66 Things Not to Do if You want to be Better off Financially


financial things not to do

Sometimes, you are better off not doing some things. Here are 66 such things that you shouldn’t be doing:

  1. Don’t spend to show off. (why)
  2. Don’t forget about inflation.
  3. Don’t save less than 10% of your annual income.
  4. Don’t keep money in stock market that you’ll need in next 5 years. (why)
  5. Don’t ignore the importance of keeping cash. Both as a part of your emergency fund (why) and as a market crash fund (why).
  6. Don’t put off saving now in the hopes of saving later. (why)
  7. Don’t try to save everything and sacrifice your present.
  8. Don’t think that spending money beyond a point can make you happier.
  9. Don’t keep an emergency fund of less than 6 months worth of expenses.
  10. Don’t invest 100% in stocks or 100% in bonds or 100% in bank deposits.
  11. Don’t think PPF, EPF, NSC or SSY are dull and for losers.
  12. Don’t ignore the importance of reading. Your end-of-life corpus can be reduced by lacs if not crores.
  13. Don’t think that just by reading great investment books, you can beat the sh** out of the market.
  14. Don’t have ‘being-the-richest-man-in-graveyard’ as the aim of your life.
  15. Don’t watch business channels too much.
  16. Don’t envy your friends / colleagues’ portfolio returns. (why)
  17. Don’t think that insurance and investments are same things.
  18. Don’t buy endowment or moneyback insurance plans.
  19. Don’t be under-insured. Being over-insured is pardonable. (why)
  20. Don’t die without an insurance (if you have dependents).
  21. Don’t die without adequate insurance (if you have dependents).
  22. Don’t die without a will.
  23. Don’t buy based solely on past performance and expect future performance to be a repeat of past.
  24. Don’t think risk is just about short-term volatility. For most, its about earning low returns (why).
  25. Don’t think that a long-term goal will remain a long-term goal forever. They become short-term goals as deadlines near.
  26. Don’t expect stocks/equity MFs to give more than 12% average returns, even in the long run.
  27. Don’t believe those who make promises of more than 20% returns in markets.
  28. Don’t believe anyone who gives you any guarantee in stock markets.
  29. Don’t ignore the importance of index funds. Their day will come (in future).
  30. Don’t underestimate the power of automating your savings and investments.
  31. Don’t underestimate the power of compounding. (why)
  32. Don’t give up on stocks if you lose money at first. (why – here is another why)
  33. Don’t think that successful investing is easy. If it was, everybody would be rich. (why)
  34. Don’t assume you are smarter than the market.
  35. Don’t invest in anything you don’t understand.
  36. Don’t forget god in good times and equities in bad times. (why)
  37. Don’t think that simply following Peter Lynch’s advice to “Buy what you know” will work. Better to research what you know and then consider buying it.
  38. Don’t think that all your stock picks will give positive returns. Even a 40% success rate can make you a great investor.
  39. Don’t think that it will be as easy to implement, as it is easy to say “I’ll be greedy when others are fearful”.
  40. Don’t expect stocks to behave like bonds and give fixed returns. (why)
  41. Don’t assume that 2008-09 like crash can never happen again.
  42. Don’t assume that 2008-09 like crash will regularly happen in future.
  43. Don’t think that the next recession will be like the last one.
  44. Don’t be afraid of falling stock prices or bear markets. (why)
  45. Don’t invest in IPOs. (why)
  46. Don’t forget that a high potential return means high risk.
  47. Don’t think that those who use a lot of maths (or excel) are great investors. If they were, mathematicians would be the richest people in the world.
  48. Don’t think that traders are idiots (if you are an investor).
  49. Don’t think that investors are idiots (if you are a trader).
  50. Don’t think you know every method of making money in stock markets. There are ways to make money you don’t even know off.
  51. Don’t believe everything that experts have to tell you. Especially in stock markets. (why)
  52. Don’t trust you agent or broker or advisor or wife blindly (or maybe you should trust your wife).
  53. Don’t be surprised if every solution offered by an insurance salesman involves insurance. (why)
  54. Don’t be surprised if every solution offered by an MF agent involves MF.
  55. Don’t think that complexity is necessarily profitable or a sign of expertise.
  56. Don’t think that the best sounding advice is actually the best one in the long run. (why)
  57. Don’t think that a person without a formal (expert) background in finance cannot be a good investor. “Expertise is great, but it has a bad side effect: It tends to create the inability to accept new ideas.”
  58. Don’t invest only to save taxes. (why)
  59. Don’t think about saving taxes in the month of March. (why)
  60. Don’t take a large housing loan just for the sake of tax deduction. (why)
  61. Don’t think about buying investments without first settling on your financial goals.
  62. Don’t think that the loans (which can give sleepless nights) will vanish automatically. You will need to plan and work towards making them vanish.
  63. Don’t think that one day, you will automatically get out of the living-paycheck-to-paycheck mode. You will need sacrifice a few things to make it happen. (why)
  64. Don’t think that credit card is a source of funding. Its a mode of payment.
  65. Don’t carry a credit card balance.
  66. Don’t be stupid enough to not read Stable Investor’s newletter. 😉

Post inspiration – this.


  1. Hi, very informative article.
    I am 28 years old and I am searching for good investment options. I just came to know about peer to peer lending as an emerging platform in India and wanted your views on that.

    1. Thanks Vikas
      I have not delved deep into P2P lending platforms so I can’t say much.
      But by structure, P2P lending can be quite risky. So unless the platform takes care of the default risk, etc. it is something to be cautious about.

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