“Save more, spend less, and don’t do anything stupid.” According to the late Dick Wagner, CFP, this sentence summed up financial planning. Simplistic? Certainly. But it also contains a great deal of truth.

A. Save more. Accumulating wealth depends on your ability to save and invest money. The old axiom of letting your money make money relies heavily on putting away some initial seed money and leaving it to grow.

B. Spend less. To have money to invest, you need to live on less than your total income. A majority of Americans find this incredibly difficult. We are famous for living hand to mouth. Over 7 out of every 10 of us would have to sell something or borrow to come up with $1,000.

A strong recent example is the enormous disruption and hardship the government shutdown caused 800,000 federal workers. When they missed two paychecks, many had to take out short-term loans, file for food stamps, or secure second jobs to get by. Obviously most didn’t even have even a rudimentary emergency reserve.

So it’s reasonable to contend that 70% of Americans have grave problems accomplishing “save more and spend less.” The 30% who can do those two things still face the next hurdle.

C. Don’t do anything stupid. While “saving more” and “spending less” are measurable and quantifiable, “not doing anything stupid” is highly subjective. Here are a few behaviors that might qualify.

1. Not having an emergency fund. An emergency reserve is primarily to support you and your dependents if you lose your job. It is not to be used for ordinary periodic expenses like car repairs, insurance deductibles, or income taxes.

2. Not understanding that retirement is not optional and it’s the most expensive of all financial goals.

3. Not maximizing your retirement plan contributions. Anyone can open an IRA that lets you invest up to $6,000 annually. Many employers offer 401(k) or 403(b) plans where you can invest up to $19,000 a year, plus receive an additional employer contribution of 3% or more of your salary. Those who are self-employed can invest up to $59,000 a year and more. All traditional retirement plan contributions are tax deductible, which makes them even better investments.

4. Measuring your time horizon in years rather than decades. Taking a short-term view of the market by getting out when the stock market takes a dive is the number-one fatal investing mistake.

5. Not understanding the difference between saving—putting money away for short-term future needs—and investing—putting money into stocks, bonds, and other asset classes to build wealth over the long term.

6. Not diversifying your investments. “Don’t put all your eggs in one basket” is still good advice. You need five or more asset classes in your portfolio. Take the time to Google “asset classes” and learn all you can.

7. Thinking you can beat the market. According to Dalbar, Inc., 97% of all investors, advisors, and mutual fund managers don’t beat the market over the long term. Neither will you.

8. Paying attention to salespersons’ promises instead of the fees, expenses, and taxes on their investment products. Too many people who save successfully end up throwing their hard-earned dollars away by investing in high fee and commission products like annuities and cash value, whole life, or permanent life insurance policies. These are rarely good investments.

9. Worrying about dying early in retirement rather than living longer than you imagine.

Finally, perhaps the ultimate “something stupid” is failing to use your accumulated nest egg to take care of yourself and support your heart’s desires. Building financial security is not a goal, but a tool for living a rich, full life.

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