Smart investment tricks can help you make the most of your money

Smart investment tricks can help you make the most of your money, no matter what your financial goals may be. Whether you're looking to save for retirement, purchase a new home, or simply build your wealth, there are a number of strategies you can use to maximize your returns and minimize your risk.

One of the most important smart investment tricks is to diversify your portfolio. This means spreading your money across a variety of different types of investments, such as stocks, bonds, and real estate. By diversifying your portfolio, you can reduce the risk of losing all of your money in one bad investment.

Another smart investment trick is to invest in low-cost index funds. These types of funds track a market index, such as the S&P 500, and can be a great way to get broad exposure to the stock market without paying high fees.

Another smart investment trick is to invest in real estate. The real estate market in the United States is currently strong and many experts believe it will continue to grow in the coming years. Whether you invest in rental properties or flip houses, real estate can be a great way to build wealth over time.

Another smart investment trick is to invest in yourself. Investing in education, training, and other self-improvement opportunities can pay off in the long run by helping you earn a higher salary or start your own business.

Finally, it's important to remember that smart investment tricks involve taking calculated risks. While it's important to minimize risk, it's also important to remember that there is no such thing as a completely safe investment. By taking calculated risks and being patient, you can maximize your chances of success.

In conclusion, smart investment tricks can help you make the most of your money and reach your financial goals. Whether you're looking to diversify your portfolio, invest in low-cost index funds, or invest in yourself, there are a number of strategies you can use to maximize your returns and minimize your risk. Remember to always do your own research, and consult a financial advisor if you have any questions or concerns.

TAGS

Stock trading success

Forex trading tips

Day trading strategies

Options trading success

Trading psychology

Risk management in trading

Trading plan template

Technical analysis for trading

Trader mindset

Trading education

Stock trading for beginners

Successful trading strategies

Algorithmic trading

Trend trading techniques

Trading indicators

Candlestick patterns for trading

Swing trading success

Futures trading tips

Trading journal

Trading mentorship programs

Trading discipline

Trading risk management

Trading lifestyle

Trading communities

Trading podcasts

Stock market trading

Trading software

Online trading platforms

Trading bots

Trading signals

Trading courses

Trading blogs

Trading books

Trading webinars

Trading apps

Trading chat rooms

Trading newsletters

Trading podcasts

Trading videos

Trading podcasts

Trading seminars

Trading bootcamps

Trading simulator

Trading competitions

Trading social media

Trading communities online

Trading forums

Trading mastermind groups

Trading challenges

Trading challenges

Trading podcasts

Unlock the secrets to trading success with a winning strategy, sharp analytical skills, and a disciplined mindset. Learn to master the markets by staying up-to-date on market trends, mastering technical analysis, and implementing effective risk management techniques. With the right knowledge and approach, you can turn your trading dreams into reality and achieve financial freedom.personal finance 101,personal finance management,personal finance tips

trading mistakes,common trading mistakes,day trading mistakes,forex trading mistakes,stocks,day trading,how to trade,trading tips,trading mistakes to avoid,forex,stock market,stock trading mistakes,stock,forex trading,investing,how to day trade,trading strategies,trader mistakes,trading strategy,trading,how to become a profitable day trader,trading for beginners,forex mistakes,penny stocks,stop loss,technical analysis,risk vs reward,high reward trades,risk reward ratio,forex trading mistakes to avoid,day trading for beginners,tim sykes,timothy sykes,trading software,trading plan,risk appetite,ig uk,ig academy,ig trading,swing trading,options trading,beginner day trading strategies,biggest trading mistakes,how to trade penny stocks,trading mistakes for beginners,day trading strategies,5 common trading mistakes

