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Even those who seem to have it all figured out don’t know. Like their own clients, money advisors fall victim to the same behavioral biases and end up making questionable or impulsive money decisions.
Read more: I’m a Bank Teller: Here Are 10 Things You Gain From Banking. Check out: 6 Amazing Things Every Rich Person Does With Their Money.
GOBankingRates asked R. J. Weiss, CFP, CEO of private finance site The Ways to Wealth, to percentage the financial moves he strives to improve.
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One monetary move that Weiss has yet to master is minimizing the risks related to his investments.
“I like risk,” he said. More than 90% of my investable net worth is in index funds. I’ve also allowed myself to invest up to 10% in what I need (from equity real estate to individual stocks) and if it exceeds 10%, I’ll rebalance it.
Since index funds are already diversified, investing in them carries less risk than owning a few individual stocks. But like any stock market investment, index funds are still subject to market risk.
Read next: 6 Ways to Tell If You’re Financially Smarter Than the Average American
“It’s a lot less difficult to communicate about how to keep expenses manageable while the source of income increases than it is to work, because, of course, one should commend oneself for one’s hard work,” Weiss admitted.
So while he advises his clients to keep their budgets in check and avoid falling victim to a different lifestyle, he still struggles to follow his own advice.
Unfortunately, lifestyle substitution is a phenomenon that affects not only Weiss, but also Americans of all income levels: more than a portion of six-figure earners live paycheck to paycheck because of it.
Don’t worry about costs.
Weiss said, “For example, when I make plans for a vacation, I regularly think about primary expenses like hotel stays, airfare, and car rentals, and I also consider an estimate of food and entertainment. However, I don’t pay attention to comfortable costs, which leads me to spend a lot more than I expected.
Some of those overlooked expenses include transportation to and from the airport, fees to babysit the dog, and, in the summer months, hiring someone to mow the lawn.
“These go up and make vacations a lot more expensive than I expected,” he explained.
Without establishing clear monetary barriers with friends or family, you may be putting yourself in a precarious financial situation, especially if you’re already struggling to stay afloat. Weiss admitted that she personally had a hard time doing it with her children.
“It’s hard to say no to children, because you have to give them everything and let them do anything,” she said. “Putting up barriers with them has been incredibly difficult, and that’s all I talk about with my partner. “
“As someone deeply rooted in finance, I have a detailed and transparent view of our monetary long-term and how I need things to be. And, although my wife and I talk about money, she doesn’t think about finances on a daily basis. base like I do,” Weiss said.
He explained that while he and his spouse are on the same page about the important things when it comes to cash management, it’s possible for him to do a bigger job by letting the little things go.
“Of course, she’s always right when she poses challenging situations according to my way of thinking, and it’s the most productive solution for our family, but it goes against what I had in mind,” he added.
“Determining the right amount of insurance to purchase has been a difficult task for me. As an analytical person, I sometimes prefer to invest more than spend more on insurance, with the idea that my family would be better off in the long run. run,” Weiss explained.
As her family’s sole source of income, Weiss understands the importance of having life insurance and disability insurance. However, he also admitted that it’s tricky to put yourself in someone else’s shoes and find the right balance between buying enough short-term insurance and making sure your circle of family members receive financial support if something were to happen to them.
Financial advisors are also human, which means they are not immune to the demanding situations and complexities of managing their own money. Like their customers, they’re tempted to deviate from their well-established money plans, and it’s strangely comforting to know that even monetary experts are going through tough times.
In short, no one has it all figured out. The adventure towards monetary dominance is an ongoing process for everyone, adding advisors.
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This article originally published on GOBankingRates. com: I’m a financial advisor, but I’m still struggling to master these 6 money moves