Welcome back to our continuing series, The 10 Beliefs. We’ve outlined the seven most common mistakes we see people make in planning and saving for retirement. In our last post, the fifth belief, we shared our belief that you should never guess with your finances. Now we’re going to walk you through the sixth belief, you should never made decisions based on politics.
If you missed a post, or would like to start at the beginning, scroll to the bottom of this post for a complete listing.
Belief #6 - Never Mix Money and Politics
Some things just don't go well together... Water and oil, vinegar and milk, toothpaste and orange juice... Politics and money choices.
Yup, it's true. We don't think you should ever make your finances decisions based solely on what's happening in the political word. But divorcing your emotional reactions to politics from your decision-making is difficult.
Most don’t keep what’s happening in politics out of their money choices. But mixing your money with politics is a good way to end up with less money.
For example, I recently had a client order me to sell them out of their investments because they were afraid of the current political situation. Her investments had actually gone up, but her fear about the current political climate had her making ill-advised money choices.
And every four years, I have clients sell out of the market because of fear. That choice often costs them… And for close to half of them, they still aren’t back in the market.
It’s not their fault though. The media has us twisted up in terror over the future. I mean, how many times can you hear “the sky is falling, the sky is falling,” before you believe it and run.
You need to divorce your political fears from your money decisions.
It’s not easy, but here are three tips.
First, turn off your television and stop checking your investment balances on a daily basis. While you don’t want to be in the dark, the more you watch it, the more that fear will take root.
Second, get behavioral coaching from a fiduciary financial advisor. They’re legally bound to act in your best interest. So if fear screams “sell” they’ll tell you no and walk you through the emotion.
And third, remember that this time probably isn’t any different. The media has been screaming “the end is neigh” since its inception. Cave men probably read the same attention-grabbing predictions of doom on their stone tablet newspapers.
Okay, that’s a slight exaggeration, but you and I both know that fear sells, and the media uses it.
A Custom Financial Blueprint and ailored Investment Strategy can help give you confidence in your plan and investments. Don't give in to panic and fear.
We've talked you through six of our ten beliefs. From eliminating guesswork and fear-based decisions, to getting help tailored to your situation. Next we're going to talk about bring money into the light in your relationships. It's common for couples to avoid conversations about money--after all money is one of the top reasons for divorce in the U.S.. But we believe you need to talk about your finances with your partner or spouse. You can read that here.
You can also grab all of the mistakes and beliefs in a free download. Grab it here.