stocks to buy,stocks to buy now,stock market,how to invest in stocks,tech stocks,best stocks to buy now,best stocks to buy,stocks to watch,top stocks to buy now,best stocks,jeremy lefebvre stocks,top growth stocks,stocks 2023,investing,tesla stock,top growth stocks to buy now,stock market crash,dividend stocks,stocks 2022,stocks channel,money,stock market for beginners,stocks to buy 2023,financial education,cable news,finance stock,finance news,news station,world news,stock,market crash,tsla,how to invest,top stocks,live day trading,live stock trading,cnbc,nyse,tesla,best stocks to buy 2023,stocks to watch 2023,jeremy lefebvre stocks to buy,top stocks now,how to trade stocks,recession proof stocks,best recession stocks,top leverage stocks,best stocks to buy for a recession,buy and hold stocks,stocks at 52 week low,financial news,stocks today,stocks tomorrow,forever stocks,growth stocks,stock market today,fed,recession,fed rate hike,nio news today,tesla stock price,stock market rally,options trading live,day trading live,live options trading,nio,aapl,gme,breaking news,personal finance,stock moe,investing for beginners,top 10 stocks to buy now,jeremy lefebvre,tesla news,fed crash,jerome powell,tsla stock,live trading,live daytrading,trade ideas,bonds,stock market 2023,market,amzn,bitcoin,nvda,futures,jeremy lefebvre stock market,jeremy lefebvre makes money,yahoo finance premium,nio stock price,nio stock price prediction,tesla news today,tesla stock price prediction,jeremy lefebvre portfolio,bow tie nation,lets talk money,squawk box u.s.,trade ideas live,tesla stock analysis,how to analyze a stock,value investing,federal reserve,yahoo finance,fast money,nio stock,nio news,passive income,joseph hogue,stock trading,trading live,stock picks,paul gabrail,everything money,mo hussein,inflation,etf,amc,nasdaq,savings,markets,equities,investment,finance,btc,amd,tradertv.live,tradertvlive,meta,powell,robinhood,crypto,stock crash,sp 500,interest rates,cathie wood nio,trading options live,jerome powell live,stock market live,live stock market,how high will the market go in 2022,sp 500 2022,sp 500 2023,buy and hold strategy,arkk etf analysis,should i buy ark invest,ticker symbol you,ark invest etf,arkk stock analysis,stock market crash 2023,fed interest rates,should i buy arkk,cpi data report,squawk on the street,tesla stock collapse,elon musk news,tesla stock news,investing in tesla,elon musk tesla,elon musk twitter,tesla ceo elon musk,tesla stock crash,tesla stock 2023,52 week low,the reason we look at 52 week low's will shock you,value investing strategies,supply and demand,palantir stock analysis,pltr stock price entry point,what should you pay for palantir stock,palantir stock analysis 2023,the palantir stock analysis to define 2023,how to buy bitcoin,how to invest in real estate,best stock trading app,best trading app,dow 30,nio ark,making money,real estate,powell live,rate hikes,day trading,market today,forbes media,forbes digital,cathie wood,ark invest,recession 2022,recession 2023,arkk etf,the fed,inflation report,cpi data,cpi today,cpi expectations,electric vehicles,tesla supply,tesla valuation,elon musk,tesla 2023,auto industry,tesla crash,tesla profit,tesla growth,google stock,stock fundamentals,board elections,common stock,p/e ratio,why invest,financial sector,investment account,trading account,preferred stock,mutual funds,harry dent,palantir stock,pltr stock,robinhood app,crypto crash,best investment,bitcoin crash,dividend investing,andrei jikh,credit score,business,stocks,Investment basics,Trading strategies,Cryptocurrency trading,Stock market tips,Day trading advice,Forex trading strategies,Index fund investing,Options trading strategies,,Commodity investments,Blockchain technology

30

Well Done! The requested Your Link is Ready.

© Powered by Pixabin Official

Uncovering the Black Secrets to Trading Success: A Proven Roadmap to Financial Freedom

Develop a trading plan and stick to it: Having a clear trading plan that outlines your strategies, risk management techniques, and goals will help you stay focused and disciplined in your trading.

Use stop-loss orders: Stop-loss orders are a risk management tool that automatically exit a trade when it reaches a certain price level. This helps you limit your potential losses and protect your capital.

Diversify your portfolio: Diversifying your portfolio by investing in multiple assets and markets can help spread risk and improve overall returns.

Keep an eye on economic indicators: Economic indicators such as GDP, inflation, and unemployment rate can provide valuable insight into the health of an economy and the direction of the markets.

