Psychological Roadblocks And Retirement Goals? With Mike Pettigrew June 24, 2018
Psychological Roadblocks And Retirement Goals With Mike Pettigrew
Greed and the desire to get as much as they can while they can and yes FOMO, the fear of missing out as we discussed earlier. But, how does greed create roadblocks to financial success? Isn’t getting as much as we can while we can a good thing where the money’s concerned? In fact, isn’t that the very definition of financial success? Well, maybe, maybe not. Why? Because financial success isn’t just about obtaining money, it’s about protecting it and it’s about spending it wisely, and all of that depends upon good decision making. As everyone knows one of the key drivers behind the financial crisis was a subprime mortgage crisis caused in part by this thing called Predatory Lending Practices. Millions of Americans were talked into attempting to finance homes that they really couldn’t afford, many individuals were victimized by dishonest lenders, yes! But many of the victims may bear some responsibility also. Why? Because they allowed their judgment and their more rational instincts to be clouded by greed and ended up making terrible financial decisions because of it. On some level, many were likely aware they were purchasing bigger costlier homes than they could practically afford, others possibly realize they really didn’t have the financial stability or foundation yet to afford a home at all. But they allowed themselves to be manipulated. Why? Because they instinctively want to get as much as they could at that moment. The bottom line is that greed, yes! Can compel us to spend more money on something than we can really afford to spend. That makes it a roadblock to financial success because whenever you’re spending more than you can afford and taking on debt a day of reckoning, is eventually inevitable. But you know there are other ways in which greed creates roadblocks, for investors within ten years of retirement for example or those who are already retired. One of the most common problem is that it delays or prevents you from shifting your focus away from growth and toward income. There’s a stage of your life when it’s smart and reasonable to focus on growing your assets, it’s understandable when you’re in your thirty’s, when you’re in your forty’s, when you want to get as much as you can while you can even if that means investing in riskier assets. But after the age of fifty or so when you’re part of the income generation, it’s more reasonable for most people to start focusing on protecting what they’ve already earned. And on allocating it to provide a reliable income stream for retirement. In fact, regular viewers know that I believe this is perhaps the most important psychological adjustment that people need to make as retirement approaches.
**Disclaimer: Sound Income Strategies, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not an indication of future results. Be sure to first consult with a qualified financial advisor or tax professional about your specific financial situation before implementing any strategy discussed herein.
Guest: Mike Pettigrew