5 Wealth Management Mistakes You Shouldn’t Make
By Tony Yeung, Originally Published at The Finanical Examiner “5 Wealth Management Mistakes You Shouldn’t Make”
1.Only Invest in the US and the EU
You may think developed countries, such as the US and the UK, are safer to invest. The security is not guaranteed anymore. While many politic issues are involved in the EU and the US, many people are looking for the investments beyond these developed countries.
Although many people still prefer to invest in the developed countries, a few investors have been looking for expanding their investments in Indonesia, Chile, and Singapore. Individual investors should do research on these new markets because the local law and restriction can be very different from the developed countries. The research can also provide good information to decide whether these countries fit into the investment portfolios and the overall investment strategies.
2. Only Invest in Intangible Assets
Many people only think the investments should be stocks, securities, and bonds only. Perhaps these investments are cheaper for entry and higher liquidity, it does not mean that these types of investments are the best in the market.
Many investors understand the values of physical assets, such as properties, and they have been investing in private and commercial real estate in different places. Likewise, they have been investing in land, gold, expensive watches, artworks, and even wines.
Real estate is the most popular assets in their portfolios because it can balance out the volatility of stocks. Also, some stocks are considered as high-risk investments. Although it is important to invest physical assets, the lack of liquidity and the high investment price turn off many smaller investors.
On the other hand, the physical assets are not susceptible to market swings. They pay off over the long-term (i.e. 10 years or even longer).
3. No Saving Strategy From a Financial Plan
Although investing is the number one way to become wealthy, many people forget the concept of “cash is king” — the idea of saving is important. A good financial plan should include two things: investment and saving. A good investor focuses on increasing the cash inflows and reducing the cash outflows. The saving strategy can become a big part of the investment.
Although the wealthy investors are not wasting money, they also think the importance of earning extra income as the way to achieve their financial goals quickly. Remember, there is no limit to how much money you can make.
4. No Control on Spending
Many people believe that wealthy people spend like no tomorrow. In fact, it is totally opposite. Wealthy investors count every single penny from dry cleaner costs to attorneys and accountants.
The clever wealthy investors know how to control their expenses, and they use the money for investment. In their perspective, a good spending attitude is important for the future investment. Spending overvalues products or services is not a good way to save money.
5. Comparing to Others
Many people are living paycheck to paycheck. Comparing your income to others cannot create wealth.
People often compare their situation to some other people to justify being “better off”. They also look at the other people’s finances, job position, etc.
However, this cannot give you any advantage to be wealthier. It has no difference between a talker who only talks about things yet not doing anything to achieve their financial goals. So, don’t compare your financial situation to someone else’s.
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About the Author
Tony Yeung is a digital marketing specialist and the owner of Apartment Number 2, a consultancy focused on helping entrepreneurs and marketers see results with SEO, social media, and content marketing. Apartment Number 2 has worked with a range of clients from Publishing Company and Medical Company to a new startups.