Are You Your Own Financial Best Friend or Worst Enemy?

23 June 2019

How good have you been to yourself lately? Are you your financial best friend? What pain are you causing yourself in the future, by not making the best financial decisions? We all want financial rewards; however, subconsciously many times we sabotage ourselves, with poor financial habits. This quiz will help you identify the areas/habits that are keeping you from reaping your financial rewards and achieving your goals.

Identify all the statements below that relate to you.
PROCRASTINATING
a. When I see a great deal on items, investments etc., the deal normally ends before I get through “thinking” about it.

b.   If my financial institution shares a great investment opportunity with me, it usually either passes me, or I wait until the last minute.
Potential Future Pains/ Disadvantages
•   You miss great deals or pay a higher price because of “no decision” or late decisions.
•   You earn less than other investors because you missed the great deals.

BEING ULTRA CONSERVATIVE
a. I do not want to lose any of my money, therefore most of my money is in a savings/chequing account.

b. I will demand a higher interest rate BUT I WILL NOT transfer my money to an investment that promises a higher rate.

Potential Future Pains/ Disadvantages:
• Inflation will erode your wealth as the rates offered on savings/chequing account is not sufficient to help you to increase your wealth.
• You will miss out on good business and/or investment opportunities that could provide you with better returns and make you richer.

TAKING TOO MUCH RISK
a.   When I am investing, I go for high risk and I am optimistic that it will all work out.
b.   I do not keep my emergency funds in a savings account because the returns will be low, and I am all about maximum returns.
c.   I have Plan “A,” but seldom do I have other investment options.
Potential Future Pains/ Disadvantages:
•   You are making more “losses” than your “gains” can compensate, because you have too many high risk investments.
•   In the case of an emergency, you will need to sell your investments, even at a loss, and/or borrow when an emergency occurs.
•   You panic when “Plan A” does not work, since your portfolio is not diversified and this may force you into another risky investment move.

IMMEDIATE GRATIFICATION
a. Rather than save towards a financial goal, I typically take a loan so that I can buy what I want now.
b. If there are two investments and one promises a lower return, in a few months, while another is expected to give higher returns, over the long-term; I typically take the lower return, so I can get money now.

c. I know I have long-term goals, such as buying my home, but typically I spend on short-term pleasures.

Potential Future Pains/ Disadvantages:
•   You are paying far more for the same items because you borrowed the money and must repay with interest.
•   You are foregoing the higher returns that you could have made on your investments in the future, without reinvesting the immediate gains. This makes you poorer in the future.
•   This jeopardizes your ability to afford your long-term goals, because you are distracted by guilty pleasures.

Do you want to stop self-sabotaging and be your own financial best friend? Take the first step and do something good for yourself today. Schedule a free one-on-one financial partnership conversation today with JMMB at https://jm.jmmb.com/schedule-appointment or give us a call at (876) 998-5662.

Written by Michelle Sinclair-Doyley, manager, client financial education, JMMB