jimi

Managing your finances can be confusing. You might hear all sorts of advice that seems prudent. And you might assume that you're taking the right approach by acting on this advice.
But what seems like a smart course of action might actually jeopardize your financial security. Here are 10 personal finance statements that financial experts have heard at least once from clients or others that weren't wise moves.
1. 'I want to cash out my IRA and buy a new truck.'
Jeff Rose, a certified financial planner and founder of Alliance Wealth Management, said a client once said he wanted to use the money in his IRA to buy a new fully loaded GMC Denali. It might have seemed like a good idea to Rose's client because he would be using his own money rather than borrowing to make the purchase. But there's a high price to tapping an IRA before retirement.
"When I explained to him the taxes he would be paying by cashing out his retirement account were almost half of what the truck's sticker price was, he back pedaled a bit," Rose said. IRA withdrawals are treated as taxable income and subject to an additional 10 percent early withdrawal penalty if you take money out of your account before age 59½. Plus, cashing out an IRA before retirement might mean you won't have enough money saved to retire.
2. 'I'm going to pull my money out of stocks and wait until the market straightens out to get back in.'
Investors often say this during market downturns because they're afraid their investments will lose value, said Ken Weber, president of Weber Asset Management and author of "Dear Investor, What the Hell Are You Doing?" But their reasoning is flawed.
"When you get out when the market is low, you're locking in your losses and you're locking yourself out of the eventual recovery," Weber said. As long as you have a diversified portfolio of mutual funds, you should stay the course during downturns.