Capital Investment Advisors

Wes Moss Featured on BottomLineInc: Financial Advisers Reveal the Worst Mistakes Their Clients Made

What were you thinking?! If you’ve ever kicked yourself for making a big mistake in saving, spending or investing your money, take heart. Financial ­advisers have seen much worse. What really matters, they say, is understanding how you could have avoided the goof and how you can do better in the future.

Bottom Line Personal asked five of the country’s top financial advisers to reveal the most memorable blunders that their clients made—often ­disregarding the adviser’s advice. Here are the takeaway lessons for consumers and investors…

Home renovation that tore apart a financial plan. For many years, a couple dreamed of redoing their kitchen, a $100,000 project. But they kept postponing it until they retired. At that point, they weren’t content to just redo the kitchen. They gutted the downstairs bathroom and wound up renovating most of the first floor. The final bill came to more than $450,000. The out-of-control expense forced them to drain much of the money in their taxable accounts and then start drawing on the investments in their tax-advantaged retirement accounts, selling many of the investments years earlier than the couple had planned.

Lesson: Be careful about splurging when you first retire. It’s tempting because you’re probably the wealthiest you have ever been and you’ve earned the right to reward yourself. But your savings may have to last 30 or 40 years with only limited income to replenish it. I always recommend that clients do a big renovation as soon as they can ­afford it during their working years rather than wait until retirement. That way, they get more time to enjoy the results, and if the project goes way over budget, they still are earning a salary that can cushion the blow.

Wes Moss, CFP, is chief investment strategist at Capital Investment Advisors, which manages more than $2 billion in client ­assets, Atlanta. He is author of You Can Retire Sooner Than You Think: The 5 Money Secrets of the Happiest

Read the full article here.
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