When you ask yourself the question, "How much should I save," consult with a reputable investment services advisor for the best financial planning report. This should save you from making more mistakes.
Take care never to repeat your money mistakes by conducting a thorough financial review of your capital investment every year.
Everyone makes mistakes. But if you can manage to learn something from your errors, your financial problem could turn into a learning opportunity. During my meetings, I see several fiscal mistakes that are repeated over and over again. Make sure that you don’t duplicate these mistakes in your personal finances:
1. Don’t expect unrealistic returns. Some people will create a financial planning report and if they don’t like the result, they’ll ask, “What if I make 20% per year? Then everything will be OK.” As a rule of thumb, plan for the worst and then hope for the best.
2. There’s a difference between financial planning and investing. The financial plan is the blueprint for your financial well-being. Stocks, bonds, mutual funds are tools of the financial plan. Create the overall design, and then choose the specific tools.
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3. Not having measurable goals. Like other investors, you should be able to compare your actual success versus your plan’s returns. Your actual and anticipated returns should move in tandem. “Things feel OK,” is not a suitable answer to the question of “Is your financial plan on track?”
4. Putting the plan away. A financial plan should be dynamic. Check it annually and update figures as necessary. As you come closer to approaching your financial goals and realizing your investment return, your ‘check ups’ should come at closer intervals.
5. Assuming that financial planning is only for the wealthy. Though a plan is crucial for wealthy people, perhaps it’s even more important for a struggling family. If you can barely make ends meet when you have a salary, how will you manage during retirement?
6. Waiting until some crisis arises. Don’t wait for tragedy to strike. Prepare yourself first. What would happen if you didn’t receive a paycheck next week? Is your emergency fund separate from your long-term savings? And, if you used it up, how would that affect the rest of your financial picture? In fact, a good question you should ask throughout your working life is, “How much should I save?”
Make sure that common financial blunders don’t become yours. (Also, avoid passing them on to your children. To find out more about how to teach your children about money, read my article, http://www.infobarrel.com/Its_Never_Too_Early_To_Teach_Your_Children_How_to_Save_Money) Mistakes like the ones listed above can seriously impede your financial security. Learn from others’ mistakes and work on creating a secure financial oasis for yourself.
Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special situation and needs. Past performance is no guarantee of future returns.