Small mistakes add up. 4 errors to avoid in investing in repetition. | Motley fool

The “State of Retirement Planning” study found that 67% of Americans feel good about their prospects, which is 7% compared to last year. I can guarantee you, I would suddenly be between 33% and said, “There is no way I will be ready.” However, this was before I realized that preparations for inclusion include the creation of a list of “tasks” and holding with it.

I was born as a worrrier (or my parents have always claimed), but I enjoy a good list of tasks. Give me a sensation of direction and help me see when I fall off the track. My list included things i Should Make, like maximizing my 401 (K) and errors that I have to avoid, such as a reaction to the knee jerk to sudden changes in the market.

It took me a while to realize that no one was west. Everyone makes mistakes, even seasoned investors. The trick is to correct errors when you identify them and avoid new mistakes whenever possible.

This is where it is difficult because some of the most common mistakes are Easst. Here are four of these investment mistakes and what you can do to avoid them.

1. Introduction of investment in the back burner

When I was young, I remember that I thought I had the time I had to plan a repetition. After all, it was next to my little Maloun at my 60. Damn, it’s still hard for me to imagine I’m at the age of 60, but we’re here. Although I do not intend to retire your retirement, I know that my husband is ticking fees and years.

Even though I got a semi-three to save for repetition, life got in the way. At first it was a great recess. We lost our investment, which we decimated, we lost a volume in the house for which we were foolishly overparted.

Directly on the heels of the large recovery came a brain tumor and the cost of treatment, which largely erased everything left. It was a discouraging time (to put it mildly), but it was also one of the instructive times of my life.

At this point, we committed ourselves to two things: to live under our resources and prefer our investment. Suddenly we paid the bills, spent money on the things we wanted, and invested what was left. It ended when it was clear that we had some serious catch up.

The first “account” we pay every month is our investment. We will set up our household budget on the remaining money. The reason is simple: if we are lucky to achieve the age of retreating, we will need every dimen we have invested.

2. Do you think your match with use is too small to make love too much

In addition to the starting businesses for which he worked, my husband’s employers have always discarded the 401 (K) match. Sometimes it was 3% and sometimes more, but no matter how much it was, I remember wondering if the corresponding funds actually hit the pension account.

Imagine a job that matches the first 3% of the $ 100,000 salary. This is $ 3,000 per year – it is not an impressive terribia until you create a compound interest. If this money came into an investment vehicle with an average annual return of 7%, the company’s match would only provide $ 123,000 extra to get into the withdrawal. This money could do this with a variety of long -term care to repair home.

No matter how many employed offers are, it’s free of charge and you’ll be glad to have them one day.

3. Carrying too many debts

Debt is a sticky thing. It allows you to buy otherwise you can not afford, but it may be difficult to shake as soon as you commit it.

Assumes you have a debt on a credit card $ 10,000 and pay interest for 26%. If you make a $ 250 payment each month, it will take you almost eight years to pay off, and eventually pay $ 13,500 in interest (except the main $ 10,000).

If you should repay this highly old debt and put $ 250 per month for an investment account that earns an annual arrourage return of 7%, it would be worth $ 30,780 in eight years.

The debt can derail your download plans unless you take them out of your life-artistly old debt.

4. Forgot to update important documents

When you are busy, it is easy to enable small things like updating the basic documents, they will fall through cracks. How do you feel about money in your accounts, include savings, control or withdrawal, go to someone you can’t go to when you die?

Suppose you do not check regularly financial documents to check the recipient information. In this case, you risk leaving your hard -earned resources to a former husband, and A charity that is outside the business or other unintended content.

When you check your portfolio and other important documents every year, make sure the volunteers are who you want. Whether you drive a car, bake a cake or invest in download, it depends on a small thing.