Here are some of most common:
- Avoidance/Procrastination: “Failure to Launch” - Many people don’t know where to begin and thus never get off home plate. There is no sense of urgency to get their affairs in order and live reactively vs. intentionally and take charge of their financial lives.
- Lack of Well-Defined Goals: The old adage, “if you aim at nothing, you’re sure to hit it” applies here. Without clarity on goals, there is no plan to make them happen. There is the “wing it and hope it all works out” mentality so when it’s too late to really plan, there may be regrets.
- Unawareness/Apathy: Not knowing what you don’t know or not caring enough to get good information is a common roadblock to financial health. Unless you have expert knowledge of all the intricate details of investments, taxes, insurance, estate planning, for example and how they all relate in your situation, making uninformed decisions will have adverse consequences.
- Arrogance: There are those who can’t benefit from sound financial advice because they assume they have all the knowledge needed to make good decisions themselves. They might have a friend or family member they trust to advise them but that’s the extent of their research base. Or, not willing to listen to sound advice, they make decisions on emotion versus objective information and charge ahead regardless of the consequences.
- Bad Counsel or Incompetent Advice: Many times, investors might be getting mediocre advice at best but are comfortable with a long-term advisor relationship and the effort of changing is too much. They know they’re not getting the best service or results but hope things will change. The definition of insanity is doing the same thing over and over and expecting a different result.