Humphrey Yang Reacts To 4 Pieces of Bad Financial Advice on Reddit
Written by
Nicole Symon
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Molly Sullivan
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People are always looking for advice on how to save, invest and make money, and that’s understandable. Everyone wants to make the best financial decisions possible. But you have to be careful because there’s a lot of bad advice out there.
In a recent YouTube video, personal finance influencer Humphrey Yang discussed what some Reddit users thought were bad pieces of financial advice.
Not Rebalancing a Crypto-Heavy Portfolio
The first comment Yang covered in his video is from someone who had 33% of their portfolio in cryptocurrencies and was advised not to rebalance. As Yang pointed out, cryptocurrencies, especially niche ones, are highly volatile. This means they can dramatically decrease in value very quickly, making them riskier investments than more traditional options.
Yang’s advice is to rebalance if cryptocurrency starts to take up more than 3% to 5% of your total portfolio. Taking some of that money out of cryptocurrency and putting it into traditional investments like stocks and bonds will stabilize your portfolio.
Avoiding Credit Cards Entirely
A common piece of advice in the personal finance space is to stay away from credit cards. After all, the average U.S. household with credit card debt owes over $6,000. You could theoretically avoid a lot of debt by never taking out a credit card.
Yang noted, however, that credit cards aren’t always bad. He even said, “If you can stay disciplined with a credit card, I think it’s one of the best tools out there to maximize your money.”
His advice is to follow these four rules for using a credit card responsibly:
- Don’t spend what you don’t have (live within your means).
- Pay off your credit card in full every month.
- Don’t carry a balance so you don’t have to pay interest.
- Know yourself and understand what type of spending behaviors you’re prone to.
As long as you pay off the full balance on your credit card every month, you won’t have to worry about expensive interest charges. You may even save a little money on your purchases thanks to cash back and other rewards.
Buying New Cars Over Used Cars
Another commenter mentioned being advised that you should buy a new car since you don’t end up saving any money on used cars with all the extra work they’ll need.
Yang disagreed. He emphasized depreciation, the value an asset, in this case a car, loses over time. As Yang explained, a new car’s value drops dramatically in the first few years.
In late 2024, the average price for a new car in the U.S. was $47,542, while the average used car cost $27,177 — over $20,000 less. Yang’s recommendation is to buy a used vehicle that’s about three to five years old. By purchasing a used car at the right time, you can get a big discount on the sticker price without worrying about too much wear and tear on the vehicle.
Aggressively Paying Off Low-Interest Loans
When you mention debt, people often think of debt with high interest rates, like credit cards and auto loans. However, you may have debt balances with relatively low interest rates. One commenter said the worst financial advice they received was to aggressively eliminate these low-interest loans.
Yang acknowledged that there are two sides to this debate. On the one hand, taking the money you would use to pay off low-interest debt and investing it in higher-yield investments can leave you financially better off. However, eliminating all your debt, including low-interest debt, can give you peace of mind and simplify managing your finances.
Yang said, “I don’t think it’s the worst financial advice ever to pay off your low-interest mortgage, for example.” Instead, deciding whether to prioritize eliminating low-interest debt is personal and depends on your goals.
It’s not all about optimizing every financial decision to the very last penny. As long as you understand what debt costs and how you can save money, you have some flexibility in making decisions that work for you.
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