Bad financial habits plague all investors. Crash Proof Retirement System Founder Phillip Cannella explains how to identify those bad financial habits, what those habits are, where they come from, and how to overcome them:
“We all have bad habits. Some procrastinate, others are extremely disorganized, but what are some of the bad financial habits that are holding back Americans from achieving their saving and investing goals.
Today, I’ll tell you the worst habit all savers and investors face, and the best way to overcome it. But first, think about where you learned to manage money.
According to recent statistics you most likely learned about your finances at home, or by watching your parents or older siblings. The Consumer Financial Protection Bureau reported that parents were found to be critical in forming their children’s financial literacy. When parents have bad money habits, they pass those habits on to their children, and that’s a study from asset management firm T. Rowe Price.
If you’re a parent here are three good habits to instill in your children to give them a good financial start. 1. Have your children research student loan options to understand the impact those decisions will have on their future. 2. Have them get a credit card and pay the balance due every month to build early credit. 3. Do not have them turn down minimum wage jobs, especially if it’s in their chosen profession. This will give them experience and income.
Now as promised, what’s the worst financial habit for parents and children a like? It’s called instant gratification. Many people young or old are guilty of this because we all live in a world where we want everything and we want it now. This is why time and time again investors get burned on the stock market, because they refuse to follow the Cardinal Rule of investing. Buy low – Sell High. They never sell. They’re always after bigger gains and more gratification.
Now the best way to overcome this and the simplest is to exercise discipline and delay that gratification. Don’t get sucked in by the possibility of receiving interest gratification in gains today that can disappear tomorrow. That’s gambling. Find an investment that is guaranteed to grow your money and never step back. That’s peace of mind.”
To hear more stories that will impact your financial future join Phil Cannella and Joann Small, this Saturday at 11 AM on The Crash Proof Retirement Show, heard on Talk Radio 1210 WPHT in Philadelphia, and online from anywhere in the world, at https://crashproofretirement.com/radio-show/.