The Worst Financial Mistakes I Ever Made – Part II
Written by Jimmie Burroughs
“Earn as much as you can, save as much as you can, invest as much as you can, give as much as you can.” John Wesley
Failing to continue to save after retirement
The reason I’m writing these articles is, to help others to avoid doing the same things I did and making the same mistakes. Today I’ll share the most recent financial mistake I’ve made.
My mistake was, when I first retired, I didn’t realize that I needed to continue to save, at least some. So, I saved only by watching how I spent my money and by not buying things I didn’t need, well mostly. I didn’t invest it; it just lay in the bank drawing no interest. Actually, if your way of saving is a savings account, you are losing money, because the inflation rate is higher than saving account interest. If your way of saving is storing cash, in a few years, it will be worth much less. Now I have a structured way to save and invest. Investing is the secret to planning a good retirement in the first place, and it is also a good way to continue building wealth, wealth that you can use to help needed causes or to pass on to your family.
When I first retired, I did not think it was necessary for me to continue to save. Some ask the question: Is it necessary to continue to save after retirement? The answer depends on how well you have prepared for retirement. Ordinarily, I would say No, it isn’t necessary. I mean you don’t have too if you have an adequate retirement. On the other hand, it isn’t a bad idea to save even if you do have enough, if it is in accordance to good stewardship. Retirement isn’t a time to waste money just because you have it to waste, and to spend it for things you don’t need or don’t even want in order to impress others who don’t care.
There are certain things that require some sort of saving in retirement. For example, if you want to travel somewhere special, beyond the ordinary, which requires a lump sum of money. Like for instance, my wife and I traveled to Israel and spent 11 days in luxury hotels and had a tour guide to take us to all the locations we desired to visit. That required a large sum of money on the front end, money that is beyond a monthly retirement check.
The best way to save and build wealth is through Investment, and that is something that has to be learned. Don’t let that discourage you; remember, even Warren Buffet had to learn how to invest. There was a time when he was also a novice. Learning investment today isn’t hard. There are several good books that have been written by some successful investors. One I would recommend is “Unshakable,” written by Tony Robins. Read the book; it will teach you a lot about investing. Though learning investment is important, it also takes a good deal of research to determine what to invest in. My first article on this subject was concerning trends. Getting in on the front end of trends has made many very rich. Let me say, however, it has never been my objective to be rich, at least like the super-rich. That would require too much of my retirement time attending meetings and managing money.
Some say that investing in stocks is not a good idea; tell Warren Buffet that. Stocks can be bad if you invest poorly, but they can be good if you do your homework; read what others have experienced in stock investing and know what you are doing. Some make all the mistakes while others know the mistakes to avoid. One frontend mistake is paying a stock broker a percentage to buy stocks when you can do it directly by having your own free account like Robinhood.com. Then another mistake is putting all your eggs in one basket. It is recommended to have at least 15 stocks. The more diversified, the better. If you want to be safer and have the least responsibility, invest in the fortune 500 or other index stocks. Here is another mistake: Investing more than you can afford to lose. I like to invest in stocks that don’t cost a lot but have a potential for growth. My stock investments are also kind of a hobby. I like to do it to see what the outcome will be. I realize there is a risk in investing, but that risk can be reduced. I like the way Warren Buffet puts it: “Risk comes from not knowing what you are doing.”
How much is enough anyway? John D. Rockefeller Sr. said, “Just a little more.” Solomon of the Bible said “It is all vanity.” Actually, the amount is not as important as the attitude toward money. The Bible says, “It is the love of money that is the root of all evil.” The love of money is a misplaced love. Love God, family, country and others. Money will pass away but love is eternal.
I believe it is better to have money than not to have it. I like the idea of being able to pay my bills on time and do some things I want to do, and that takes money. Having money is also the opportunity to share your wealth by helping others and, supporting worthy causes and especially your church. The bottom line is, saving and investing to grow your wealth is always a good idea at any stage of life as long as it doesn’t become an obsession, and requires more of your attention than things which are more important. More important than anything else to me is my relationship to God; If you would like to take care of the most important thing in life, a relationship with God, click here.
Disclaimer: I am not a professional stock advisor. The information in this article is based primarily on personal experience and is for information only. Use your own judgement and the recommendations of a professional stock broker before investing in any stock.