Questa volta abbiamo cercato: Bankers, Accountants, Financial Professionals, and Insurance Agents of MassimoL, What’s the worst financial decision you’ve seen a client make?
Bankers, Accountants, Financial Professionals, and Insurance Agents of MassimoL, What’s the worst financial decision you’ve seen a client make?
Ed ecco le risposte:
Tax accountant here. Where do I begin?
I had 1 client that had the money to pay for his kids college without taking out any loans. Instead, he decided to take out a loan on his house to pay for college in order to claim a deduction on his tax return. When I explained to him that the benefits he’ll get from claiming the interest deduction on his return would not outweigh the amount he spends on interest he was certain I was wrong, even after I showed him the total amount of interest he’d pay and compared that to the expected tax benefit he’d receive for it.
Another client was contributing to her 401(k) and then pulling it out right away. She thought that this way she saved money on her taxes. What was really happening was the money was going into the 401(k) pre-tax (which is where she got the idea that it saved her money) and she would then pull that pre-tax money out but then she had to pay the tax + a 10% penalty for early distribution once she actually filed her taxes. Took a lot of explaining to get her to understand that she was paying 10% more on that money than she needed to all because of this crazy loophole she thought she had discovered.
I had 1 client that won the lottery. It was iirc a $10,000/month annuity FOR LIFE, give or take. Pretty sweet deal, right? Well, he never went and claimed the prize because he didn’t want to pay the taxes. I told him fuck the taxes, he can retire and never work another day in his life while still earning $120k/year. Nope, he’d have to pay the taxes so he didn’t go claim the prize. I think he even threw the ticket out. Dude makes like $60k/year and he turned down the lotto winnings. Like, if you’re not going to claim the winnings because you’re THAT against paying any sort of taxes why bother playing the lottery at all?
There are so many that they all start to blend together but god damn, the dumb ones are REALLY dumb.
Morals of the story: The benefits you’ll get from the tax deduction will never outweigh the benefit of not having to make that payment at all. If you have no clue about tax law and you think you’ve discovered some loophole you’re probably wrong. If you’re literally being handed $120k/year for just existing fuck the tax implications and just take the fucking money.
I used student loan refund checks to pay for pizza and beer for like 4 years in college. Does that count?
Not a financial professional but a friend of mine went all-in on BTC when it hit $20k and lost a lot of money when it crashed in 2017
ive seen people finance cars at over 30% interest. paying $500/mo for a 8-year old mustang, and will end up paying well over 2x the cars value, assuming they pay the loan off.
No conditions when purchasing a house. Conditions are there for a reason.
Especially an inspection! Who does that. Unless your are super knowledgeable in the construction field , dont waive your inspection conditions.