Originally answered Sep 12, 2019

Image for post
Image for post
  1. Buying products and services that are not needed, not on sale, not affordable, not compared in price to competitive offerings, the result of high-pressure sales tactics, or just because everyone else is buying them.
  2. Not knowing what a good price is for a purchase before making it, not getting multiple competitive bids for major projects, not waiting for a good time to buy, and not recognizing and snapping up a bargain when it becomes available.
  3. Assuming that by joining a warehouse club you will automatically save money. You have to pay a membership fee that you may not recoup through lower prices, the prices may not always be lower then elsewhere, you may be forced to buy more than you need, and you may be tempted to make unplanned purchases and end up spending more than you intended.
  4. Not reviewing receipts to make sure the prices are correct and that nothing extra was included, not reviewing credit card bills to make sure the purchases were actually made and the amounts are correct, not reviewing financial statements, and not balancing your checkbook.
  5. Getting into credit card debt and then paying the minimum amount each month instead of paying off the full amount and cutting up the credit cards.
  6. Borrowing more than can readily be repaid, paying for credit insurance, not searching for the best loan terms, not knowing what the correct amount of a monthly loan payment should be, not trying to pay off loans early, getting a reverse mortgage, and not refinancing a 30-year mortgage to 15-year mortgage when this becomes feasible.
  7. Not calculating the total costs of home ownership (mortgage, insurance, HOA fees, taxes, upkeep, repairs, utilities, trash collection, etc.) and as a result, struggling to afford them and ending up cash poor.
  8. Paying high commissions, mutual fund loads, and transaction fees when investing.
  9. Not taking advantage of index funds, ETFs, single-choice funds, and zero minimum and expense funds.
  10. Not diversifying investments based on age, circumstances, and personal preferences, and not appropriately balancing the portfolio of stocks, bonds, and real estate by liquidity, market capitalization, foreign/domestic, government/corporate, commercial/residential, maturity, yield, growth, and risk.
  11. Chasing previous investment performance results.
  12. Buying securities because they are rising in price, selling because they are falling, and panicking and getting out of the market when it drops.
  13. Trying to time the market, and buying and selling frequently rather than investing for the long term by buying and holding.
  14. Not using automatic savings and investment plans, and not taking advantage of dollar cost averaging when investing.
  15. Not building and maintaining savings to take advantage of compound interest, and not reinvesting dividends to accelerate long-term growth.
  16. Trying to get rich quickly.
  17. Acting on stockbroker sales pitches and hot investment tips.
  18. Gambling, buying lottery tickets, getting involved in multi-level marketing pyramid schemes, or pursuing risky investments such as penny stocks.
  19. Being pressured into buying a timeshare condo, falling for con artist pitches, or being tricked by scammers.
  20. Withdrawing early or borrowing from a 401K or IRA instead of saving up for a needed purchase.
  21. Not having sufficient liquid savings to provide for emergencies and unexpected expenses.
  22. Not contributing the maximum amount to a retirement plan that will be matched by the employer, or not contributing the maximum tax-sheltered amount to an IRA.
  23. Relying solely on Social Security, pensions, and Medicaid instead of saving enough for retirement and purchasing long-term care insurance.
  24. Buying whole life insurance instead of term insurance, and in an insufficient amount to replace income that would be lost due to death.
  25. Thinking that investing is too complicated and thus a personal financial advisor is the only way to invest. With a little reading, free help from investment companies such as Fidelity, TIAA, and Vanguard, and the use of mutual funds such as single-choice and zero minimum and expense, anyone can manage their own investments if they want to do so.

See also:

Written by

Knowledge Management Author and Speaker, Founder of SIKM Leaders Community, Community Evangelist, Knowledge Manager https://sites.google.com/site/stangarfield/

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store