What are the top five personal finance and investment traps?

You want riches? You want to avoid the biggest financial trap in life?

Don’t … have … KIDS!

They’re money pits – you just shovel cash into them for two decades. I call my first one Leech, the second one Vampire. Occasionally they flash their fangs and glare at me with blood red eyes.

That advice is probably too late for Gen Xers. Most of you have either got them, have a bun in the oven, or wouldn’t listen to me anyway.

And for the life and money they suck out of you … they are the greatest toys in the world. Wouldn’t swap mine for all Bill Gates’ cash. Or all the iron ore in the Pilbara.

So, tips two to five? These will probably save you enough to pay for the kids. And just so I don’t offend everyone, these are simply things I will never do.

Two: I will never buy an investment property via a seminar where a property developer is in tow. There are two “costs” in developments that don’t exist in “existing” property. The developer’s profit margin and the commission of the sales agent up on stage. I’m not denying them their profits – good luck to them. Just not from me.

Three: I will never buy investment property from developers. Similar story. Have been around enough to have seen a largely sorry history for investors.

Four: I will never invest in an agricultural managed investment scheme. You know the stuff – forests, ostriches, pearls, etc – but I’ve never seen them hit their projected targets.

Five: Cars are depreciable assets. The less you spend on them, the wealthier you will be.

Bruce Brammall is the principal adviser with Bruce Brammall Financial (www.brucebrammallfinancial.com.au) and author of Mortgages Made Easy.