The Top 5 Money Mistakes Costing You Thousands (Number 4 Will Surprise You)
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Weekly Market Update 🗒️💡
All of the major indices finished this past week in the red, with the Dow snapping a 4-week win streak and falling 0.23%. The Nasdaq, our tech-heavy friend, saw the biggest decline of 0.42% while the S&P 500 barely budged and finished the week down just 0.1%.
There continues to be a tug-of-war in the market and tons of uncertainty. Company profits are holding up better than expected but there is still a case for both the bulls and the bears.
My take: keep cash on the sidelines in a High Interest Savings Account just in case the market starts to drop again.
Earnings
Procter & Gamble released earnings this past week and gained 3.5% after posting and EPS of $1.37 vs. $1.32 expected.
On average, companies beat expectations this week however total profits didn’t boost stocks as they normally would because investors are still fearing the possibility of earnings dropping with a future recession lingering.
A big week up ahead. Amazon, Alphabet, Meta, and Microsoft are all reporting earnings.
Stay tuned…
I will be doing a deep dive into the earnings of one of these companies.
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Tweet of the Week
The Top 5 Money Mistakes
Money is great, but there are so many ways to lose it. Over the years I’ve realized something extremely important:
It’s not about how much you make, but how much you can keep.
You can make $150,000 per year but if you spend $150,000 then you’ll live in a constant cycle of paycheck to paycheck.
In today’s Profit Zone, we’re going to be covering the top 5 money mistakes, and I’m sure there are a couple you’ve made along the way.
The good part is that once you’re aware of them, you’ll never make the same mistake twice.
If you can refrain from making these 5 mistakes, you’ll retire with a lot more money then you thought possible.
Let’s dive into it.
Mistake 1 - Not making money in your free time
“But I don’t have any free time”
Yes you do. And you should be using that free time to start a side hustle. And no, I’m not saying that every single minute you spend outside your 9-5 (if you have one) should be on building a side hustle.
Balance is needed. You can still watch Netflix, just don’t watch as much. You can still play video games, just don’t play as much. You can still go out and hang with friends, just find a way to fit in some work before or after.
Side hustles come in many shapes and sizes. You could blog, resell products online, start a car wash, help older people figure out technology, teach English online, tutor kids in math, become an affiliate marketer and so much more.
There are endless opportunities out there for you to make some extra money. What would an extra $500/month do for you? Or an extra $1,000/month?
And it’s not even about the money, having a side hustle is a great way to look better in front of a potential employer. It shows discipline, commitment, motivation and looks great on a resume.
The benefits are endless. Start building something in your free time.
Mistake 2 - Not negotiating your salary
Negotiating your salary when starting a new job could amount to thousands of extra dollars in your pocket in retirement.
Unfortunately many people don’t negotiate their salaries because they don’t want to appear greedy. Sad.
Negotiating may set the tone of your relationship with your employer who will now identify you as someone who isn’t afraid to ask for what they want.
You can use your past salary as leverage, as well as your work experience and any strong qualities you might bring to the table.
You can also use salary comparison tools on websites like Monster or Glassdoor before meeting with your employer so you know what you can ask for.
When negotiating, always go in with a number that is higher than what you would actually settle for. Chances are your employer will turn down your first bid, so falling back on a number you’d already accept is beneficial for you.
Let’s say you want $50,000, you could go in at $55,000 and negotiate down to $50,000. If you’re lucky, you might even get the higher number accepted on the first try.
Mistake 3 - Not having an emergency fund
Emergency funds are a must, especially if you have dependents (kids, wife, elderly parents).
Emergency funds are there so you don’t have to pull from your investments in times of emergency. Imagine owning a stock that has been performing very well and is expected to continue performing and all of a sudden you have to sell it to pay for an emergency. That’s a big no-no.
Let your winners ride by making sure you have money put aside.
Emergency funds are typically 3-6 months of expenses tucked away in a high-interest saving account or a redeemable GIC, with emphasis on the redeemable. You don’t want that money locked up. It needs to be liquid and available to you at a moment’s notice.
For example:
Let’s say you spend $3,000/month on rent, food, transportation, and any other necessities you may need. That would mean you need anywhere from $9,000 - $18,000 put aside just in case.
Your emergency fund should also be set up BEFORE you start investing. If the market were to crash tomorrow, you don’t want all of your eggs in one basket. Make sure you have some extra cash laying around to help bail you out of sticky situations.