By Steve Harvey
Building wealth is tricky. With all the information we have at our fingertips, you’d think it’d be easy to put together a successful plan. Unfortunately, that’s not the case. In fact, when it comes to financial planning, this information overload can actually do more harm than good.
Over the past few decades as a financial advisor, I’ve worked with my fair share of clients. And interestingly, the vast majority of new clients walking through my door are making the same costly mistakes.
Today, I want to share the 5 biggest financial mistakes I see people make. By learning from the mistakes of others, you’ll save yourself time, money, and major headaches.
Mistake #1: Not Doing Your Own Research
Everybody likes to find a good deal. But if it sounds too good to be true, it usually is. I hate to admit it, but there’s a lot of sketchy marketing that goes on in the financial services industry. Whenever you sign up for a new financial service, you must do your due diligence and read the fine print. Remember, there is no such thing as “free” in this industry; you’re going to pay for it one way or another, whether that be in hidden fees, expensive commissions, or low-quality service.
Mistake #2: Polluting The Mind With “Financial Pornography”
Just because you’ve seen it on the news or read it online, that doesn’t mean it’s true. Listening, reading, and believing everything from media outlets like CNBC and Money magazine is a bad idea. First of all, they usually have some sort of hidden bias or agenda. Second, they don’t know your situation. Depending on the circumstances, what works for one person might wreak havoc for someone else. Financial success isn’t achieved by a one-size-fits-all strategy.
Mistake #3: Being Impatient
We live in an instant gratification society where impatience is the norm. If we don’t see results right away, we think something is wrong and we need to change paths. This is a huge mistake when it comes to finances. Building wealth is a long-term strategy. Instead of looking at progress from a one-, three-, or even five-year perspective, we have to zoom out and establish a big-picture mindset. It’s not easy, but it’s how the game works. Be patient and have faith in the system.
Mistake #4: Not Staying True To Objectives
If you don’t define your goals (and keep them top of mind), this mistake is easy to make. I can’t tell you how many people I’ve seen who are investing to grow their income, but then want to sell their dividend-paying stocks when the share price drops. It doesn’t make sense. They aren’t staying true to their objectives. This is another reason why it’s dangerous to listen to generic financial advice and follow the crowd. The crowd may not have the same objectives as you, so following them would be a mistake.
Mistake #5: Not Getting Expert Guidance
Everything we’ve discussed so far boils down to one common mistake: not talking to a financial advisor. Now, I’m all for finding ways to save time and money in life. But when it comes to building the wealth needed to live a comfortable retirement, you’ve only got one shot. There are no “do-overs,” and one wrong move could have massive consequences.
I see many people who are proud of themselves for “DIY-ing” their financial plan and saving money on an advisor. In my experience, this usually ends in disaster. If we have a serious health issue, do we concoct our own “DIY cure” by watching YouTube videos? No, we pay a doctor for their expertise because our physical well-being is too important to leave to chance.
It’s the same with our financial well-being. A financial advisor will diagnose your financial problems, define your goals, and map out a personalized solution. If you’re interested in learning more about the benefits of working with a financial advisor, we at The Harvey Group are happy to help. Contact us by emailing [email protected] or calling (703) 549-5447. Or, if you’d prefer, simply click here to book an appointment online today!
Steve Harvey is a financial advisor with more than 34 years of industry experience. He is also the founder of The Harvey Group, an independent investment consulting firm based in Alexandria, Virginia. He works closely with middle- and upper-middle-class families to help them address their critical financial planning challenges, from investing with confidence to planning for retirement. Based in the Washington, D.C. area, he works with clients throughout Virginia and Maryland. Learn more by connecting with Steve on LinkedIn or visiting www.steveharveyllc.com.