Jan 14, 2018
Some people think that they’ll never be financially secure unless they win the lottery.
But in reality, accumulating wealth depends not on luck, but on making smart decisions with the resources you already have.
Avoiding these seven mistakes will help you make decisions that will give you a great chance at putting yourself in a strong financial position.
Not Having a Plan
One of the most common mistakes when it comes to financial planning is not having an actual plan in place. Making an investment without a plan is as risky as taking a roadtrip to a new place without a map.
Carefully planning out your financial strategy involves working with your financial adviser and setting milestones - where do you see yourself in 10, 20, 30 years and how will you get there? Without such a plan, you could end up mismanaging a lot of money.
Having Unstructured Goals
A financial goal is more than just a dream. You may have a dream of owning your own home or an early retirement. But concrete goals are the stepping stones that help you achieve those dreams. In fact, it’s been said that a goal is a ‘dream with a deadline.’
Just sitting back and talking about your very general, broad plans, will not help you. And thinking that ‘one day’ you’ll live your dream won’t get you closer to living it. Don’t make the mistake of leaving your financial success to chance!
This mistake goes hand-in-hand with the one on not having structured goals. If you don’t take the initiative to get your plans in motion, then nothing will ever happen. It’s tempting to wait until you have perfect circumstances before you get serious about your financial plans. But the best time to start your planning is right now.
Not Having a Backup Plan
Things might be great right now. The ‘Plan A’ road to wealth might be working out just fine. But what if the stock market crashes? What your property portfolio takes a hit? Heaven forbid, what if you get injured and can’t work?
It’s important to plan for the worst, have a plan ‘B’ and maybe ‘C’, and protect what you’ve worked so hard for.
Not Thinking Long-Term
It’s imperative that you think much further down the road than the here and now. Unless you win that lottery, you’re not going to get rich overnight. You need to carefully outline the necessary steps to reach your financial goals over the course of many years.
Short-term thinking also negatively impacts your ability to save. If you can’t see the bigger picture, you may get bogged down with unnecessary debt and excess spending.
Not Taking a Financial Snapshot
You can’t determine how much you need to save or for how long unless you know where you’re at right now. Do you have a positive or negative cash flow? If you have extra funds, how much and where are they going?
Not Seeking Professional Advice
The last mistake which most people make is that of not getting expert help. They like to think they can go it alone, but it’s a huge disadvantage to attempt financial planning blindfolded.
As you endeavor to save, invest or buy, you’ll likely hear a lot of different opinions from those around you. But if you’re equipped with the facts about your situation, you can confidently make the right decisions … for you. A professional financial adviser can help you fully understand your circumstances.
Expert Financial Advice
For a no obligations discussion about your needs, reach out to our team here at Calder Wealth Management. Call on 08 8373 3333 today to schedule an an appointment.
- Ben Calder, Private Client Adviser
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