Continuously educate yourself: Stay up-to-date with the latest market developments and improve your understanding of the financial markets by continuously educating yourself through books, courses, and online resources.

The world of trading can be a mysterious and complicated one, full of secrets and hidden knowledge. Despite the many obstacles and challenges that traders face, there are a few key strategies and tactics that can help increase your chances of success. Here are some of the dark secrets of trading success:

Embrace risk: Trading is inherently risky, and there is no way to avoid it. The key to success is to accept that risk and learn to manage it effectively. This means setting clear stop-losses, diversifying your portfolio, and having a well-thought-out risk management strategy in place.

Do your research: Trading is not just about making quick and easy profits. It requires a deep understanding of the markets, the companies you are investing in, and the economic and political factors that can impact those markets. This means spending time researching and analyzing the markets, and staying up-to-date on the latest news and trends.

Stay disciplined: Trading can be emotionally taxing, and it can be easy to let emotions cloud your judgement. To be successful, you need to stay disciplined and stick to your trading plan, even when things get tough. This means setting clear entry and exit points, and not letting greed or fear drive your decisions.

Keep learning: The world of trading is constantly changing, and new strategies and tactics are constantly emerging. To be successful, you need to stay up-to-date with the latest developments and keep learning new skills and strategies. This means reading books, attending webinars and seminars, and working with more experienced traders.

Have a long-term mindset: Trading is not a get-rich-quick scheme, and it requires patience and persistence. To be successful, you need to have a long-term mindset and be willing to weather the ups and downs of the markets. This means having a well-diversified portfolio, and being patient with your investments.

In conclusion, while trading may seem like a mysterious and complicated world, success can be achieved through careful research, risk management, discipline, learning, and long-term mindset. Remember that every successful trader has gone through a learning process, and that it takes time to become a profitable trader. With the right mindset and approach, you can unlock the secrets to trading success.

Stock trading success

Forex trading tips

Day trading strategies

Options trading success

Trading psychology

Risk management in trading

Trading plan template

Technical analysis for trading

Trader mindset

Trading education

Stock trading for beginners

Successful trading strategies

Algorithmic trading

Trend trading techniques

Trading indicators

Candlestick patterns for trading

Swing trading success

Futures trading tips

Trading journal

Trading mentorship programs

Trading discipline

Trading risk management

Trading lifestyle

Trading communities

Trading podcasts

Stock market trading

Trading software

Online trading platforms

Trading bots

Trading signals

Trading courses

Trading blogs

Trading books

Trading webinars

Trading apps

Trading chat rooms

Trading newsletters

Trading podcasts

Trading videos

Trading podcasts

Trading seminars

Trading bootcamps

Trading simulator

Trading competitions

Trading social media

Trading communities online

Trading forums

Trading mastermind groups

Trading challenges

Trading challenges

Trading podcasts

 

13 Toxic Investments You Should Avoid

1. Subprime Mortgages

Subprime mortgages are mortgages taken out by the least credit-worthy customers, meaning they have very low credit scores. Statistically speaking, borrowers with lower credit scores are more likely to default on their loans. These mortgages do pay higher interest rates to investors, but they involve significant additional risk.

Take Our Poll: What's the First Thing You Would Do If You Won a Big Lottery Jackpot?

Simplyphotos / Getty Images/iStockphoto

Why Subprime Mortgages Are Toxic

Subprime mortgages are the poster child for toxic investments. In the 2008 financial crisis, these were the investments -- many of which ended up worthless -- that dragged down some of the biggest names in the stock market, including Lehman Brothers. Although lending regulations have tightened since 2008, subprime mortgages are still literally "subprime," meaning they are low-rated investments with a higher potential for default. With so many other investment options available, the checkered history and low standing of subprime loans make them toxic investments.

jacoblund / Getty Images/iStockphoto

2. Annuities

There are two main types of annuities: fixed and variable. With a fixed annuity, you pay a premium to an insurance company in exchange for guaranteed income payments, either for a certain period of time or for your entire life. With a variable annuity, your money is invested in mutual fund-like buckets that provide a variable rate of return that might ultimately be more or less than with a fixed annuity.

kate_sept2004 / Getty Images

Why Annuities Are Toxic

Annuities serve a useful purpose for certain select investors. But for the most part, you can use other investments to accomplish everything an annuity can without dealing with the more toxic aspects, such as high fees and high surrender charges that can cost 7% or more if you withdraw money in the first few years after purchase. Annuities also have the same restrictions as IRA accounts in that you can't withdraw money before age 59 1/2 without facing tax penalties.

