These Are The Absolute Worst Financial Mistakes Experienced Advisers Have Seen Their Clients Make
Mistakes, although they are setbacks, can serve as opportunities for learning for those who make them and even observing bystanders. The same can be said when it comes to personal finances.
People can learn from the costly mistakes others have made and avoid repeating them when faced with similar situations. This said here are some of the worst financial decisions advisers have witnessed in their line of work and what lessons others can glean from them.
Withdrawing Their IRA
Mark Pitre, principal at California Financial Advisors, shares about the worst thing a client of his ever did is to liquidate a part of their IRA to $120,000. Worse, this was done so the client could pay off some credit card debt worth about $50,000.
While this particular situation demonstrates many other underlying issues with the client’s personal finances, the cashing out of a substantial part of their retirement fund was a costly mistake on their longterm plans. It also demonstrates how debt can affect one’s finances negatively in numerous ways and in worst-case scenarios prevent them from being able to retire altogether.
Letting Emotions Rule
Meanwhile, Montag & Caldwell CEO William Vogel warns against being too emotional when making big financial decisions. This can mean being too excited or fearful at the wrong time and overlooking the importance of sticking to their long-term investment plan.
This mistake can be countered by leaning on history and facts instead, Vogel said. Remember that the markets can be cyclical and to have a 10-year plus outlook when it comes to investing in them.
After all, the United States markets have a track record of giving investors good long-term returns. This advice especially applies to younger people as they have more time to keep their money in the market and enjoy their profits after.
Overspending & Undersaving
Tom Johnson Investment Management’s Cory Robinson observes that people tend to have a problem with undersaving and/or overspending. And this issue is typically applicable to high earning individuals.
In fact, Robinson explains that people who earn somewhere around the low to mid-six figures actually find it difficult to save within their IRAs and 401(k) plans enough to replace their current high income when they retire.
Being Too Cavalier
Another big mistake that financial advisers see in their clients is investing money without a specific goal. What more, Wescott Advisory Group CEO Grant Rawdin warns against freely putting money into companies without reasonable chances of success or even a business plan as well as making huge purchases like expensive art or vacations.
More inFinancial Advisor
Obama, Julia Roberts, Madonna and More Celebrities Who Have Partied on David Geffen’s $590 Million Yacht
Billionaires love showing off their wealth whether it’s through their massive private jets, a fleet of expensive cars or mega yachts....April 9, 2020
Kim Kardashian Sued for $300-Million Over Kimoji App, But the Case Could Go in Her Favor
Kim Kardashian has always found herself at the center of controversies. From her hairstyles to outfits, she manages to create headlines...April 9, 2020
These Five Things Can Help You Boost Your Credit Score—And You’re Probably Already Doing Them
Maintaining a high credit score comes with a lot of financial perks. For one, it can save people plenty of money...April 8, 2020
The Ritz-Carlton Is Woking on a Yacht Cruise Ship Designed For Luxury Travelers–This Is How It Turned Out
Known for its luxury hotels and resorts found across the globe, the Ritz-Carlton Hotel Company is now planning to expand its...April 8, 2020
Drag Superstar RuPaul Charles Just Bought a Beverly Hills Mansion That Totally Matches His Over-The-Top Public Persona
RuPaul Charles better known by the mononym ‘RuPaul’ is probably the most famous drag queens to ever successfully cross over into...April 8, 2020
This is The Unbelievable Story Behind Former WeWork CEO Adam Neumann’s Plummeting Net Worth
Just a few months ago, Adam Neumann was on top of the world. Not only was he a billionaire with an...April 7, 2020
This Is How Young Working People Can Start Preparing For Retirement While Still Enjoying Their 20s
Saving for retirement and enjoying the fruits of one’s labor are not mutually exclusive concepts. Members of the workforce, young ones...April 7, 2020
Tom Cruise Was Offered Roles in These Blockbuster Films But He Turned Them Down!
Tom Cruise is undoubtedly one of the most renowned faces and the greatest talents in the industry – you can tell that by the...April 7, 2020
These Five Major Cities Are Joining The Car-Free Movement & Banning Cars On Their Streets Soon
There’s no doubt that cars are a very useful invention. However, the rapidly growing number of vehicles on the world’s streets have...April 7, 2020