fill up their unfinished homes compounding their initially bad decision.  In addition, you should estimate that basic upkeep of your home will be 2% to 4% annually.  This goes from landscaping, to a blown water heater, or just painting rooms again.  Many people do not put these costs into their budget when they figure their mortgage payment.  Last, for the newly married couple that has two incomes, you should consider what will happen when you have your first child. In many cases, one spouse decides to stay home after the birth of a first child. Beyond the new kid expenditures, the budget takes a huge hit with one less income.
2) Private Equity Investments With FriendsSure you will hear the story of some guy who invested in a start up technology company, a newly developed building, or some fancy new gadget who made a boatload of money.  However, for the regular guys and gals who put money into a friend’s start up restaurant, a piece of land they never saw, or a few shares in a new company it generally doesn’t work out in the long run.  The odds of cashing in a private equity investment are very slim in my personal experience, and seeing client private investments over the years.  I would say less than 5% of the time does money actually come out the back end of the investment, with more often the result being loss of all of the money.  Here is my simple rule:  If you aren’t going to be actively involved in the business as an owner stay away.  Unless of course you want to lose your money or it take 10 years longer than you thought to try and get it back.
3) Carrying Credit Card DebtBesides a reasonable home mortgage, most debt just isn’t good for you. The one killer in all of the debts is carrying ongoing credit card debt on a long term basis.  Sometimes credit card debt occurs because of some one time emergency or catastrophe, but more often than not it is just simply created by living beyond your financial means. You spend more money than you make and do it for a sustained period time and you end up owing the wrong people. Getting tracked down by a loan shark with the Soprano’s won’t end up feeling good, and neither does watching your debt compound at a 18% to 24% interest rate with the credit card company.  At an 18% interest rate, your debt will double almost every 4 years.  The sooner you get a budget and a financial plan, the sooner you will pay off the debt.
4) New AutomobilesI’m thinking of selling the new car smell air fresheners right on our website to get people to stop buying new automobiles.  Make whatever argument you like, buying a new car is just about the worst investment you can make.  I don’t mean trading in an older car for a newer ‘used’ car, but just buying a new car period. I’ve written many articles on this subject, and if your financial advisor had an investment that you knew would go down in value 40% over the first two years, you just simply wouldn’t do it.  With body styles changing less frequently in cars today, you can settle for getting a car with almost all the new technology for 40% less price.  This financial move over 20 years can save you huge money which you can apply toward your financial goals.
5) Not Saving EnoughIt’s true that the markets and economy have been shaky, and could be for many years to come.  When you look at a goal like retirement, most of us do not want to retire later nor do we want to live on less after working for 30 or 40 years.  If you cannot control the markets or your overall rate of return, the one thing you can do to tip the odds in your favor is save more.  Use my simple tip of saving 33% of every raise you get, and you will learn to live within your means vs. spending your raises and bonuses.  Over time the money will be out of mind and out of sight putting you in a position of refusal come retirement time.

Avoid these disasters and put yourself on track for financial independence, purpose, and freedom.
Call 800-355-9318 for a free consultation with oXYGen Financial today.

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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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oXYGen Financial, Inc. co-CEO Ted Jenkinis one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves


My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Read More About Ted Here

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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  • Avatar
    September 1, 2010

    Saving more is one way to tip the results in your favor but it looking to other things that you should put money into. Like an CD. Perfect way to save money for long term stuff.

  • Avatar
    September 1, 2010

    I think moving away from buying and or leasing new cars every few years is a great starting point (good for you bad for car companies) to financial freedom. I drive a 93’Acura not exactly going to win any awards but my payments have been and will continue to be 0.00 per month :). If you need to drive a nice car rent one for a weekend…

  • Avatar
    Sherman Unkefer
    September 11, 2010

    Wow, I made a few of these mistakes but thankfully I avoided disaster. The big one I made was leasing a brand new vehicle because it was the only way I could walk away from the dealership without having to shell out major money on my trade in. It’s a vicious cycle when you lease a new vehicle and I am still paying for that mistake.

  • Avatar
    September 22, 2010


    Used cars are the way to go all the time. Sometimes a financial mistake can be helpful to allow you to run your family finances better as long as it is not a catastrophic mistake. Just don’t make the same mistake twice.


  • Avatar
    September 22, 2010


    I love rent a nice car for the weekend! Great idea!



  • Avatar
    September 22, 2010


    CD’s don’t make sense for the long haul unless you are looking to go safely backwards after inflation. Remember, there are no investments that don’t carry some kind of risk.


  • Avatar
    February 14, 2012

    i always wanted to save..and im trying :)

  • Avatar
    February 26, 2012

    thank you for this article. since I lost my job, my financial has been very unstable. I got rid of all my credit cards and am now on a payment arrangement scheme. I wonder if you have some investment suggestions that are low risk?

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