Kameleon007 / Getty Images/iStockphoto

3. Penny Stocks

According to the SEC, penny stocks are usually issued by very small companies that trade for less than $5 per share. In common Wall Street parlance, however, a penny stock is one that trades for less than $1 per share. Penny stocks capture the imaginations of many investors because they are cheap and the smallest move can translate into a huge percentage gain. For example, if you buy a penny stock at 50 cents and it climbs just 10 cents per share, that's a 20% gain.

Konoplytska / Getty Images/iStockphoto

Why Penny Stocks Are Toxic

There's a reason penny stocks trade at such low prices, and it's usually because the company behind them is losing money and might be on its way to bankruptcy. Penny stocks are always a gamble because there's so much manipulation in the market. Stock promoters publish articles about how XYZ penny stock is "the next Microsoft" or "the next Apple," trying to pump the share price up so they can sell out at a profit. At best, penny stocks are a speculation, but they're also subject to market manipulation, making them toxic investments.

4. High-Yield Bonds

"High-yield" is the relatively modern term for what used to be primarily known as "junk" bonds. Junk bonds receive low ratings from credit agencies regarding their ability to pay off their debts. Since they are by definition riskier investments, they typically pay higher interest rates, thus the term "high-yield." Particularly in a low interest-rate environment, these higher-than-average yields can entice investors to take on added risk in an attempt to earn a higher return.

ewg3D / Getty Images

Why High-Yield Bonds Are Toxic

Companies with low credit ratings are just like people with low credit ratings -- they're more likely to default or go bankrupt. If you own a high-yield bond of a company that goes bankrupt, you'll likely lose your entire investment. It's hard for individual investors to get all the detailed information necessary to understand what's really going on at a company, so choosing a high-yield bond that will survive is a challenge. Buying high-yield bonds via a mutual fund is a way to lessen this risk, but it doesn't entirely eliminate it.

nd3000 / Getty Images/iStockphoto

5. Private Placements

Private placements are sales of stocks that don't trade on the public markets. To invest in a private placement, you must be an "accredited investor." According to the SEC, to qualify as an accredited investor, one must have income exceeding $200,000 -- or $300,000 together with a spouse -- in either of the two previous years, with expectation to make the same in the current year. You can also be considered an accredited investor if you have a net worth over $1 million.

South_agency / Getty Images

Why Private Placements Are Toxic

There are certain situations where private placements are legitimate investments. However, for the average investor -- who can't possibly get enough information on a private placement to determine its legitimacy -- these types of investments are toxic. Much like penny stocks, private placements are often pushed by stock promoters who fraudulently tout the upside of the stock without any information about the worst-case scenario. Private placements can also be hard to sell -- at least until after the big shots involved in the placement have already sold their positions at a profit.

RyanJLane / Getty Images

6. Traditional Savings Accounts at Major Banks

Savings accounts are secure, FDIC-insured investments that don't fluctuate in value and provide investors with regular interest payments. They can be found in nearly any bank in the country, from long-standing, traditional banks to upstart online banks. So how can they be considered toxic?

Enes Evren / Getty Images

Why Traditional Savings Accounts Are Toxic

Obviously, savings accounts are not "toxic" in the sense that they will lose all your money. However, "toxic" can be a very relative term. For starters, many of the most well-known banks in the world pay just a token interest rate. Chase and Wells Fargo are a couple of examples, with both paying investors a minuscule 0.01% on their basic savings plans. Even the national average savings rate is only 0.05%. When you factor in inflation and taxes, your savings account money isn't doing anything for you but sitting there. Keeping your money in this kind of savings account won't ever generate the kinds of returns you should be shooting for in a long-term investment account or even what you could get with a high-interest savings account.

