3 Financial Decisions That Made Sense 10 Years Ago but Don’t Anymore
Optimal financial decisions change over time. The same moves that many experts encouraged don’t make as much sense in the current landscape. Higher interest rates, inflation, economic conditions and easier access to pertinent information are some of the factors that have changed.
You may want to think twice before considering these financial decisions that made a lot more sense 10 years ago.
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Getting an Auto Loan for a New Car
Auto loans break a car purchase into reasonable monthly payments, but it made a lot more sense 10 years ago when interest rates were much lower. Not only have interest rates been high in recent years, but new car models are also quite expensive.
A 2025 Kelley Blue Book report found that the average transaction price of a new car topped $50,000 for the first time last year. Higher interest rates and higher principal amounts are not a good combination, and that has increased the demand for used vehicles.
Getting an older car or paying more in cash for a new vehicle to minimize interest may make more sense than taking out a loan with little or no money down for a new car.
Relying On Home Equity for Building Wealth
Homeownership has been commonly touted as a path to wealth, but relying on home equity may not be a winning strategy anymore. Higher rates make it expensive to borrow money against your home, but that’s not the only obstacle that can make it so risky to rely on home equity.
While housing prices have relentlessly marched higher since the pandemic, the market is starting to cool off. The median sale price of a home dipped to $403,200 in the first quarter of 2026, marking a decline from the previous quarter, according to the Federal Reserve Bank of St. Louis.
A housing correction may become inevitable as the affordability crisis continues. That’s great for people who want to buy homes, but it mat not be ideal for people who want to utilize home equity.
Ignoring Individual Stocks
Buying index funds is a solid long-term investing strategy that has produced many millionaires, but writing off individual stock picking completely may result in missed opportunities. It may be worth doing some digging, with information about promising stocks being easier to access compared with 10 years ago, especially when you can look at benchmarks like the S&P 500.
The S&P 500 contains plenty of underperforming stocks, with more than 200 of its holdings down year to date. Allocating a portion of your portfolio to a small collection of growth stocks can produce elevated returns instead of relying exclusively on the S&P 500.
Investors can also look at thematic exchange-traded funds (ETFs). Thematic ETFs make it easier to invest in the stock market without digging too deep into individual picks while offering more exposure to high-potential opportunities than the S&P 500. While index funds are still more suited for beginners and people who do not want to get too deep into stock market analysis, this route is another option for investors.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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