Top Money Mistakes Keeping You From Getting Rich
Updated on Jan 30 2019
Even though many people are diligently contributing to savings and are conscious about overspending, they may be making common money mistakes that are keeping them from getting rich. Here are five financial mistakes that may be keeping you from the nest egg you deserve.
Most people have retirement goals and a picture of what they want their life to look like after retirement. Maybe it involves international travel, maybe it’s finally purchasing your dream home, maybe it’s finally getting that RV and traveling all over the country, visiting parks and family members. Whatever your retirement dream is, it is sure to involve a fair amount of financial planning to become a reality.
While most people have retirement dreams and many have taken the time to get their finances in order, some are still not seeing their retirement funds grow as expected. It could be that you are making these 5 common financial mistakes.
1. Reacting, instead of responding
It’s incredibly tempting to react to changes in the market. When you see a bad day in the markets, it’s tempting to sell stocks, to change your plan, to cut your losses. But, the truth is that the markets will have down days - just like they will have great days. When you see a sudden drop in your investment accounts, stop. Take a deep breath. Make a thoughtful response (if a response is even necessary) instead of a knee-jerk reaction that could harm your long-term financial plan.
2. Lacking accountability and commitment to a long-term plan
We live in a culture of instant gratification. It can be incredibly difficult to put off what you want now for what you need later. By putting your immediate wants first, you are jeopardizing financial freedom later. Exchanging retirement savings to make ends meet this month can snowball and drain retirement savings accounts quickly. Be careful to manage your day to day expenses with the money you have budgeted. Make payments on time to avoid late fees. Involve your spouse and financial planner in your long-term goals and invite them to hold you accountable and committed to your long-term plan.
3. Ignoring employer matching benefits
This is a common mistake that is easy to fix. Most companies offer some kind of matching program for employee retirement accounts. You want to make sure you are maximizing contributions to these accounts, thus maximizing your employer’s contribution to your retirement. It’s worth it to add the extra money to your account to put this initiative into play. Think of it as free money for your future.
4. Not diversifying investment accounts
Not diversifying investment accounts can negatively impact long-term savings in a huge way. This is why managing your portfolio for where you are in life is so important. If you are only in one market or only have one type of account and something happens that causes you to lose that investment, you will have nothing to fall back on. In addition to stocks and bonds, you will want to invest in real estate, limited partnerships, and private markets. This can help secure your financial future and real estate investments can even generate an additional source of income.
5. Doing it yourself.
When it comes to financial and retirement planning and avoiding money mistakes, there’s no better partner than a fiduciary financial advisor. Fiduciary financial advisors can help you conduct a financial assessment, helping you avoid common financial mistakes to help you reach your financial goals. They are experts in markets and long-term financial planning and they know how to avoid money mistakes that can cause issues for your financial future.
Get Financially Organized to Avoid These Mistakes
Have you fallen prey to any of these common financial mistakes? Contact an expert financial advisor to get your finances in order. Fiduciary financial advisors can help you respond wisely to market changes, hold you accountable to long-term goals, look into any missed investment opportunities, help you diversify your investments, and be a solid sounding board for your financial future.
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