7. The Investment Your Neighbor Just Doubled His Money On

We've all had one -- the neighbor who boasts about the hot stock he just doubled his money on. It's certainly easy to get caught up in the excitement; after all, who wouldn't want to double their money? Sometimes there's the added enticement of secrecy or an "I shouldn't be telling you this" level of intimacy that makes you feel special that you have a chance to get in on the action.

FG Trade / Getty Images

Why Your Neighbor's Stock That Doubled Is Toxic

Even if your neighbor is telling the truth about his stock gains -- and remember, humans do have a propensity to exaggerate -- buying the same stock is rarely a good idea. For starters, if a stock has already doubled in price, it may have run its course, particularly if it's a legitimate company. If it's a penny stock, as mentioned above, it might be peaking thanks to stock promoters and insiders who only want you to buy in so they can leave you holding the bag. In any case, you shouldn't be randomly buying stocks based on the performance claims of others. Only make investments you have thoroughly researched yourself and that meet your personal objectives and risk tolerance.

Martynasfoto / Getty Images/iStockphoto

8. The Lottery

Lotteries are booming in the U.S., with most states now offering at least some form of the game. Since every multimillionaire created by the lottery is splashed all over the national news, it's easy to get caught up in lottery fever, where a simple $1 or $2 ticket could change your life forever.

one line man / Shutterstock.com

Why the Lottery Is Toxic

Want to know how hard it is to hit it big in the lottery? The odds of winning the Powerball jackpot are in the neighborhood of one in 292 million. This means you're more likely to find a pearl in an oyster shell, get struck by lightning or date a supermodel than win the Powerball. It's even more likely that an asteroid hits the Earth. There's nothing wrong with occasionally playing the lottery for fun, but as an investment strategy, it's toxic. To hammer this point home, consider that you're also one million times more likely to catch the coronavirus than you are to win the lottery.

9. Promised Returns in Double Digits

You probably see ads all the time for investments that are "guaranteed to return 20% per year" or even more. Often, details are scarce about what the investment actually is. The more audacious promoters might even throw in keywords like "government-backed" or "insured." Particularly in years when your own portfolio isn't doing much, it can be enticing to check these "investments" out. Who wouldn't want to earn a guaranteed 20% per year?

jeffbergen / Getty Images/iStockphoto

Why Investments Guaranteeing Double Digit Returns Are Toxic

For starters, no investment is guaranteed to deliver that kind of return. Some are insured, and Treasury securities are backed by the federal government, but none can "guarantee" you double-digit returns. To place things in context, it helps to know that the average annual return for the S&P 500 from 1926 through 2018 was about 10% -- and even that return is far from guaranteed. Additionally, the S&P's performance has been rocky of late, sliding 20% in the first six months of 2022. Bottom line: Any investment that a friend, stock promoter, or online website tells you is "guaranteed to return 20%" is definitely toxic and possibly a scam.

10. 'The Nigerian Prince' 

You open your email one day and see a letter penned by a Nigerian prince. The prince needs help! He has millions of dollars locked away and it can only be freed if you send some of your own money. The details may vary, but essentially the promise is that if you send enough money it will be used to pay fines, fees or bribes that will allow the Nigerian prince to free up his millions and send you a huge cut.

vgajic / Getty Images

Why 'the Nigerian Prince' Is Toxic

The Nigerian Prince (or "419") was one of the original, well-publicized email scams, and by now most people have gotten wind that it's toxic. However, variations of this original scam have gotten increasingly more sophisticated. In addition to requesting money, these scams may ask for your bank account information and even impersonate you to take over your financial life. If you ever get any type of unsolicited "investment opportunity," be very wary and do your homework. Even if it seems like an investment opportunity is from a legitimate firm, consult a financial advisor to verify the sender -- and never provide your personal and financial information to an unknown source.

11. 'Fallen Angels'

A "fallen angel" is a stock or bond that has fallen from its lofty perch back down to Earth. In the bond world, it usually means a company that has had a formerly high credit rating reduced to junk status. For stocks, it can refer to any high-flying stock that is now in the dumps. These investments are often tempting for investors because it's human nature to remember former highs and think the current lows will eventually pass.

