Podcast Episode 202: Basic Financial Strategies We Struggle to Stick To

Today’s Wisdom:

If planning was easy to do, we’d never have to worry about retirement. Unfortunately, we often put ourselves in difficult positions financially because we fail to stick to some basic strategies.  

Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.

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What You’ll Learn:

There aren’t any guarantees in life, but there are some simple financial strategies that will almost always result in a successful retirement.

The truth is none of these are a secret. Every one of these strategies we’ll talk about on this episode of the Money Wisdom podcast are understood and agreed-upon universally. The problem, however, is that it’s not easy because these things require structure, discipline and sacrifice.

Just think about this first one: buy low and sell high. While it’s impossible to buy the exact bottom and sell the exact top, you can make investment decisions that stick to this overall theme. Where we get in trouble is most people are their own worst enemy because our behavior is very hard to control with logic. Our emotions cause us to do the wrong things at the wrong time. We see it all the time when the market dips.

That’s why we also say never try to time the market. No matter how intelligent you are and how tapped into the market you might be, you’ll never be able to consistently perform by trying to time the market, but we still attempt to do it anyways. Many times you’re better off just holding your investments over time.

Another strategy that seems obvious is don’t pay more in taxes than you have to. And while we don’t always do this intentionally, it happens to many people because they focus on tax preparation rather than tax planning. If you aren’t doing the latter, you’re potentially setting yourself up for a large tax bill in retirement that you could have avoided.

And finally, the idea of diversification is something we all know about. So why don’t we do this with our portfolio? Sometimes it’s just a lack of education like buying multiple mutual funds that have many overlapping investments. Other times it might be caused by failing to evaluate and adjust your portfolio on a consistent basis.

No matter where you might fall short, and we all do in one area or another, it’s never too late to make improvements to your retirement plan by working with a professional that can help keep you accountable.

Let’s get started with the show. You can listen to it by using the audio player above and click on the timestamps to skip to a specific topic of conversation.

[0:35] – Buy low and sell high.

[2:39] – Don’t pay more in taxes than you have to.

[4:31] – The importance of diversification.

[7:11] – Don’t try to time the market.

[10:04] – The need to keep costs low. 

Thanks for listening to this episode. We’ll be back again next week for another show.

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Final Thoughts:

“The closer you get to retirement, the more money you have, and so it’s easier to let your emotions get in the way when the stakes are much, much higher. You have to be very careful with this when it comes to a lot of investment concepts.”

– Joel Johnson

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