“I have never seen anyone too dumb to become a good investor, but I have seen way too many people be too smart.” - Jeremy Finger
My dad was a medical doctor. My friends would often ask my dad what to do about this pain or that. One time, a friend of asked my dad, “Dr. Finger, it hurts when I raise my arm, like this.” My dad quickly responded, “Well, don’t do that!”
Sometimes its best to know what NOT to do and just avoid doing that.
Here are a few things NOT to do when it comes to investing:
- Have no savings. It strains the emotions if there is not any backup plan for unforeseen expenses. Not to mention, if your investments get a little volatile, the heightened emotions, can lead to emotional mistakes. By the way, I recommend at least 6 months depending on how secure your income is.
- Getting hot tips from friends or someone who has a nice boat or car. In 23+ years as a financial advisor, I have only seen one work out. Get rich s l o w l y.
- Investing for the thrill or rush. Like Russian Roulette, if you win 5 times in a row and blow yourself up once, you still end up with zero.
- Live BELOW your means - Save 10% to 20% of gross income.
- Good investing is BORING. A 7% return compounded doubles your money over a 10-year period. Let time do its thing.
- Keep the investing simple and automatic. The more you have to think about something, the less likely you are to execute it.
Bonus thought: Met with a client of mine, last week. He was discussing an investment in a gas station. The returns seemed pretty good, but he didn’t know much about gas stations. As the complexity goes up, so must the return AND the enjoyment of seeing it through. And are you qualified to see it through?? Complexity occupies the mind, which takes away from other thoughts and joys. Wouldn’t it be better to have a simple investment, that he understood, so he can keep his mind focused on his woodworking or charity work at the animal shelter? I have seen 100s of people waste countless hours and millions of dollars, chasing some unique investment.
Want to know about how the politics affects taxes and markets? Join me on this free webinar: January 19th at noon - CLICK HERE TO REGISTER for Retirement and the Changing Political Landscape with Jeremy Finger and JP Morgan
On the lighter side, I am still training for the marathon. I have been told that you start running slow to build up time running. After a while, you then build up speed. I am not sure about speed, but I ABSOLULTLY have SLOW down pat.
Hope all is well with you and your family. Let me know if you have any questions.
Jeremy Finger, CFP®, CIMA®, CRPC®, CPFA
Founder & CEO
Wealth Management Advisor
Finger Financial Five - 5 points in 5 minutes or less - is to provide you with a weekly shot of useful financial information. My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.
This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.