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Credit Education > Debt Management Help > The Harsh effects of making Gullible Decisions in your Finances

The Harsh effects of making Gullible Decisions in your Finances

By Janet Lacey
Published: Monday, January 18th, 2010

Being gullible in simple jokes and humors can be really funny at times, but gullibility in serious bound life businesses like finance can lead to a total financial disaster. Every day and everywhere indebted individuals make decisions that they do not know are causing more negative effects than help them to make their financial status more stable. Indebted individuals make themselves more and more exposed to possible causes of bad credit worthiness ratings. The worst part is many individuals think that they are managing debt and even investing wisely when in reality they are making the worst financial decisions an individual can make.

One of these worst situations is when an individual availed a loan agreement that he or she cannot pay. Individuals can overshoot their income projections and the proportion that they are willing and able to pay for. The second most committed wrong financial decision is taking financial advices from an investment salesperson.

Doing so can make individuals think that they are making good investments of their limited income through an investment salesperson. In reality, it is better to put extra income on managing debts or good savings accounts. Investments salesperson can easily make people think that putting their money into high risk investments that promise possible high interest is a good step. Unfortunately, most of these investments lie on shaky economic landscape. It is a common situation where a lot of wrongly advised investors end up losing their hard earned income for nothing at all. An individual wrongly diverting his limited income resources can end up with lowered credit scores and worsened reports, mainly because his or her money could have been put into better debt management payments rather than thin air investments.

Getting into a get-rich-quick scheme is widely spread nowadays, especially after the recession individuals are more than willing to do anything that promises easy ways to becoming rich. The most common type of get-rich-quick scheme is the investment bandwagon that is being regularly joined by more and more individuals who would want to be rich.

The recent investment bandwagons include the technological band wagon of the late 1990s, and realty investments in the year 2001. These two investment bandwagons brought down a lot of investors when their investment bubble blew just like what happened in the recent recession. All of these dilemmas make millions of people neglect managing debt and focus more on other riskier financial ventures. The end result of these financial decisions was best demonstrated in the recent global financial crisis where a lot of people instead of becoming rich end up indebted and unemployed.

There are only two cures for financial gullibility- education and restraints. Individuals should exert efforts to be well educated on how to live within their current means. Individuals should also have enough restraints in keeping their personal pledges in their financial life in accordance with their actual ways of life. Being credit worthy is highly dependent on these factors simply because a good credit score and report can only be achieved with the right attitudes. Gullibility can be outwitted without having to experience the harsh effects of gullibly falling into financial traps.

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