FINANCIALLY
Speaking
The BIG Ten of Financial Planning Mistakes
by Jeffrey M . Orth , ChFC , CASL Investment Advisor Representative
Jeffrey M . Orth is a Chartered Financial Consultant , a Certified Advisor in Senior Living , and an Investment Advisor Representative , with over 10 years experience as a business and personal planning , insurance , and wealth management specialist . Jeff is available for group lectures and private consultations . Visit his website at www . ifitfinancial . com or call 408.842.2716 .
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Most people don ’ t take the time to make themselves accountable to their master plan . Why ? Usually it is because they don ’ t have a system in place for gauging progress or perhaps they need a coach …. a Wealth Coach . Having someone to help you develop your master plan and keep you on track is important if you want to get where you are going while avoiding mistakes .
There can be many missteps on the way to realizing your financial goals . Here are the Top Ten Financial Pitfalls you will want to avoid :
FAILURE TO PLAN People fail to establish clear financial objectives and a workable plan to get there . “ People don ’ t plan to fail they just fail to plan .” There is not a magic point in time to start planning … as Nike says , “ just do it !”
IGNORANCE OF THE TIME VALUE OF MONEY Most people do not understand the true potential of investments compounded over time . As I ’ ve stated in previous articles , time is your friend if you start early enough and your worst enemy if you start too late . If you do as well saving over the next ten years as you did over the last ten years would you be excited ?
SPENDING TOO MUCH NOW Lack of discipline or out of control spending will lay waste to the best of plans . What is the process you use to budge ?
FAILURE TO RECOGNIZE THE IMPACT OF INFLATION AND LONGEVITY ON A PORTFOLIO With people living longer in their retirement years , and inflation eating away at their purchasing power , outliving your retirement savings can be a real possibility . And as you get older , you shift from buying things to using services , which have a much higher inflation rate . Are you saving enough to last through your retirement years ?
UNREALISTIC EXPECTATIONS As stated earlier , it takes time to build an estate . Sometimes people expect dramatic gains too quickly . Short cuts rarely work and ‘ get rich quick ’ schemes often turn out to be just that , schemes . Do your goals have realistic time lines ?
LACK OF UNDERSTANDING OF THE TAX LAWS Income , capital gain , gift and estate taxes can be reduced and at times eliminated with effective tax planning . Are you working with an advisor or team that understands the tax laws well enough to help you avoid unnecessary taxes ?
TAKING UNNECESSARY RISK WITH AN UN-DIVERSIFIED PORTFOLIO It is important to determine how much risk you can tolerate to develop a balanced and diversified portfolio . What are you doing to diversify your investments to reduce the risk of unpredictable market fluctuation ?
INADEQUATE PROTECTION AGAINST LOSSES We are talking about insurance here … life , disability , long term care , health , home liability … you get the idea . Can a single event destroy your financial plans for the future ?
PROCRASTINATION This is the most common of the money mistakes . Are you putting off until tomorrow what you should have done today ?
FAILURE TO SEEK OUT AND USE PROFESSIONAL HELP You can either spend the time and money to turn yourself into a professional in all the areas of planning or you can surround yourself with a team dedicated to excellence in the various disciplines necessary to design , implement and maintain an effective plan . Is it in your best interest to go it alone or does it make more sense to seek out the appropriate professionals to help you get where you want to go ?
The best coaches I have had always focused on the fundamentals first and got me to work harder and smarter than I would have on my own . These coaches produced results at an individual and at a team level . Is there a chance that you would benefit from a good “ wealth coach ” rather than going it alone ?
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