Overcoming Money Mistakes

I always enjoy staring at a waterfall, especially after a good storm. It’s mesmerizing. We’re fortunate to have a beautiful waterfall here in Greenville, SC. Most days it’s relatively calm trip along the Reedy River. But, occasionally, we’ll get a good storm that produces some powerful falls.

I find myself staring at the top, watching the water begin its descent. Then, I’ll focus on middle when the water is in freefall. Eventually my mind finds the bottom as the water crashes off the rocks. ?The repetitiveness of it all makes you feel like you’re constantly watching the exact same water go over the falls, again and again and again. But, in reality of course, it's new water all the time. The stuff I was staring at five minutes ago is now further on down.

Imagine waterfalls as the setbacks in our lives. Or the big mistakes. We focus on them constantly. We replay the events over and over again as if we’re in the same place. But, in reality, the mistake, the setback is now in the past. We’re further on down the river. Time to focus on our new reality, our new place in the river. That’s easier when we feel calm, in control and seemingly on the right path. It’s more challenging when we’re not sure or consumed with a setback, a mistake.

All of us have from time to time, personal and professional setbacks. Here I want to focus on financial setbacks and offer ways to help you keep going, continue to invest in your future.

The first truth: everyone makes money mistakes. I don’t think I’ve ever talked to someone who has a perfect purchase history. They’ve never bought anything they’ve later regretted. I know I have, many times. Likewise, I’ve never met a person who's perfectly managed their finances. Never made an investment mistake. I’ve done my share. I’ve also heard many of the greatest money managers in the world admit the same.

So, what’s the secret to improving our personal finance and investment decisions?

1. Admit mistakes: Recognize when you’re not spending on what you truly want. Sell investments once you realize you made a mistake in analyzing it. ?
2. Seek growth: Continue to learn better ways to handle your finances. Simpler ways to stay on budget. An easier path to reduce debt or fund your investment accounts. Better ways to evaluate investments. ?
3. Remain curious: Pay attention to the world around you. Gather information in all places. What new industries, new businesses are popping up that seem to be attracting a crowd?
4. Play to your strengths: Invest in things you understand well. Avoid those you don’t.
5. Remain humble: Recognize how much you don’t know. How much you can’t know. Avoid overconfidence.
6. Give yourself grace: Realize that despite all your past mistakes, you’re still here. You’re continuing to float down the river. And, that means you’ll continue to make mistakes. So will I. But, because you have shown the ability to overcome them in the past, you should feel confident you can overcome them in the future.

Our financial lives are like the river. We aim for calm. But, occasionally, we encounter a violent waterfall. No matter the reason, if we just keep going, we’ll soon find calm waters again. We’ll find a place where we can catch our breath and realize, yes, we’re still afloat. ?

Mike on the Money on TV

This week, we looked at the investing setup for 2025. Can stocks continue their impressive run? Are bonds ready to cushion volatility again? And, what about restraint? Should we even try to be balanced investors?

Watch to find out if that’s a trick question.

Time for you to respond:

What financial move are you most excited to make in 2025? ?

This material is provided as a courtesy and for educational purposes only.? Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.?

?All views/opinions expressed in this newsletter are solely those of the author and do not reflect the views/opinions held by Advisory Services Network, LLC.

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