All of us, as human beings, have an astounding facility for self-deception when it comes to money. As humans, it is common to construct short-term excuses to justify behavior that runs counter to our own long-term interests.
Let’s continue to review a few more of these money excuses to see if you are becoming victim to your own financial excuses.
3. “I want to live for today. Tomorrow can look after itself.”
This excuse is often used to justify a reckless purchase. It is not an either-or. You can live today and mind your savings. Set up both a spending and a savings/investment budget. Saving part of every paycheck must be part of your planned budget. Live within that budget. Deferred gratification is one of the keys to financial success in life.
4. “I don’t care about capital appreciation. I just need the income.”
Income is great. But making income your sole focus can lead you down a dangerous road, especially in today’s low-interest-rate environment. Just ask anyone who recently invested in collateralized debt obligations. Instead, I recommend that most people seek total return (yield and capital appreciation) when investing. In this way, you are able to diversify your investment holdings and historically have been able to earn overall returns that are safer and higher than what you can earn seeking only income. This is particularly important if you are seeking to keep your overall income in pace with increasing prices caused by inflation.
Again, I encourage you to seek professional assistance to plan for your financial future. Be intentional. Avoid sales pitches. Work with a fee-only CERTIFIED FINANCIAL PLANNER™ professional who puts your interests first.
For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s newest white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.