Each one of us has weaknesses to accompany our strengths, and blind spots to offset our well-honed skills and abilities. Wealth creators are no different here, and in my experience the missteps often fall into two categories: Not planning, or not planning effectively
. Here is a list of the top 10 foolish mistakes that wealth creators make:
: It’s painful, it’s not a priority, it’s not exciting. It’s the “ostrich” approach (head in the sand)! “Not planning” can sound like…
1. “Why plan? It seems like I have plenty of money.”
It’s common for people to underestimate the amount of assets required to create financial independence. Overspending is a risk at all wealth strata, especially in the U.S. Lifestyle costs keep increasing over time without any restraints, and this can rapidly deplete your resource safety net. This has been especially pronounced during the financial market declines we have witnessed during the past decade. So, be aware of lifestyle costs and choices, and know what level of spending your wealth supports.
2. “I don’t have wealth management needs because I don’t have liquidity.”
This is the other side of the coin, and it is just not true, plain and simple. Yes, you need liquidity at some point to pay for lifestyle and to enjoy your life, but many of the same planning issues need to be addressed regardless of whether you have a certain level of liquid assets. Wealth creators, whether liquid or illiquid, need thoughtful wealth management.