Next week I’m hosting a free workshop – “Stage Your Own Financial Makeover: You Can’t Work 24/7/365, But Your Money Sure Can!”
I’m going to give you specific steps you can implement immediately to begin the shift from you working harder for your money than it is working for you. Click here to register.
But before we get to the to-dos, it’s helpful to know the what-not-to-dos.
You might be unwittingly making four common mistakes not realizing just how much they are actually blocking you from what you want. And in this case, that’s experiencing what it feels like to work less yet have more of what you most desire be it time, freedom, choices or something else – without sabotaging your current or future financial health and well-being.
You are too conservative.
I’m not talking about politics here. But I am referring to how you approach investing.
One of the biggest mistakes I see people making is being too risk-averse.
Especially when it comes to the stock market investing, because you fear potentially losing your investment principle you confine your investment selections – in part or entirely – to what will generate income. As a result, you to tend to exclude investment options that will grow by appreciation.
You believe this is safer. But the problem here is that the income earned doesn’t often out-pace inflation.
Gone are the days when an online savings account generated 3.75%! (Gosh, remember when ING Direct first hit the market?!)
If you want your money to work harder for you, you must expand your definition of risk beyond what you may potentially lose today. You have to also consider the opportunity cost of what you might lose in the future.
Be smart about it, but don’t be afraid to be a tad-bit more aggressive with your investment strategy.
You don’t have a money management system.
You either don’t have a system for making your financial decisions, or you have one but you don’t follow it consistently. For example, you don’t have a checklist or use tools or a particular method for:
- tracking your spending (and this is not to be confused with budgets!)
- making your investment buy, sell and re-balance decisions
- managing your cash and creating spending and debt management policies
When you lack a system and structure, you’re probably missing costly financial leaks and dismissing lucrative financial opportunities.
For your money to work harder for you, it needs structure.
A system provides that structure and it ensures you’re operating proactively and strategically with your money. Instead of making financial decisions that are mostly “shoot-from-the-hip” tactical and reactive.
You don’t know your financially-free number.
You will never create wealth from your work – alone.
Wealth is created from recycling what you earn from the work you create. Therefore, the money earned from your investments needs to cover some or all of your expenses. When that happens, well, now we’re talking!
The problem is that most people have absolutely no clue what their expense profile looks like. Therefore, they have no idea how hard their money actually needs to “work” on their behalf.
Just as your money needs structure, it also needs direction. That direction comes from knowing the target, and at a minimum the target is the capacity to cover your expenses.
You abdicate your power.
In order for your money to work for you, you know you need to invest it and that you can’t be too conservative with that investment. What you do can take many different forms – from investing in the stock market, real estate, and other businesses, to diversifying your income or business revenue. But especially when it comes to investing in assets like the stock market, another big mistake I see people making is forgetting that investing requires your active engagement.
If you invest and set-it-and-forget-it, you’ve abdicated your power.
If you hire a professional, but shy away from taking an active role in the decisions, you’ve abdicated your power.
Your money can’t work for you (or at least not to its maximum), if YOU aren’t present!
You’re over the delusion of hard work as a constant state of being. You’re ready to work less and have more. And you’re ready to make it happen.
You can’t if you’re making any or all of these all too common mistakes.
That is what next week’s financial makeover session is all about.
Join me next Wednesday, March 19th if you want to not only learn how best to handle the mistakes you’re probably making, but also discover the mindset and habits you need to practice and the metrics you need to measure so that your money is working 24/7/365 on your behalf!
p.s. have a family member, friend, or colleague interested in having a financial makeover as well? Invite them to join us; share this link so they, too, can register:
The Financial Wheel
The exercise & eCourse that will help you get clearer on how the choices you are making (and need to make) affect your life - today and in the future.