January 2023 - wealthwithtess

I am not shy about sharing my big investing mistakes because I want others to learn from my mistakes.

Investing decisions made on my behalf by a certified financial planner cost me at least $80,000 in fees and a bad financial product.

I don’t want that to happen to anyone.

That money lost doesn’t include what that $80,000 would’ve grown to over the next 30 years (I don’t even want to think about how much money I left on the table.)

The most annoying part about the investing mistakes I made? Completely avoidable.

Most investing mistakes are completely avoidable with an education.

Here are the most common investing mistakes I see 30 and 40 somethings make:

1. Not Knowing How Much you Need to Retire.

Most people have no idea how much $$ they will actually need in retirement.

One rule of thumb is to have enough invested so that you can live off 4% of those investments. This is called the 4% rule.

This is a good ballpark estimate, not a perfect strategy so be sure to understand your needs on a yearly basis and plan for the worst.

2. Not Investing Because You’re Not Living Below Your Means.

If you aren’t on track to hit your retirement goals, this is when you really need to buckle down and make sure you aren’t spending money you don’t have.

Create an emergency fund with enough money to cover your non-negotiable living expenses for at least 3 to 6 months and make sure you understand how money is coming in and out of your life with a budget.

If you don’t know what your personal cash flow looks like, you’ll never be able to figure out how much you can be investing to truly grow your wealth.

3. Not Earning As Much As You Can and Should Be.

If you can make and invest more in your 30’s, your money will have more years to be invested and to benefit from compound interest.

It’s worth learning how to negotiate your salary, leveling up your skills, or starting a side hustle to make sure you are earning what you are worth during this time.

4. Investing Too Conservatively or Not At All

If you’re not investing at all, you’re running out of time to take advantage of time in the market. It’s not impossible, but it gets harder every year you wait.

If you’re investing too much in bonds or bank account savings, it’s not going to help you grow your wealth in the long run. If you have 20 or 30 years ahead of you, you might want to considering investing mostly in stock based index funds.

5. Not Talking Money With Your Partner

You need to talk about money with your person regularly, not just one time in the beginning of your relationship. If you are not on the same page financially it can impact your relationship and your finances. If you just started dating, pay attention to your partner’s money habits.

6. Trying to Time the Stock Market

No one knows what the stock market will do next.

Most of the time, major financial institutions can’t agree on what’s up and coming for the economy or the stock market.

Investing consistently over a long period of time is the best way to grow your money, knowing that it’s impossible to know what will happen next.

7. Opening a Roth IRA but Forgetting to Select Investments

Your Roth IRA is a container for your investments, not an investment in and of itself. You have to make sure you have actually selected investments (like index funds) or you are just parking your money in a glorified savings account.

This is a super sad mistake I see people make all the time. If you don’t invest your money you are missing out on compound interest. I recently I had a client who had $20,000 sitting in a Roth IRA. If that money would have been invested, it would be worth over $80,000 today, assuming the historical average return of the stock market at 10%.

Ready to Take Control of Your Finances?

If you want to take control of your finances and build real wealth, then I want to invite you to my

FREE workshop: HOW TO BUILD WEALTH THE EASY WAY (even if you’re short on time or have some debt):

You’ll learn:

2 ways to fast track your wealth
3 keys to making money in the stock market (even now)
How to build wealth with a low-maintenance investing strategy anyone can do

If you want to learn the easy way I’ve been able to build wealth, you won’t want to miss this workshop. Save your seat right here.

As we continue to experience the effects of inflation, various government and financial regulations are being altered in an attempt to combat the increasing prices that have decreased their purchasing power.

The good news for us is that these changes often aim to lower taxes and increase savings for individuals.

Here’s are a few financial things that are changing in 2023:

1. 401k Contribution Limits

The IRS is setting new, higher limits on how much employees and employers can contribute toward retirement plans. For 2023, individual employees will be able to contribute up to $22,500 to their 401(k) retirement accounts, up from $20,500 in 2022. Combined with employer contributions, employees will see a total annual limit of $66,000 in 2023, up from $61,000 in 2022.

2. IRA Contribution Limits

The maximum annual contribution to a Traditional or Roth IRA will be raised to $6,500. The catch-up contribution limit for individuals over 50, which is not subject to a yearly cost-of-living adjustment, will remain at $1,000.

3. Taxes

Due to inflation, the IRS tax brackets linked to your marginal tax rates will also be increasing by 7% in 2023.

In October, the IRS also stated that it will be raising the standard deduction for the 2023 tax year. The standard deduction for married couples filing jointly will increase by $1,800 to $27,700, while single taxpayers and married individuals filing separately will see a $900 increase to $13,850. The standard deduction for heads of households will be $20,800, a $1,400 increase from the prior year.

4. Higher interest rates on savings, CD accounts, and I-bonds

As interest rates have increased, financial products like mortgages, auto loans, and credit cards have become more expensive.

However, some banks, particularly online-only institutions, are offering higher interest rates on high-yield savings accounts and CD accounts. It’s important to note that some banks may not automatically raise the interest rate on your current savings account, and may require you to switch to a higher yielding account instead.

Find a list of top High Yield Savings Accounts for 2023 right here.

If you’re ready to take control of your finances and build real wealth and save on taxes at the same time, don’t miss my next free beginner investing workshop. Save your seat here!

7 Biggest Investing Mistakes 30 and 40 Somethings Make