• Terry Herr, CFP®, CLU

Financial Decisions That Will Haunt You Forever


Making financial decisions is never an easy task. Poor decisions can haunt you forever. Here are 5 tips to help you remove the fright from your financial life:

1) Stop Spending more than you earn. There is no fool proof way to completely fail in life than to spend more than you earn. If your cash flow is not under control, you’ll be walking with the Zombies.

2) Not saving for retirement early. If you haven’t killed Zombie on point #1, you will certainly not be saving enough for retirement. You need to slay the cash flow zombie, then you will want to begin investing into a retirement account. Small amounts (see#5) can really add up. Make the commitment now while you still have time!

3) Not teaching your kids about money. So, you made it through scary movie 1 and 2 and you have your cash flow and retirement savings under control. Just like a scary movie, once everything looks like it’s going to be OK, WHAM! You suddenly discover your 40 year old child is a dependent. Whether you live on ‘Elm Street’ or not, you are going to be sucked back into that ‘Nightmare’. It is never too early to teach your kids how to handle money.

4) Failing to understand investment risk. The ups and downs of the market may scare the pants off of you. However, once you understand market risk and diversification, it may be the least scary financial decision you make. There’s a great book call “Misbehaving” by Richard Thaler. He cites a study where investors avoided an investment when they looked at a graph of annual returns (picture lots of up and down bars), but overwhelmingly preferred that same investment when shown a graph of the long term averages (picture a gentle slope upwards). Obviously a picture is worth a thousand words, but it doesn’t show the whole story. It’s just a snapshot in time. Take the time to understand the risks.

5) Be afraid of Starbucks and dining out. 66% of American workers spend $2,000 per year on lunch and throw away 40% of the food they purchase. Stopping at the coffee shop for $2-$5 each morning? With 261 workdays each year that comes to $522 to $1,305 each year. If you work for 30 years, coffee and lunch could cost as much as $99,150 !!! Small amounts really add up. I you invested $275 per month for 30 years and received a return of 7% your future value would come to $325,858. Small daily expense, suddenly look pretty big and scary!*

The way to wealth comes from not being afraid of long term, systematic saving and investing. This Halloween, don’t be afraid to start changing your financial habits. We’re always here to help you make great financial choices!

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or Herr Capital Management, LLC and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Calculations are hypothetical and represent a fixed rate of return which may or may not be achievable.


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