Dangerous mindsets can get you in trouble in retirement. Learn how certain ways of thinking could be harmful to your well-being and your portfolio.
Listen to the episode...
(Click the featured times below to jump forward in the episode)
The Bass Lines:
- [00:40] – Complacency is one of the most dangerous mindsets. It’s often not what you do but what you don’t do that is harmful. When the market is doing well, it’s easy to procrastinate. However, you need to stop kicking that proverbial can down the road. The time to make changes is when you have flexibility.
- [2:49] – We’ve already discussed how complacency is one of many dangerous mindsets. It also leads to overconfidence. Don’t fall into the trap of thinking that you’re an investing guru simply because your portfolio is performing at a high level. Over the last couple of years, even a monkey could’ve built a successful portfolio. Stop thinking you can beat the market.
- [4:25] – Different folks will react to a strong market in different ways. If you’re a fatalist, you might gravitate toward thinking there’s no way the S&P 500 could continue to perform at such a high level. It doesn’t help the media wants to feed your dangerous mindsets. We’re not going to get political, but different news outlets and financial prognosticators want to use your fears to drive your behaviors. After all, news sells, right? Don’t hear me wrong; it would be foolish to think we could sustain a bull market forever. At some point history tells us it will correct. However, if you plan accordingly, you can continue to grow your wealth. Furthermore, you don’t have to park all of your money in cash.
- [8:10] – Cynicism lies at the root of many dangerous mindsets. Cynicism says, “there’s no way you’re going to beat the big banks.” It will lead you to believe the market is going to crash, and there’s nothing you can do to get ahead in your investing life. If you’re not careful, cynicism will have you stuffing your money under your mattress at night. You can stick your cash in a coffee can if you’d like, but that’s definitely not going to help you to get ahead. In fact, it probably won’t help you keep up with inflation either.
- [10:18] – Despair is the saddest of the dangerous mindsets, and we’re not trying to be cute with our humor. I can’t tell you how often I see folks who think they’ll never be able to retire because of poor planning. They think they’ll have to work forever, and that’s frustrating to see. If you put a plan in place, you won’t have to pull a Mick Jagger. Trust me, nobody wants to see you in tight leather pants at that age.
Dangerous mindsets can get you in trouble in retirement. Complacency, overconfidence, fear, cynicism, and despair have no place in your retirement life. - Mr. Stillman's Opus PodcastTweet This