Money Lessons You Don't Need To Follow
What used to be bedrock advice for your parents' generation might not be the best strategy in the 21st century. Here's how to keep pace with the brave new post–piggy bank world.
Old Lesson You Should Follow: Be an Investor, Not a Collector
With all the personal finance advice we have at our fingertips (and on our screens), some of us tend to get excited about hot new stocks and over-diversify, collecting lots of investments that duplicate one another. But that can be detrimental to your financial future, says Carl Richards, a certified financial planner
, on his site BehaviorGap.com
. The problem is, as he writes, "there's no cohesive investing strategy at work... This over-diversification can lead to inefficiencies, including unnecessary taxes, internal expenses, transaction costs and, maybe most importantly, the impact on your life in the form of the time you have to spend thinking about all those lines on your monthly statement." So while it feels very modern and high-tech to dive into a bunch of individual funds (and manage them from your phone), here might be one place where an old-fashioned approach—a few well-chosen funds, overseen by a financial planner—can serve you well.
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Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.