Broker Check

Practical Planning Tip: 7 Mistakes Affluent Investors Make - Mistake # 1

May 15, 2024

I have experience working and interacting with many extremely wealthy individuals and there are some common errors that tend to arise.


For me, I find it quite interesting that An individual’s approach to managing their personal finances is shaped by a myriad of influences. These may include their upbringing, community, social circles, and religious beliefs. A lifetime of experiences, and the manifestation of all these influences, impacts one’s relationship with, and attitude towards, money.


Another, often overlooked, factor that impacts the way individuals handle their finances is their level of wealth. Financial planning techniques necessarily differ based on how much money one has. Interestingly, the financial misconceptions held, and missteps made, by individuals can also vary based on wealth levels.


High-net-worth individuals’ money mistakes are typically the result of an overconfidence developed through years of success in their professional life. While a healthy dose of self-assurance will undoubtedly help in achieving initial financial success, it can also be a hindrance to effectively preserving and managing that wealth in retirement. The ability to understand and avoid certain pitfalls, which I will cover, is crucial for ensuring that affluent investors achieve their financial, philanthropic, and legacy objectives.

The first mistake wealthy investors tend to make is that Achieving success in one area of life does not necessarily translate to success in personal finance: If you are financially successful, it may seem like a forgone conclusion that you will also be proficient at managing your personal finances. Unfortunately, this couldn’t be further from the truth. Building and running a successful company involves many skills, including industry knowledge, understanding your market, and perfecting your craft. However, none of those areas of expertise automatically translate into success with one’s personal finances.



Tomorrow I will discuss the second mistake many affluent investors make.



You can WATCH the full video here.