The One Thing That's Causing You to Miss Out on More Money

The One Thing That's Causing You to Miss Out on More Money


I’m a financial planner. I take deep dives into people’s personal finances for a living—and every day, I see smart people making good money who fail to build wealth.

They’re guilty of doing one thing that causes them to miss out on earning more, investing more and growing more money for themselves.

Even though they’re intelligent, motivated and successful, they fail to live up to their fullest potential because of a very simple mistake:

They don’t take their finances seriously enough.

Are You Messing Around With Money?

You’d be surprised at how often I see couples and households who bring in multiple six figures’ worth of income each year… but they’re living paycheck to paycheck and struggling to save, much less invest.

Those are the worst-case scenarios of people who could be incredibly wealthy, but they don’t take their finances seriously enough because they’re too preoccupied with looking rich.

Then there are people who are doing a little better; they know they need to prioritize saving and investing their money and they do a good job at nailing the fundamentals:

  • Create an emergency fund
  • Contribute at least enough money to a 401(k) (or similar retirement plan) to get the employer match—and work toward maxing it out
  • Pay down debt (and avoid high-interest debt, like credit card debt)
  • Leverage a Roth or traditional IRA
  • Invest in a taxable brokerage account

 

And yet even after taking all these steps, they’re missing out because they’re not exploring every opportunity available to them to maximize wealth.

They don’t:

  • Question their investment strategy or fact-check their own beliefs about investments
  • Plan for taxes, both today and into the future
  • Fully understand their stock options or other equity compensation

 

And worst of all, they just assume they’re doing the right thing because they’re saving and investing money.

Yes, those are good things to do. But they’re not the only things you need to consider if you want to maximize your potential for building wealth.

Saving in Retirement Plans and Investing in Some Index Funds May Not Be Enough

Does this sound familiar? Have you realized that you could make more strategic decisions that will add more zeros to your net worth over time?

Are you considering that maybe there’s stuff about personal finance and investments that you don’t even know you don’t know?

We all have blind spots—and the blind spots aren’t the problem. It’s failing to recognize that you have them, and that they prevent you from doing the most possible with your money.

That is one of the biggest mistakes you can make.

What You Can Do About It (and How to Start Making the Most of the Money You Earn)

Often, this is where the value of financial planning lies. Financial planning isn’t just about trying to fix things when they go wrong, or to get people out of financial problems.

Good financial planning, and much of the work I do with my most successful clients, is about identifying opportunities and maximizing potential.

It’s about seeking out every possible choice available—and then doing the analysis and research to make the best choice possible.

It’s about going from, “Yeah, we’ll be okay,” to “We’re living our life to the fullest right now—and we get to do that while knowing we’re building significant wealth for the future, too.”

Do You Want to Settle or Reach for the Biggest Success Possible?

It’s fine if you want to settle for “Just okay,” or if you want to assume that what you have going on right now is as good as it can get.

But if you want to go beyond that, and see what possibilities are really out there for you, it’s time to uncover those opportunities. Here are a few steps that can get you started:

1. Stop making assumptions. Don’t simply assume you’re doing all you could be to increase your net worth. There might be opportunities to grow your wealth that you’re not even aware of right now.

2. Challenge your existing knowledge. I can’t tell you how many people come to me absolutely convinced they know this or that about finance or investments—and they’re dead wrong. We’d all benefit by asking more questions and periodically testing to see if our knowledge is legitimate, or if we’re just buying into money myths.

3. Consider the source. As you explore options, ask questions and seek more knowledge, consider the source of information as you receive it. What bias does that person or publication have? Do they benefit by you taking a certain action? I don’t suggest this to make you paranoid, but to encourage you to be aware of conflicts of interest or biases that might not give you the bestinformation or solutions for your situation.

4. Work with professionals. Unless you’re dedicated to learning comprehensive financial planning, investment management and tax planning, build a team of professionals around you who can serve as guides, coaches and objective third parties.

You’ll not only benefit from their expertise, but from their perspective. Good advisors and experts can point out blind spots, make you aware of opportunities you might have missed and steer you around mistakes you didn’t even know you were making.

 

This article was written by Eric Roberge from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever.