The Biggest Financial Mistakes I See People Make

The Biggest Financial Mistakes I See People Make

May 2, 2017

By Jeremy Reif, CRPS®, Financial Advisor and Owner of Point Wealth Management

I’ve been in this industry for more than 10 years, which means I’ve seen my fair share of successes, hurdles, and mistakes. At Point Wealth Management, we like to focus on how we can help you succeed, but I think it’s also important to talk about financial mistakes people make so that you can avoid falling prey to some of the same pitfalls. Although I can point to a number of errors that are made by many individuals, two of the biggest mistakes I see people making is being overly confident in DIY financial planning, and blurring the lines between investing and financial planning.

The Difference Between Confidence and Overconfidence

It’s okay to feel confident in where you are financially. In fact, financial confidence is great to accomplish! You may have worked hard to learn how to budget and invest, have seen your wealth grow, and feel you are on the right track.

While many people have successfully budgeted and managed their money on their own, too many people don’t get a second opinion from a financial advisor to see if their strategies thus far are working as they should be. They may assume that they’re already doing a good enough job, or that a financial advisor is only needed for someone with no knowledge of planning and budgeting.

However, the truth is that there often are blind spots that can be difficult for the average person to be aware of, especially when it comes to investing, such as market volatility, understanding one’s risk tolerance, or tax implications. Even if you’ve established a working budget and are on track with your retirement savings, you may not have factored in your estate planning or tax planning. And as it can be hard to separate your emotions from your finances and investing, people don’t always realize that they are making decisions based on emotions, rather than reason or facts.

All of this is to say that you don’t know what you don’t know. While you may feel confident with where you’re at in your financial planning, you may not realize other components you may need to address. Even if you don’t think you need a financial advisor, getting a second opinion from one can help you determine your next steps or reevaluate what you’re currently doing.

Blurring the Lines Between Investing and Financial Planning

A similar mistake I see is when people do start working with a financial advisor and assume they aren’t getting any value out of the service if they don’t see significant returns. In reality, their advisor may be helping them develop a comprehensive financial strategy that encompasses more than just investments, and their investment returns may be based on their risk tolerance and other strategies.

When this happens, it’s often because they are blurring the lines between investing and financial planning. Investing is designed to help you put your money to work and, hopefully, grow over time. However, there’s only so much you can control when it comes to investing, as the markets are volatile. This is where financial planning comes into play.

With financial planning, you can control more and plan out your financial future with better consistency. While life and financial circumstances can change and impact your plan, the act of financial planning can help you prepare should something unexpected happen. While you likely won’t see overnight changes with your financial plan, that’s not its purpose. Rather, it helps guide you through financial decisions you face and keeps you on track as you work toward your goals.

Gaining Clarity

Both of these mistakes are relevant to one another and can have negative consequences on someone’s financial life. Ultimately, you want to feel confident about your finances and planning, but it’s helpful to remain open to advice from a professional. And should you choose to work with a financial professional, don’t go into the relationship with high returns expectations. Rather, judge the level of your professional’s abilities based on the knowledge he or she shares and the guidance he or she provides.

Whether you’re already planning and investing or have yet to get started, I encourage you to contact us. I’m happy to offer a complimentary second opinion and discuss your needs and goals to see if our process may be a good fit for you. Call us at 715-870-2450 or contact Point Wealth Management in Wausau, Wisconsin by clicking this link.

About Jeremy Reif, CRPS®

Jeremy Reif is an independent financial advisor with more than a decade of experience in the financial services industry. He is also the owner of Point Wealth, LLC, an independent fee-only financial planning and investment management firm. With advanced credentials and training in retirement planning and financial planning, Jeremy specializes in helping individuals and families pursue financial independence. Regardless of the services he’s providing, he focuses on talking openly about financial planning, the industry, common questions about retirement planning, and more to help everyday investors gain more confidence in their financial opportunities. Based in Wausau, Wisconsin, Jeremy serves clients throughout the state and can work virtually with clients throughout the country. To learn more, visit and connect with Jeremy on LinkedIn.

Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Point Wealth Management and RWA are not affiliated.

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