Are you doing more harm than good to your financial life? If so, listen up. It’s time to get out of your own way.
(Click the featured times below to jump forward in the episode)
[1:08] – Allowing Fear And Greed To Dictate Your Investing Habits.
- If you’re allowing fear and greed to dictate how and when you invest your money, you need to get out of your own way. What you’re doing is less of an investing strategy and more of a reactive behavior. Operating on emotion can get you in trouble. It’s impossible to time the market, and trying to do so can hurt your portfolio. Rather than being greedy when the market is up and fearful when it’s down, understand the structure of your portfolio. Determine how much risk exposure you should have in the market, and develop an investing strategy that’s rooted in fact, not emotion.
[3:06] – Making Decisions To Save In Taxes.
- We talk a lot on this show about tax planning, and it’s important to do so. After all, nobody wants to pay more to the IRS than is required. However, if you’re investing solely to save in taxes, you could be missing out on bigger gains in the market. Sure less gains mean less taxes, but they also mean less money in your accounts, right? Sometimes it’s better to bite the bullet, and take the pain to recognize the gain.
[5:50] – Leaving Too Much Money In Cash.
- Get out of your own way when it comes to leaving money in cash. Whether you’re scared to get back in the market after 2008, or you just haven’t gotten around to investing, your inaction is still a decision. If all of your money continues to sit in the bank, it will eventually lose value as it lags behind the level of inflation. Fear shouldn’t be a factor in keeping you completely out of the market. If it is, see point number one. Of course we want you to keep some money in cash. An emergency fund is a necessary tool. However, too much liquidity is inefficient. Put a plan in place, and be prudent with your money.
Check out some other recent episodes
In part two of our series on the SECURE Act, we talk about some of the downsides to the changes. Eric explains the stretch IRA and what impact the SECURE Act made on it.Read More
What happens if you’ve maxed out your 401(k) contribution limit? When is a good time to make a Roth conversion? Eric answers three questions from the mailbag this week all pertaining to the options you have when it comes to saving for retirement.Read More
Are you considering making a move this year? When it comes to home buying or selling decisions, there are a lot of factors to consider. Eric answers a few questions from the mailbag related to real estate.Read More