Here is a short article from the Motley Fool explaining the six biggest mistakes people make when investing. When I read them my first reaction was duh? That’s all common sense, but then I realized for many good people even saving and basic investing is not so common.
The article makes one very good point, virtually everyone, even financially irresponsible people can afford to save… if they do it before they do any other spending. If you make $50,000 a year live like you earn $45,000.
Succeed by Not Failing
When asked how to succeed in life, Charlie Munger once replied: “Don’t do cocaine. Don’t race trains. And avoid all AIDS situations.” His point: Success isn’t just about what you do. It’s also about what you don’t do, and you can be successful in life just by avoiding major, obvious mistakes.
By: Brendan Mathews
The same logic applies to investing. In his famous 1975 essay The Loser’s Game — later expanded into a best-selling book — Charlie Ellis compares investing to amateur tennis. Using statistical work and theories developed by scientist Simon Ramo, Ellis points out that amateur tennis players rarely win matches with brilliant shots. In fact, 80% of the time, the winner of an amateur match is the player who makes fewer mistakes. So if you’re a beginner who wants to improve, you should start by mastering the basics. Here are six of the biggest mistakes an investor can make, a half-dozen financial shots into the net. If you can avoid them, the odds are stacked in your favor.
Source: Motley Fool Stock Advisor
And read this from the Motley Fool if you think you can’t save.
Reuters reported on this Federal Reserve survey:
Many Americans are not financially prepared for retirement, with almost a third of working adults without savings or a pension, according to a Federal Reserve survey published on Wednesday.
The Fed’s 2014 Survey of Household Economics and Decisionmaking found that about 38 percent of the more than 5,800 respondents have either no intention to retire or plan to keep working for as long as possible.
“Thirty-one percent of non-retirees have no retirement savings or pension, including nearly a quarter of those older than 45,” the Fed said.
“Even among individuals who are saving, fewer than half of adults with self-directed retirement savings are mostly or very confident in their ability to make the right investment decisions when managing their retirement savings.”
The survey, which was conducted in October and November last year on behalf of the Fed board, also found that among lower-income respondents, whose household income is less than $40,000 per year, 55 percent plan to keep working as long as possible or never plan to retire.