Blogs in Real Estate

Many people make mistakes with their money for reasons that they really should not.  With the current state of the economy, it is essential to find a financial advisor or wealth management firm because of the ups and downs that the economy is prone to.  By getting financial planning help for major investments, like getting a mortgage, paying for college, or buying a new car, it is less likely that the mistakes you will make will be preventable.  Some of the common mistakes made include:

1. An urge to spend: Perhaps the single greatest weakness of mankind — and womankind — is an inability to resist purchasing things. The late English historian C. Northcote Parkinson summed it up in his 1960 masterpiece The Law and the Profits: “Expenditures invariably rise to meet and exceed available income.”

It’s this impulse to spend whatever is available that becomes the undoing of many otherwise rational individuals. It’s not necessarily human nature; rather, it’s a learned reflex that must be unlearned if you hope to remain solvent. If not held in check, spontaneous spending is a recipe for disaster.

2. Voices from the past: It’s amazing how many people you knew that you no longer see — that is, until your name appears in the paper as the sole beneficiary in rich Aunt Emma’s will. Within a few days, long-lost cousin Calvin phones to remind you how much he always admired you, and how his current misfortune can be resolved if you can just see fit to assist him. And don’t forget your former classmate Ernie, with whom you stopped exchanging Christmas cards a decade ago. His e-mail extols the close camaraderie you two always shared, adding that the technology IPO his brokerage firm is underwriting is certain to be right up your alley — just like the good old days. If you fail to fend off these moochers and hangers-on, you’ll find yourself in deep trouble.

3. Take care with those who are closest: With newfound prosperity, relations with friends and relatives begin to change as you are now viewed as something apart. It seems that admiration and envy are opposite sides of the same coin, and you will be the recipient of both emotions. Your advice and assistance will be solicited, and although you may at first welcome the attention as a novelty, you will eventually find it more burdensome than complimentary. The pressures placed upon you can become overwhelming. You may soon become convinced that fame and fortune constitute a mixed blessing. If you don’t take a step backward, life can become most unpleasant.

4. Loss of anonymity: Although it may seem that sudden prosperity is a cure-all for whatever troubles us, it just doesn’t work that way. Perhaps the problems of meeting the mortgage and financing the children’s schooling may no longer exist, but other problems move in to take their place. You are now a known and recognized commodity in your community and as such, a natural target. You may expect requests for contributions to presumably worthwhile groups. Invitations to attend various functions will be forthcoming. You may even find yourself offered honorary positions or encouraged to become involved in activities for which you have no real interest. The toughest job of all will be saying no. Unless you learn to diplomatically turn a deaf ear to the entreaties, you’ll never have peace.

5. The investment trap: For those without prior investment expertise, coming into money can be an intimidating experience. No one is born with an ability to astutely manage assets: this is a talent that requires knowledge and practice. Perhaps the safest procedure is to refrain from any investment decisions for a full year, while any windfall stays parked in non-risk vehicles such as certificates of deposit, government insured savings accounts and treasury notes. It’s during this period of time that you will seek to educate yourself.

Getting the aid of a Certified Financial Planner in Philadelphia, a New Jersey financial planner, or a wealth management firm from wherever you live, there is a very good chance that these mistakes will be better avoided.  It is essential to avoid these mistakes, with or without the aid aforementioned, because some ups and downs in the economy, unlike the five stated above, will be unavoidable.