Building money gradually and consistently is the goal of effective financial planning. Setting precise goals, saving regularly, investing those resources, and safeguarding your assets are all part of it. However, there are certain alarmingly usual financial planning errors that can prevent you from doing anything beneficial with your money.

1. 6 Common Financial Mistakes that We
Commonly Make!
Blog / By Imperial Money / May 11, 2022
6 Common Financial Mistakes:
Building money gradually and consistently is the goal of effective financial
planning. Setting precise goals, saving regularly, investing those resources,
and safeguarding your assets are all part of it. However, there are
certain alarmingly usual financial planning errors that can prevent you from
doing anything beneficial with your money.
Following are some common financial mistakes –
1. Money Lying idle in bank’s saving account

2. This comes on top of common financial mistakes For most people, money is
best saved in a savings account. The interest earned on your savings could
be used to save and multiply your wealth over time.
But the rate of inflation will erode the real value of your money if you have it
stashed away. So if your goal is to become wealthy, invest to beat inflation!
Is there really a difference between Saving and Investing?
The majority of us believe that saving and investing are the same. While many
people use the terms equally, they are as dissimilar as chalk and cheese.
Your “savings” are the difference between your monthly income and your
monthly expenses.
By “investing“ your money in various asset classes such as stocks, bonds,
real estate, or gold, you can grow your savings and create more wealth.
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2. Not giving your investments time to grow
Time is crucial when it comes to investing. To optimize your earnings, you
should hold investments for as long as possible. There is a quote “You invest
with the expectation of fair returns over a lengthy period of time,”

3. Investors pulling out of an investment because they did not double their
money in a set amount of time, usually days or weeks, is a common mistake
Williams sees.
“You probably don’t have proper savings if you need your money to increase
urgently,” she explains. “Quick growth is fraught with danger.”
3. Ignoring inflation
When it comes to financial planning, the majority of people overlook the time
value of money, or how money devalued over time.
While taking into account a rise in income over time, it’s also important to
factor in increased expenses and a decrease in the worth of money due to the
annual overall increase in prices of popular products and services.
Over there on “safe” investments like savings accounts, bank FDs, and
government bonds will result in your portfolio returning less than the rate of
inflation.
If you neglect inflation, your funds may continue to erode as your financial
strategy goes crazy.
4. Investing Cash You Can’t Afford to Lose
Studies demonstrate that putting money into the market in large amounts
rather than small amounts yields a higher total return, but this doesn’t mean
you should invest your whole savings account at once.
Whether you’re a buy-and-hold investor or a trader, investing is a long-term
business, and remaining in business necessitates keeping cash on hand for
both crises and opportunities.
If you only have enough cash to invest or an emergency cash reserve, you
are not in a financial position where investing makes sense. Due to behavioral
biases, this type of investing leads to blunders.

4. 5. Starting retirement planning too late in life
When you invest in financial instruments such as Mutual Funds, Stocks, RDs
(Recurring Deposits), and FDs (Fixed Deposits) over a lengthy period of time,
you will receive bigger returns.
You can get a better yield and financial security if you start them in your early
20s or 30s and keep them for a long time.
However, if you wait too long to invest in them, your return will be significantly
lower, and you will have to wait even longer to realize the rewards of your
investment.

5. If you want to invest 5k per month for 15 years and delay it for 6 months, so it
will cause you loss of 1,75,480/-
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Chasing News
Investing on news is a horrible move for first-time investors, whether it’s trying
to predict what will be the next “Apple,” investing hastily in a “hot” stock tip, or
going all-in on a rumor of earth-shaking profits.

6. Professional firms compete with investors in that they not only obtain
information as soon as it becomes accessible, but also know how to correctly
analyze and act on it.
Rather than believing hearsay, the best first investments are in companies
you know and have dealt with personally.
You wouldn’t keep betting on black to make long-term profits in a casino, and
you shouldn’t do the same in investing.
These are some of the common financial mistakes you can face while starting
your financial journey or in between your financial journey.
To avoid these common financial mistakes try consulting a financial advisor
near you or call us on +91- 9595889988
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