Let this be the year you challenge the fear of changing the way you manage your money.
"I cringe every time investors tell me they recognize their current approach is not appropriate - but they are not yet ready to switch," said Pat McKeough, publisher of The Successful Investor and similar advisories.
Typically you have some losers - mutual funds, stocks, real estate, perhaps a business venture. Yet you are reluctant to sell, to turn paper losses into red ink. You hope things will turn around; after all, you chose the investment hoping you would make money.
Selling would confirm you made a bad choice.
Or an investment has been doing really well - perhaps to the point at which it makes up a disproportionately large part of your portfolio. But it's hard to sell when you are on a winning streak, to quit while you are ahead: you keep hoping for more.
Maybe your attitude to saving and/or debt reduction falls short of what you know you should be doing. But you just can't seem to break loose from familiar habits.
Well, you aren't alone.
An Edward Jones survey showed 82 per cent of Canadians younger than 44 would change the financial decisions they had made if they could go back in time. Even 61 per cent of those 65 and older felt the same way.
What would people do differently?
- Save more for longterm goals.
- Pay off debt faster.
- Build an emergency fund.
Decide now 2014 will be the year to get rid of those risky or otherwise unsuitable investments, and to review your winners. Change your approach to saving and debt. Ask for help if you just can't do it on your own.
You don't have to make a 180-degree turn. Start with baby steps: they will lead your finances to a "no regrets" future.
Mike Grenby is a columnist and independent personal financial advisor; he'll answer questions in this column as space allows but cannot reply personally. Email [email protected]
