The mind is a funny thing… it can push you forward to achieve great feats or it can pull you down into a state of inaction.
Your mindset is incredibly important when it comes to your wealth building and achieving financial success.
However, if you find yourself procrastinating, clouded with indecision or just idling on the spot, we want to motivate you to start thinking about your financial goals and make some plans today.
Here are some of the most common mindset mistakes that can be holding you back from achieving financial success.
Afraid to fail
Fear is powerful and completely understandable when finances are involved. We all remember the GFC… we see the news talking about trade wars… and we can read market updates on a regular basis, the majority of which tend to be reported with a negative view.
There is always some risk involved in investments, but when you engage the services of a professional financial adviser, they will work with you to build a portfolio that minimises your risk as much as possible while still achieving your investment goals. This type of investment philosophy can help reduce your fear and uncertainty.
It’s important to remember that when you invest, you are working towards long-term results. We believe there is nothing to fear from short-term volatility. Adela Ngai, one of First Financial’s advisers says,
“The media is very good at stirring fear among investors, but if you base an investment decision on what you see in the media, you might find yourself selling out of panic when the market goes down, or rushing in to buy out of fear when the market goes up.
We prefer to focus on long-term gains rather than short-term wins.
We are talking about an investment horizon of 10, 20 or even 30 years, so if we have sufficient liquidity in our portfolio and quality assets, we are not so concerned with the day to day fluctuations.”
Waiting for tomorrow
If you are holding off on planning for your financial future because you want to receive a higher salary, redundancy payout, extra bonus or even a family inheritance… you could be facing a long wait. And in the meantime, you are missing out on valuable years of compounding interest.
It’s a common theme that people believe tomorrow will be a better time to start saving and building their wealth… but it’s more important that you establish some achievable goals and start working towards them today.
Set yourself a budget, commit to your plan and if that big payout does arrive, it can be an awesome added bonus to your growing balance!
Inertia has set in
It’s called a comfort zone for a reason… it feels familiar, it never challenges you, and it is easy to maintain. But when you are stuck in your comfort zone, you rarely make changes that will benefit your long-term financial outlook.
How many people have multiple superannuation accounts? Or a mortgage that hasn’t been reviewed for many years? Or even something as simple as finding a lower-cost energy provider? Spending more than you need means you aren’t saving as much as you could.
Finding opportunities to save money will help improve your overall wealth building abilities. Some straightforward financial coaching could lift you out of your state of inertia and keep you accountable for your future wellbeing.
Earn more, spend more
You’ve heard the phrase… and quite possibly you’ve been living the life. As your wage increases, so does your spending. ‘Lifestyle inflation’, as it has been called, has a tendency to impact your ability to save.
Even if you do continue to receive pay increases over your working life… the pay cheques will eventually stop. And at this point, you will have reached retirement. If you haven’t taken the time during your working years to save and plan, you might find yourself dramatically impacted and having to budget for basics like food and utilities.
We cannot stress enough the importance of preparing for the years to come. You want to be able to enjoy your retirement without financial pressure.
Relying on chance
Finally, it’s important to understand that building your future prosperity takes some work… it doesn’t happen by chance. If you are the type of person who likes to pick up the bill when you dine out with friends, or you regularly give beautiful birthday gifts… you may need to curb some of your spending. We aren’t saying you need to become Uncle Scrooge… but put some money towards your future first, then pick the Moët & Chandon over the Bollinger.
If you would like to find out how First Financial can help you on your wealth building journey, please contact our team today.