Life is full of big or small decisions to be made and sometimes some have catastrophic consequences. Many of these are financial decisions, since they are trapped in a sinking spiral from which it is very difficult to get out.
From El Blog Salmón we have decided to ask all our editors what are the worst financial decisions that can be made. Our intention is to disclose, then only knowing which are the possible errors can be avoided. We hope that the message reaches society.
Get into debt to consume
Our editor Marc Fortuño, a stock market specialist who has been writing for 6 years on these pages, has it clear: “Go into debt to consume”. Something that many of us agree with, since it is a bad financial decision.
Marc explains why: “We should dispense with consumer credit whenever we can. First of all, consumer credit is intended for the acquisition of goods that do not provide a basis for increasing equity but a family expense “.
And the thing does not stop there: “Secondly, and more importantly, the profitability of the acquired goods is negative, while it is usual to find an APR of 7%. Due to the high differential between interest and what your purchases generate, it is better to plan purchases based on our liquidity.“
Raúl Jaime, editor in this house for six years, is a strategic consultant and university professor, specialist in economics and blockchain. In your opinion it is a mistake to “not save” and to “live beyond our means”.
For Raúl it is clear that it is a bad financial decision “not to have savings or at least one mattress by itself at some point in our life we must pull it. We have already seen with the Covid-19 that an unforeseen event can come when we least think about it and that corner can save our economy “.
But it does not stop there, because also related to not saving is “living above our means and starting to use ill-advised financial products how are credit cards“This also has a lot to do with Marc’s advice not to go into debt.
Javier Navarro has been an economist and editor of El Blog Salmón for 15 years. When I asked him about the worst financial mistake that could be made, he could not restrict himself to one: “The worst decisions that can be made are above all in how we organize life, from adolescence. Finishing school too soon before acquiring skills that allow us to earn a good living, having children too early (and preventing this), committing crimes that can take us away from job opportunities, taking unnecessary risks, avoiding addictions such as drugs and gambling, etc. Also about going into debt beyond our ability to meet our debts. “
However, without focusing on purely financial errors, it is clear: “then there is the error of not saving, and if we save, we will not invest most of our assets in assets that with a lot of risk that can lead us to ruin. Finally , not invest in anything and let inflation eat away savings little by littleIt will make all the past effort come to nothing. “
Buying a home in 2021
Verónica Lechuga has been an editor at El Blog Salmón for 6 years. He is a journalist specialized in economics. Although he knows that his opinion will be controversial, he is clear: “for me, the worst financial decision that has been made in 2021 is home purchase“
And it is that he sees exorbitant prices: “Many citizens have launched themselves to buy houses in the style of the bubble era of the early 2000s, driven by an economic recovery that is not being such. The market has become saturated again and prices are through the roof. “
Verónica is afraid of what a decision like this could cause in personal finances: “Taking into account the inflation that we have, which is going on for a long time, plus electricity prices and the uncertainty due to a pandemic that will not go away, I think it is a bad decision right now, because I don’t think in the medium term they can recover that investment.“
Buying a home without much thought
For my part, I have been writing in El Blog Salmón for 15 years and by training I am a Telecommunications Engineer. In my opinion I think that one of the biggest financial mistakes you can make is buying a home without proper thought.
On the one hand, financially, it is a very far-reaching decision, since mortgages can easily go to 30 years. This decision anchors to a location without the possibility of moving and has very serious implications in life: transportation time, inability to accept certain job offers, ability to save …
In the 2007/2008 crisis, it was also seen that some homes were highly overvalued and today many of the people who bought at that time still cannot get rid of the home without bearing losses. Therefore, although I am not in the least against buying a home, it must be a very thoughtful decision and time should be spent evaluating the pros and cons of the acquisition, with simulations of what would happen in the worst cases (depreciation thereof, rate hike, etc.).
Source: El Blog Salmón by www.elblogsalmon.com.
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