Common Financial Planning Mistakes #5: Misconceptions of Wealth
In our top financial planning mistakes series, Zach Conway of Conway Wealth Group discusses how the most common misconceptions of wealth often lead to poor financial decisions.
Welcome back to our countdown of the top seven financial planning mistakes. Coming in at number five: misunderstanding wealth. We’re taught to believe that money can eliminate our biggest fears and fulfill our deepest desires. Advertising tells us that our life’s success and happiness hinges on our decision to spend on that new necklace, TV, or truck. Regardless of wealth level, spending tends to run on a sliding scale and parallel with income. That’s why we shouldn’t be so shocked to discover that, despite a raise at the start of the year, our saving’s accounts look very similar to the year before. This means that even the ultra-wealthy are just as likely to run the well dry. In fact, of the 38 million Americans living paycheck to paycheck, two-thirds are considered wealthy Americans. Meanwhile, science proves that frivolity almost never leads to true happiness. People can best create balance in their financial and personal lives by recognizing these misconceptions, resisting the temptations of overspending, and planning for their long-term goals.