Today’s Prep:

Equipping Points:

We all tell ourselves financial lies from time to time. Let’s talk through some common financial lies we tell and how much trouble it can cause. What can you do instead?

If you decide to borrow money from your 401(k), how likely are you really to repay that? It’s hard to put the amount back in as a large sum. We all have to borrow money along the way, but consider the most efficient way to do so. If you borrow money from your 401(k), pay it back as soon as possible.

Is the stock market rigged? It might feel like it’s always against the little guy or too complex to get in. Buying stocks is like buying a piece of a company. On the backside, there are all kinds of derivatives that traders are doing, which is what can make it seem overwhelming and complex. What impacts you is the performance of the company you bought a stock in.

With so much risk in other places, you may be lying to yourself and thinking that the bank is safest. While you won’t lose money in the bank as you would in the stock market, you’re actually losing money slowly due to inflation. That means your purchasing power is going down. You always need money in the bank, but for long-term growth, it’s not the best.

This past year has been tough, so you might be saying, “I’ll get more serious about saving next year.” Saving systematically is the best way to save. Using a 401(k) or auto-draft for an IRA is going to help you keep in the habit of saving what you’ll need for the future.

Do you assume you and your spouse will be able to take care of each other on your own when you get older? Think about the long-term care needs. It’s noble to think you’ll take care of each other, but life sometimes has other plans. Always plan for those unexpected things.

Listen to the entire episode or skip ahead to a particular quote using the timestamps below.

1:00 – How often do people borrow money from their 401(k)?

2:42 – The stock market seems rigged.

5:04 – Isn’t the bank the safest place?

7:05 – Maybe I’ll get more serious about investing next year.

9:44 – We’ll take care of each other when we’re older.