Why 'Fallen Angels' Are Toxic

Stocks that are falling sharply are also known as "falling knives" because, just like with a knife falling through the air, the odds that you catch it without getting hurt are minuscule. Many stocks that drop by 50%, for example, continue straight down until they have lost 70%, 80% or even 100% of their value. Since it's nearly impossible to catch a stock at its absolute low, it's a much safer course of action to wait to invest until a stock is back in a confirmed uptrend; only then does a stock have the potential to transform from a toxic investment to one with long-term growth potential.

12. Airline Stocks

Airline stocks include some of the most familiar names in the world, particularly for people who travel a lot. Delta, American, United, Southwest, JetBlue and others all have their own publicly traded stocks. The COVID-19 recession has all but decimated airline companies -- but even before the travel sector was crushed by the pandemic, airline stocks were potentially toxic investments.

Why Airline Stocks Are Toxic

Back in 2013, Warren Buffet famously called airlines a "death trap for investors." He soon after changed his tune and went on to become the largest shareholder in Delta, Southwest, United and American airlines. Now, it looks like Buffet is back to his previous "death trap" stance; The Berkshire Hathaway Chairman said that Berkshire sold the entirety of its equity position in the U.S. airline industry, CNBC reported.

The list of airlines that have gone bankrupt over the years (some more than once) reads like a "who's who" of the industry. The list ranges from Delta and United to Northwest, US Airways, TWA and Pan Am. This should serve as a cautionary tale that while there may be periods of strong financial results, the potential for an airline bankruptcy is always out there -- and it's more likely than ever amid the pandemic.

Tinnakorn Jorruang / Getty Images/iStockphoto

13. These 3 Canadian Cannabis Companies

The cannabis sector has emerged as a viable category on the market, but the pandemic has thrown the blossoming industry some curveballs, and Canadian companies that were hurting even before the pandemic are in an especially unstable place. Certainly not all cannabis companies in the Great White North are bad bets, but after 2020, at least three are in trouble.

 

The 5 Worst Things Investors Can Do in 2023, According to Warren Buffett

 They're something that coaches hate to see in sports. The idea also carries over into investing. Sometimes, investors' mistakes can be their undoing.

What should you especially try to avoid in the new year? Here are the five worst things investors can do in 2023, according to Warren Buffett. 

 1 . Trade too frequently 

Buffett wrote to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders in 2015 about several mistakes investors can make that cause owning stocks to be riskier than it should be. His wisdom is as applicable now as it was back then.

At the top of Buffett's list was active trading, i.e., trading too frequently. In particular, selling too soon can reduce your total returns. Remember that Buffett's favorite holding period is forever. He doesn't always hold stocks for long periods, of course, but that is his goal.

Buying too often can be problematic as well. The legendary investor would almost certainly tell you to not buy any stock in 2023 unless it's available at an attractive price compared to the low end of its earnings projections over a period of five or more years.

 2. Try to time the market 

Buffett ranks among the most successful investors of all time. But even he acknowledges that he can't accurately time the market. He doesn't try to do so. And he thinks it's a mistake for any investor to attempt it.

The Oracle of Omaha pretty much ignores market movements. He told CNBC in 2018:

I never have an opinion about the market because it wouldn't be any good, and it might interfere with the opinions we have that are good. If we're right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do... If you're right about the business, you'll end up doing fine.

 3. Don't diversify enough 

Some don't think that Buffett is a fan of diversification. After all, he once stated, "Diversification is protection against ignorance. It makes little sense if you know what you are doing." However, he included lack of diversification as one of the top five mistakes that investors make in his letter to Berkshire shareholders written in 2015.

CONSTELLATION BRANDS, INC.

The truth is that Buffett firmly believes in diversification to reduce risk. Just look at Berkshire Hathaway's portfolio. It includes close to 50 stocks from a variety of industries. Berkshire's subsidiaries also span multiple sectors.

 4. Pay too much in fees 

You've probably heard the expression, "Death by a thousand cuts." That's a pretty good description of another big mistake that Buffett warns investors about -- paying too much in fees.

