Bellmore Group Management Services, Tokyo Japan Tips for Avoiding Financial Mistake for Millennial | Page 2

You have to realize that paying off a loan can greatly affect your budget. NerdWallet's latest yearly survey on
consumer debt revealed that the regular household spends over $6,650 just for interest payments yearly.
Before you do take out a loan, answer these questions: Do you really need it? If so, can you live with a cheaper
alternative? Finally, calculate if the monthly principal and interest you pay for so many years will yield for you
a more beneficial alternative in terms of savings and investment accounts that can accumulate and serve to
protect you from financial straits.
Mistake #3: Believing the Wall Street's byline “investing is complicated”
Investors often understand Wall Street companies to be saying that one needs to monitor the financial markets
at all times, distribute your money over all kinds of complicated and cryptic assets and always be on your toes
at any time in order to invest in new promising stocks. And the catch is that to make any substantial return, you
must seek their help – obviously for a high price worth their “expert” advice.
Don’t you believe it! Even veterans in the market cannot accurately predict what the financial markets will end
up doing. Terrance Odean, professor at the University of California Berkeley, conducted research which
showed that outguessing the market by constant trading tends to reduce an investor’s chances to gain good
returns.
The better alternative is by doing less: Create a basic portfolio of widely assorted stock and bond funds that
suits your risk tolerance level and leave it as it is through market highs and lows, except for a rebalancing
adjustment once in a while. Check out online tools which will help you do proper asset allocation consistent
with your risk capacity in order to find a balanced mix of bonds and stocks that works for you.
Mistake #4: Paying too much for financial counsel
The annual fees you pay for a mutual fund manager or the occasional fees in exchange for advice in choosing
potential funds and other financial counsel will affect whatever returns you expect from your investments by
reducing your savings. Minimize such costs as much as possible.
In terms of investments, you can gain greatly reduced costs by sticking to low-cost ETFs and index funds. You
can readily gain savings of at least 1% annually in relation to the regular stock mutual fund.
Go ahead and consult a financial adviser, if you feel you need to; however, be sure you get the precise amount
you have to pay and the specific benefits you will receive, before giving out any money. Likewise, make sure the
price is reasonable and comparable to fees charged by other advisers.
You may also hire an adviser on an hourly scheme rather than shelling out a specific percentage of your assets
or using an online-adviser app or service utilizing algorithms that recommend affordable investing tips.
Mistake #5: Not monitoring your progress
One thing you should not do is to become money-obsessive. Neither should you be a Pollyanna and let things
take their course, hoping everything will come up roses. Take time to regularly assess your financial status at
least once-a-year to determine if you are on the right path.
The best overall measure of your financial health is through knowing your net worth, which is the value
difference between your assets and liabilities, that is, how much you have and how much you owe.
For those who regularly save and invest wisely, their net worth should gradually increase. Once your net worth
is static, you must increase your savings, invest more sensibly or reduce your indebtedness.
Calculate your net worth using simple online tools. A yearly estimate and comparison with the results of past
years will easily show whether your net worth is increasing or not.