Seven deadly sins are named in the Bible. They include pride, envy, wrath, greed, sloth, gluttony, and lust. Find out how these egregious transgressions appear in your financial plan.
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- [00:35] – Pride is the first of the seven deadly sins. In the financial world, it typically appears when people are too proud to get help. Whether you’re too proud to come in for a visit with your advisor, or you’re afraid to admit you don’t have the answers, your pride could be keeping you from achieving financial security. Don’t wait until it’s too late to get a financial plan together.
- [2:42] – Stop comparing your retirement account to your co-workers. Thou shalt not covet thy neighbor’s portfolio, remember? After all, you don’t know your friend’s financial situation. His or her financial needs could be completely than your own.
- [4:17] – Wrath comes in at number three on our list of the seven deadly sins. Please don’t make financial decisions out of anger. Your explosive reactions tend to hurt yourself more than anyone else. You’re going to get some raw deals from time to time. Don’t make your situation worse by acting out.
- [5:56] – It’s unclear exactly what a green-eyed monster is, but regardless, it will drive you to madness. Greed is especially a problem when the market is doing well. Everyone wants to profit from a bull market. However, nobody wants the accompanying risk. This is greed at play. Abandoning your long-term strategy to try to take advantage of short-term gains is dangerous. Remember, the market moves in cycles. Trying to change your plan when it’s at the top is greed in action.
- [7:31] – Sloth is another of the seven deadly sins. No, we’re not talking about the animal. Being slothful refers to laziness. It typically manifests itself in the form of procrastination. It’s so easy to kick the financial can down the road, putting off important decisions for another day. Don’t beat yourself up; we’re all slothful at times. We get it. Financial planning is intimidating. However, it’s easier to take action now than it is to mitigate your financial problems later.
- [8:59] – When you were a kid, did your mama ever tell you to quit being a pig at the dinner table? This is gluttony, and it can rear its ugly head in your financial plan. Gluttony arises when your portfolio is overweighted in certain stocks or industries. This is what happened during the Dot-com bubble. Folks were gluttonous over technology and telecom stocks. When those sectors crashed, people lost a lot of money, even though other sectors of the market were fine. Had you maintained a well-diversified portfolio, you might have made money rather than tanking your retirement accounts. Remember, you don’t get to binge on a particular investment simply because that stock or industry is performing well. Rather, it’s important to stay diversified in your investments. Don’t expose yourself to unnecessary amounts of risk.
- [10:15] – Lust led to a myriad of problems for King David. He put his lineage and his throne at risk simply because he wasn’t satisfied with what the Lord had given him. In your financial life, you have to ask yourself whether you’re lusting after big returns. Putting your wealth at risk simply because you’re hoping for a vacation home or a little bit of added security in retirement is folly. If you’re retiring in the next few years, dial back your risk. Be thankful for what you’ve accumulated, and protect your wealth.
The seven deadly sins are pride, envy, wrath, greed, sloth, gluttony, and lust. If they're a part of your retirement plan, run away. Don't let your financial transgressions get in the way of your retirement. - Mr. Stillman's Opus PodcastTweet This