Do you know where wisdom comes from? It comes from learning from your mistakes. Back in 2013, we had an episode where we shared the mistakes we had made. Now in 2019 we are revisiting and updating our list of mistakes and sharing those with you today.
Tune in to this week’s episode of The Money Guy Show as we cover Money Guy misses remastered. We are human and make mistakes, too! By sharing our mistakes with you, we hope that it will help you avoid the financial mistakes we made and continue guiding you on your path toward financial independence.
Here’s What You’ll Find Out in this Episode:
- Not having enough cash reserves: Cash is there to protect you from bad or unexpected events. You should have at least 3-6 months of income available in your emergency reserves.
- Always know and understand where you are investing your money: Sometimes simple is better. Just because that investment is popular does not mean that it is the best for you or your family. Ask questions and gain a proper understanding of your investments.
- Don’t invest your money without a core investment philosophy: What is your Why? One of the first questions you should ask your investment advisor is what his or her investment philosophy is and make sure that you have an investment philosophy as well.
- Be honest about your financial blind spots and limitations: Know what you know and be honest about what you don’t know. It really does take time to learn about investing. Don’t be overconfident.
- Don’t gamble and call it investing: There are some investment products that are incredibly risky. Options are a hot product, but they are time sensitive. Don’t gamble and speculate. Make sure you are going through the order of operations to be successful.
- Having an emotional attachment to holdings: Those emotions will sometimes skew your vision toward your holdings and prevent you from making the smartest financial decisions.
- Don’t be too cheap: Sometimes your desire for saving a buck will place you in a position that is not conducive to your financial situation. Also, don’t sacrifice quality in an effort to be frugal. You may wind up purchasing more often, then.
- Buying used vehicles that are naked and not protected by warranty: There is a point that used cars will have high maintenance costs that overshadow the savings of purchasing used.
- Measure twice and cut once on big life goals and purchases: Just because you can afford the payment does not mean you can truly afford the purchase. The monthly payment is not what you can afford. The actual cost of the item is what you have to evaluate.
- Have a plan (Plan of survival): Planning is paramount. You should have a plan for all scenarios. For example, if you change jobs or start a business, you should have three plans. First, a plan for the worst case scenario. Second, a plan for what you think will likely happen. Third, a plan for when all the stars align.
Becoming Wealthy in Your Lifetime (can be relatively simple):
- Save 15-20% of your gross income
- Avoid debt as much as possible
- Focus on investing in yourself and finding a job that truly does not feel like work
Resources Mentioned in This Episode
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