Today’s Prep:
While it’s easy to slip into a routine, some of the habits you’re developing might do more harm than good. Eric offers tips for breaking bad financial habits.
Equipping Points:
00:51 – You Can’t Ignore Your Account Statements.
- It’s easy to do, but you shouldn’t fall into the bad habit of ignoring your account statements. You need to know what’s happening in your portfolio, and when you do, your statements can actually be a helpful tool. They can show you how your money is performing against the market.
1:54 – People Don’t Like To See Negatives In Their Accounts.
- Unfortunately, markets don’t always go up. Volatility is a fact of life, but you can’t ignore your statements. If you’re uncomfortable with the amount of risk in your portfolio, don’t stick your head in the sand. Have a conversation with your advisor about risk tolerance.
4:30 – Are You Addicted To The Bull Run?
- Many investors have become addicted to the long bull run we’ve seen on Wall Street. They’ve taken on too much risk, and they’ve forgotten what happened in 2008. While we don’t know what will become of the recent volatility, many bullish investors will be in for a shock should they let this bad habit continue to dictate their investing strategy.
5:00 – Don’t Forget To Take Your Chips Off The Table.
- People always talk about “paper losses,” but the same thing could be said of your gains. Your gains aren’t actually gains until you sell, so if you’re heavily invested in a risky portfolio, you need to think about removing some of the volatility.
6:00 – Don’t Procrastinate.
- Procrastination is a choice. It’s a choice to do nothing, and it’s actually one of the worst things you can do. We tend to procrastinate making financial decisions for a number of reasons. Maybe you’re afraid of making a change, or maybe you just don’t know what to do. Regardless, procrastination is a bad habit that could lead you to serious trouble in the long-term. You don’t have to know every step of your path to financial freedom. You just need to take the first step of reaching out to a financial professional.
Today’s Takeaway:
“There’s a saying I heard, and I love it. It says the best choice you can make in any situation is the right choice. The next best thing you can make is the wrong choice, and then the worst thing you can do is make no choice. – Eric Peterson“
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