Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Barriers on the Road to Wealth Building

Personal_Finance / Money Saving Oct 06, 2009 - 11:05 AM GMT

By: Nilus_Mattive


Best Financial Markets Analysis ArticleHave you ever been driving on the road when traffic suddenly comes to a halt? You sit there wondering what the heck is going on up ahead for ten or fifteen minutes. Then, suddenly, things start moving again and you realize that the hold-up was caused by merging traffic and a couple of yahoos who decided to wait until the last possible second to move over into the proper lane.

Why do people consistently do things like this? Why do they wait until the last possible moment to move over, even when there were ten signs warning them to do so for the last five miles?

I lump them into two categories:

The first group wants to eke out every last possible foot before they merge, thinking they’re going to time it perfectly. Never mind that it rarely happens and they end up sitting in gridlock with everyone else. It’s not about the end result — it’s about the thrill of going for an extra advantage.

The second — and larger — group is simply not paying attention. Maybe they’re talking on their phones, shaving, or eating burgers. Whatever the reason, they don’t even see the signs in the first place. They’re blindly following the car ahead of them.

None of this is news to you, I’m sure. If you’ve driven on a U.S. highway, you’ve seen these people in action over and over again. But I bring it up today because these very same psychological mistakes can prevent us from successfully building wealth.

Let’s Start with the Proverbial Portfolio Lane Changers …

There’s nothing wrong with trying to actively manage your portfolio. In fact, I think you’re right to stay on top of your finances day in and day out.

However, I don’t think you’re going to get ahead by shifting out of an investment every time it slows down a little bit.

Not only will commissions — and possibly taxes — put a serious drag on your performance, but you face very stiff odds of regularly outperforming, too.

There's an important difference between taking charge of your  finances and making too many micro adjustments.
There’s an important difference between taking charge of your finances and making too many micro adjustments.

As a real world example, I’d point to my portfolio in Dividend Superstars. Some of our positions were initiated in the summer and fall of 2007 … right as the market was beginning to crack. And during the March lows, they had fallen substantially (though a lot less than the broad market).

However, their fundamental businesses hadn’t changed. The dividend income was still flowing. There was no reason to abandon ship, in my opinion … so I told my subscribers to continue holding.

Today, the shares have recovered quite nicely. And once you factor in the dividend income, they have really outperformed their benchmarks.

Had we jumped in and out, we would have run the risk of getting whipsawed over and over again.

So my message is this: If you’re already paying attention to the market “signs,” and adjusting accordingly … great! Just don’t overdo it. Major shifts should be undertaken only after much consideration.

Meanwhile, Inertia Can Be Even More Damaging To Your Ability to Consistently Build Wealth!

I was recently at the Salvation Army to donate some items. As you’d expect, I asked for a donation form so I could write off these donations on my tax return.

That’s a logical thing to do, right? I mean, who wouldn’t take the two minutes to fill out a simple piece of paper for the chance to keep some more of their hard-earned dollars away from Uncle Sam!

Well, the answer is “a lot of people,” apparently.

I say that because as I was filling out my form, another guy next to me grabbed a form and asked me some basic questions about how it worked.

I explained that it was pretty simple. You just wrote down what you were donating and took your copy home with you. An accompanying piece of paper would tell you how much your items were realistically worth for deduction purposes.

He started to write down a word or two … then said something like, “Who am I kidding? This isn’t worth it!” He crumpled up the paper and walked away. And he wasn’t alone. I saw plenty of folks who just dropped stuff off and left.

Sometimes filling out a  simple form can yield big financial rewards!
Sometimes filling out a simple form can yield big financial rewards!

Look, if you’re just giving a couple t-shirts, I understand — it’s not worth the hassle. But I’m talking about people who were giving chairs, tables, and many other big items.

My point is this: Nearly everyone knows that donating to a charity is tax deductible. Yet not everyone will take even one very easy step to ensure that they reap the financial benefit of doing so.

Yet if you want to build and maintain wealth you have to not only think about money matters on a regular basis, but also have the discipline to follow through on your plans!

Consider retirement planning, one of my favorite subjects …

It’s no secret that contributing to a 401(k) plan makes sense for most workers. There are upfront tax advantages. Many companies toss in “free” money in the form of matched contributions. And it’s pretty clear that the traditional retirement anchors such as pensions and Social Security aren’t necessarily going to be there the way they were in prior years.

Yet according to mutual fund behemoth Vanguard, only 60 percent of workers eligible for 401(k) plans chose to participate in 2008.

Sure, you could argue that the other 40 percent had a better use for their money. Or that the recession crunched their finances to the point where contributions weren’t possible.

BUT, Vanguard also found that 84 percent of workers in 401(k) plans with AUTOMATIC enrollment participated.

That 24-percentage-point difference tells me that, for a lot of workers, the sheer “hassle” of filling out a simple form is too much of a burden. They’d rather miss out on all the great advantages of participation than do a couple minutes worth of work. It has nothing to do with their financial situations at all.

Want Prosperity? Just Follow the Rules of the Road!

Since you read Money and Markets, I know you’re already pretty serious about building — and maintaining — your wealth. You’re already very disciplined. And I’m positive that you know a heck of a lot more about financial matters than most other investors out there.

But I also know that we all change lanes a little too frequently, or fail to heed warnings along the road from time to time. So it’s nice to get a gentle reminder that little steps DO pay off down the line. And that it is indeed possible to obsess over your portfolio a little too much.

Remember, all the knowledge in the world doesn’t mean a thing if you don’t use it properly.

So continue to do what you’re doing, and always keep an eye on places in your financial life that you could improve. Here are just four areas off the top of my head:

Taxes: Whether it’s taking the time to fill out a donation form, or enrolling in a tax-sheltered retirement plan, there are plenty of ways to lower your tax bill.

Asset allocation: Periodically revisit your portfolio and make sure you’re happy with how much money you’ve got invested in stocks, bonds, commodities and so on. The percentages should jibe with your age, your risk tolerance, and your overall opinion of where the world economy is heading.

Specific investments: Don’t stick with winners or losers just because. Make sure their stories are still sound … and their purpose in your overall portfolio is still valid.

Your budget: I’ve discussed this in detail before, but it really pays to keep track of what you’re making AND what you’re spending. I think you’ll find that there’s always another way to put a little extra money away for a rainy day. And as many Americans are now discovering, getting thriftier can actually be enjoyable!

Heck, at least think about these things the next time you’re stuck in traffic. Because we all have the tools and potential to build wealth consistently. It just takes a little planning and a lot of patience.

Best wishes,


This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules