Top 9 Excuses You're Making that Spell Bad News for Your Financial Future

As a Certified Financial Planner and legacy coach for individuals and business owners, I’ve heard (and sometime used) all of these top money-habit excuses that directly contradict long-term goals. We have, as human beings, an astounding ability to allow fear and the influences of others shape our financial decisions.

These decisions are usually life altering as we create short-term excuses to justify actions that run counter to our own long-term interests. Let’s review the top nine excuses I often hear from individuals:

1) “I want to wait till the markets are more stable.”

It’s understandable to feel unnerved by volatile markets. Waiting for the market volatility to “clear” before investing often results in missing the future return rewarded by the risk. Remember volatility affords you the opportunity to buy your choices on the low side.

2) “I can’t take the risk anymore.”

Every investment has risk, so understanding the risk is important. While you cannot guard against every risk or possible outcome, by diversifying your strategy and investments you will reward yourself with competitive returns.

3) “I want to live freely today and worry later about tomorrow.”

It doesn't have to be an either/or decision. You can live today and still be mindful of the future. By identifying your goals, defining a budget and living within this budget, you will find the path to success.

4) “I care only about income and not growth.”

Income is fine. However, making income your sole focus can lead you down a dangerous road; ask anyone who invested in risky debt obligations in the mid- 2000's. Keep in mind, inflation will erode your future income so some growth is needed to outpace a future devaluation of the dollar.

5) “I can’t sell until my investment returns to its original purchase price.” 

It’s human nature to emotionally attach oneself to past bets, even ones that resulted in a loss. It takes discipline to sell the investment in order to provide future diversity for your portfolio. Become disciplined instead of emotional as you implement your financial plan.

6) “But my investment only goes up.”

Many people have a tendency to hold on to winners too long. It is important to create a disciplined re-balancing strategy within a market sector so your portfolio can reduce future risk. This will allow you to sell the investment at a high price.

7) “But the newspaper said…”

Strategizing your business and making money decisions based on the headlines is like choosing today’s wardrobe based on yesterday’s weather report. The news might be accurate, but usually the market has already reacted to the news as technology provides information in seconds.

8) “My neighbor, uncle or business partner told me…”

The world is full of experts, many who repeat information they’ve heard elsewhere. Keep in mind, even if their information is right, their advice may not take into consideration your personal goals.

9) “I’m too busy to think about this.”

It’s easy to worry about things you can’t change; such as the economy, market, or information from the media. Be careful not to let unnecessary worry cause you to neglect areas where your actions can make a difference—like reviewing your budget and goals periodically.

Reviewing how you think and act toward investing is important as a disciplined and balanced approach will produce great reward as you plan your financial future. Scripture shows us the importance of discipline, "For lack of discipline they will die, led astray by their own great folly" (>Proverbs 5:23 NIV). Death in our finances is not a pleasurable experience and can be avoided by making wise choices.

As the New Year starts, I encourage you to evaluate your current situation and make significant changes in your financial life where needed. God owns everything in your life including your finances, remembering this, will lead and keep you on a path of peace and contentment. Happy New Year!

Guy Hatcher: The Legacy Guy® – is passionate about helping families plan their legacy. His book, Your Future Reflection: How to Leave a Legacy Beyond Money, is available at amazon.com. Follow him on twitter @guyhatcher or contact him at www.guyhatcher.com.

Publication date: January 5, 2014

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