B – Investing mistakes
Not knowing tax laws, churning, going with the current craze, holding losers and selling winners, ignorance of what $ must do, ignoring the obvious, impulsiveness, impatience, delay, looking at past performance to guess the future, no goals, no research, not changing with the times, not reviewing confirma¬tions, not knowing how much you can lose, over-concentrating, over diversifying, putting tax considerations 1st, random selection, not being realistic, wrong insurance.
We’re good at fooling ourselves. It’s a mistake biz; best investors know when they’ve made a mistake and how to get out fast. Selling is hardest. Sell it if it drops l0%.
C – Other
- You’re in trouble if over 25% of your take home pay goes to credit cards and personal loans (include car loan but not mortgage, rent, food and utilities).
- You’re in trouble if three of the following are true:
- you get new loans to pay for old loans;
- you don’t know how much you owe;
- you charge items because you have no cash; or
- you borrow to pay for food and utilities.
- Your rent or house payments shouldn’t be more than l/4 of your gross income.
- Pay off credit cards lst; then get rid of them. Cut back on vacations, toll calls, and enter¬tainment.
- Buy off season and in bulk.
- Don’t buy anything on time.
- Don’t gamble.
- No pets, except for security.
- Ready-made glasses.
- Save receipts; send in warranties.
- Don’t be tempted by ‘specials’ and sales unless you have planned for a long time to buy the item.
- Rent your garage or yard for storage.
- Use rechargeable batteries and a battery checker.
- Take your lunch to work to save $l000/yr (in ’92).
- Have a certain % of each paycheck automatically put into a savings account.
- Put aside three to six months income for emergencies.
- Save your tax records at least five years.
- Use CONSUMER REPORTS.
Make saving a challenge, a game.