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Practical Planning Tip: Lessons From My Grandfather - Learning From Your Investment Mistakes

February 06, 2024

Today’s Practical Planning Tip from my grandfather is Learning from your investment mistakes: It’s axiomatic that a sound investing process minimizes one’s mistakes. However, nothing is foolproof. The important thing to remember, when errors are made, is that one can learn as much from their mistakes as their successes. My grandfather definitely didn’t get everything right when it came to his personal finances. Sometimes he chased high yielding stocks or blue-chip companies that were financially struggling. Many of his investing errors took place earlier in his investing career when he could afford to make them. As he got on in years, the lessons that had been learned resulted in fewer missteps.

My grandfather also should have been a bit more explicit on how he wanted certain things handled after his passing. I believe that one of the main reasons he didn’t do enough planning was because of his optimism and faith that things will work out. Things did work out and, as I’ve previously noted, I extol the virtue of investing like an optimist. However, when it comes to personal finances, it’s also important to plan like a cynic. This balanced approach helps prepare families for whatever scenario may present itself.

Practically this means being overweight stocks in your portfolio, but it also means having the proper insurance coverage and estate planning documents in case life throws your family an unexpected curveball.

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