It's not surprising that Buffett isn't keen on paying high fees to investment managers. The problem, as he wrote nearly eight years ago, is that most advisors "are far better at generating high fees than they are at generating high returns."

 5. Use leverage 

In a 2018 CNBC interview, Buffett said, "My partner Charlie [Berkshire Hathaway vice-chairman Charlie Munger] says there is [sic] only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is -- the first two he just added because they started with L -- it's leverage." 

Buffett thinks that investors who use borrowed money to buy stocks make a huge mistake. He firmly believes that doing so can wipe out solid returns that they could otherwise generate.

Shakespearean tragedy

All investors would probably be better off if they paid heed to Buffett's warnings. But too many make one or more of the five mistakes he identified.

Failure in investing almost always results from investors' own mistakes. As Buffett wrote in 2015, "Decades ago, Ben Graham pinpointed the blame for investment failure, using a quote from Shakespeare: 'The fault, dear Brutus, is not in our stars, but in ourselves.'"

 

*Stock Advisor returns as of January 9, 2023

 

Keith Speights has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool has a disclosure policy.

 What personal finance mistakes should everyone avoid?

 Number 1 Excessive and Frivolous Spending 

Great fortunes are often lost one dollar at a time. It may not seem like a big deal when you pick up that double-mocha cappuccino or have dinner out or order that pay-per-view movie, but every little item adds up.

Just $25 per week spent on dining out costs you $1,300 per year, which could go toward an extra credit card or auto payment or several extra payments. If you're enduring financial hardship, avoiding this mistake really matters—after all, if you're only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever.

 Number 2 Never-Ending Payments 

Ask yourself if you really need items that keep you paying every month, year after year. Things like cable television, music services, or high-end gym memberships can force you to pay unceasingly but leave you owning nothing. When money is tight, or you just want to save more, creating a leaner lifestyle can go a long way to fattening your savings and cushioning yourself from financial hardship.

 Number 3 Living on Borrowed Money 

Using credit cards to buy essentials has become somewhat commonplace. But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries, and a host of other items that are gone long before the bill is paid in full, it's not wise financial advice to do so. Credit card interest rates make the price of the charged items a great deal more expensive. In some cases, using credit can also mean you'll spend more than you earn.

 Number 4 Buying a New Car 

Millions of new cars are sold each year, although few buyers can afford to pay for them in cash. However, the inability to pay cash for a new car can also mean an inability to afford the car. After all, being able to afford the payment is not the same as being able to afford the car.

Furthermore, by borrowing money to buy a car, the consumer pays interest on a depreciating asset, which amplifies the difference between the value of the car and the price paid for it. Worse yet, many people trade in their cars every two or three years and lose money on every trade.

Sometimes a person has no choice but to take out a loan to buy a car, but how many consumers really need a large SUV? Such vehicles are expensive to buy, insure, and fuel. Unless you tow a boat or trailer or need an SUV to earn a living, it can be disadvantageous to purchase one.

If you need to buy a car and/or borrow money to do so, consider buying one that uses less gas and costs less to insure and maintain. Cars are expensive, and if you're buying more of a car than you need, you might be burning through money that could have been saved or used to pay off debt

 Number 5 Spending Too Much on Your House 

 

When it comes to buying a house, bigger is not necessarily better. Unless you have a large family, choosing a 6,000-square-foot home will only mean more expensive taxes, maintenance, and utilities. Do you really want to put such a significant, long-term dent in your monthly budget?

 Number 6 Paying Off Debt With Savings 

You may be thinking that if your debt is costing 19% and your retirement account is making 7%, swapping the retirement for the debt means you will be pocketing the difference. But it's not that simple.

In addition to losing the power of compounding, it's very hard to pay back those retirement funds, and you could be hit with hefty fees. With the right mindset, borrowing from your retirement account can be a viable option, but even the most disciplined planners have a tough time placing money aside to rebuild these accounts.

When the debt gets paid off, the urgency to pay it back usually goes away. It will be very tempting to continue spending at the same pace, which means you could go back into debt again. If you are going to pay off debt with savings, you have to live like you still have a debt to pay—to your retirement fund.

WATCH THIS VEDIO TO UNDERSTAND DEEPLY

CLICK HERE