Common 'Pearls of Wisdom' You Should Not Apply to Your Money


Opposites attract. Time heals all wounds. Every cloud has a silver lining. Clichés like these (and plenty of others you’ve heard a million times) are repeated and believed over time because there is, or at least was, some truth behind them.

But when it comes to your money, it’s wise to really examine any advice you’re given before accepting it. As it turns out, there are quite a few “pearls of wisdom” your parents or grandparents may have shared that could actually hurt your finances.

“A watched pot never boils.”

Most experts agree that watching your investments too closely may have negative financial consequences—especially if you’re the type who panic-sells when the market dips—but that doesn’t mean you should be hands off entirely.

It’s a good idea to check your portfolio regularly to make sure the mix of investments is still aligned with your goals and timeline. And other important goals, like avoiding or paying off debt, and growing your savings, are contingent on keeping an eye on where your money is going. “Making sound financial decisions begins by knowing where you stand financially at all times,” says Certified Financial Planner Michael Hardy, partner at Mollott & Hardy, Inc in New York.

How you do that is up to you—you can hoard receipts and pore over credit card statements or connect your accounts to a platform like Mint that’ll track them for you—just so long as you do it.

“Give him or her the benefit of the doubt.”

Fact: No one cares more about your money than you. So while it can certainly be beneficial to lean on others for help making financial decisions—be it a professional or trusted friend—you’re the one who has to live with the consequences, for better or worse.

That’s exactly why you should never give someone the benefit of the doubt when it comes to financial advice you don’t agree with or understand—and why you should always do more research on your own and ask for clarification. If the advisor or mentor isn’t willing to help you understand, it may not be a financial relationship you want to continue, Hardy says.

“One bad egg spoils the bunch.”

It’s a reality of investing that you will win some and lose some. But the losers don’t have to drag down your entire portfolio. By making sure your investments are diversified, you ensure that you’re not being overexposed to one particular sector of the market or financial product—thus lowering your risk.

The idea is that, by investing in diverse assets—domestic and foreign stocks, corporate and government bonds—if some of your investments dip, others will likely be on the upswing. Best-case scenario: your winning investments may even erase your losses completely. “People shouldn’t freak out over [one bad-performing investment or] a bad decision,” says Hardy.

“Silence is golden.”

Let’s be honest, talking about money isn’t always easy. But not talking about it can be a costly mistake, whether that means missing a utility payment because you failed to discuss responsibilities with your roommate, racking up debt because you never set a budget with your spouse or making a difficult time even more challenging by neglecting estate planning.

Advisors suggest setting regular times for money check-ins with your partner so you stay on track. But, generally, the more frequently you talk about money, the less taboo the topic becomes in your mind, and the more comfortable you’ll be talking about it—whether it’s divvying up a bill, asking for a raise, or sharing financial goals with someone you trust who can help keep you accountable.