Seven Ways to Stop Saying 'Oops!'
We all make foolish financial decisions. But if you want to see things get really ugly, find folks who mistakenly think they're on the right track, so they end up making the same error over and over again.
Want to avoid becoming a serial blunderer? Watch out for these seven popular misconceptions.
1. Spending is a sign of wealth.
To amass wealth, you need to save like crazy. And to save like crazy, you need to clamp down on spending.
Yet, ironically, we almost always assume that folks are rich if they spend lavishly, drive spanking new cars and take ritzy vacations. Of course, they may be rich. But they aren't as rich as they would be if they hadn't spent all that money.
The lesson: If you try to spend your way to wealth, your closets may overflow, but your bank account almost certainly won't.
2 We have plenty of time to save.
I meet lots of people who plan to save more for retirement, starting tomorrow. Today? There are a few expenses they need to get out of the way first.
These folks aren't necessarily blowing their money at the mall. Rather, they are focused on more immediate goals, like buying a home and paying for their kids' college education.
That might seem prudent. But in fact, if you put off saving for retirement until your children are through college, you have probably left it until too late. With just 10 or 15 years to save, it is all but impossible to accumulate enough for a comfortable retirement, even if you sock away 15% or 20% of your income every year.
3. Our portfolios will clock 10% a year.
According to Chicago's Ibbotson Associates, the Standard & Poor's 500-stock index has scored 10.4% a year since 1925. But if you bank on earning that sort of annual return, you won't save nearly enough. Remember, this 10.4% is the return you would have garnered over the past 78 years if you had been 100% in stocks, incurred no investment costs and paid no taxes. But very few investors are 100% in stocks and all of us incur investment costs and taxes.
Moreover, even if you ignore costs and taxes, stocks will probably notch far less than 10.4% a year in the decades ahead. Historically, a big part of the market's return has come from both rich dividend yields and rising price/earnings multiples.
But with stocks yielding less than 2% and trading at a lofty 20 times trailing 12-month reported earnings, returns will have a tough time matching the historical average.
The implication: As you struggle to accumulate enough for your financial goals, you aren't likely to get much help from the markets, so you need to save more to compensate.
4. We can beat the market.
Many people assume that successful stock investing is all about picking market-beating stocks and stock funds, so they doggedly pursue that goal year after year. In reality, however, the chances of beating the market over the long term are extraordinarily small.
Consider some numbers from Vanguard Group, the Malvern, Pa., mutual-fund outfit. Using Lipper data, Vanguard calculates that diversified U.S. stock funds returned just 12.5% a year over the past 25 years, significantly behind the S&P 500's 13.8%.
Such laggardly performance is no great surprise. Most market-beating efforts are doomed to fail because it costs so much to trade and because you pay such high expenses when investing in actively managed funds. These costs drag down returns, making it tough to earn superior results.
My advice: Forget beating the market. Instead, sit quietly with a handful of no-load mutual funds with rock-bottom annual expenses. You may not outpace the market. But you will probably amass far more than if you engage in high-cost efforts to beat the market.
5. The bigger the house, the better.
According to today's conventional wisdom, you can't go wrong with real estate. With bond yields miserably low and stocks still suspect after the long bear market, many homeowners are using their spare cash to buy bigger and bigger houses.
To be sure, homeownership is a great way to lock in your housing costs and avoid paying rent. But if you keep trading up to bigger homes in an effort to get rich, you are likely to be sorely disappointed.
Yes, you will get to live in a larger place. But more of your wealth will be tied up in your house -- and that wealth may earn a surprisingly modest rate of return. Indeed, any appreciation could be wiped out by the hefty costs of homeownership, including closing costs, property taxes, homeowner's insurance, maintenance expenses, mortgage costs and the selling broker's commission.
6. The bigger the mortgage, the better.
Like the big house, the big mortgage is often pitched as some sort of financial elixir, because you can take a tax deduction for mortgage interest.
Yet this wonderful tax break is, I regret, costing you far more than it is costing Uncle Sam. Suppose you are in the 25% federal income-tax bracket and you incur $1,000 of tax-deductible mortgage interest. True, you might save $250 in taxes. But you are still $750 poorer.
7. We are missing out.
Ever get the feeling that you are missing out? I hear that all the time from friends, neighbors, colleagues and readers. If only they had invested in a hedge fund, or purchased California real estate, or bought Microsoft at its 1986 initial public offering.
Sure, some investors strike it rich. But they are rarer than most folks imagine -- and their example is more likely to lead you astray than to make you wealthy.
After all, just because an investment has generated dazzling returns doesn't mean it will continue to shine. In fact, the sparkling past performance may have effectively borrowed gains from the future, leaving precious little for those who buy today.
投资常见的七个认识误区
两个错误的决定加在一起肯定得不出一个正确的结果。
我们都做过愚蠢的理财决定，不过如果有人错误地认为自己的行为是正确的，他们就会重复不断地犯同样的错误，直到事情变得无可救药。
想避免重复犯同样的错误吗？那么就要小心别掉入以下七个常见的认识误区。
1.花钱是有钱的表现。
为了积累财富，你需要疯狂地攒钱，为了疯狂地攒钱，你需要节制开销。
不过具有讽刺意味的是，我们常常会认为那些大手大脚地花钱、开耀眼的新车、享受豪华假期的人就是有钱人。当然，他们可能很有钱。但如果他们不像这样挥霍的话，他们会更有钱。
教训：如果你想通过花钱的方式变得有钱，你的橱柜可能会堆满了东西，不过你的银行帐户肯定就不会满了。
2.我们有大把的时间存钱。
我碰到过许多计划从明天开始为退休多存些钱的人。从今天开始？今天不行，因为还有一些地方需要花钱。
这些人不一定把钱都扔到了商场里，他们更注重眼下的一些需要，比如买房、支付孩子的大学学费等。
这看起来似乎颇为明智。不过事实上，如果等到孩子大学毕业后才开始为退休存钱，那就可能太晚了，这时只剩下10或15年的时间，根本无法为一个安逸的退休生活积累足够的存款，即便是你将每年15%或20%的收入存起来也无济于事。
3.我们的投资组合每年能有10%的回报。
据芝加哥Ibbotson Associate的数据，自1925年以来，标准普尔500指数每年涨幅都达到了10.4%。不过如果你想依赖赚取这样的投资回报，你将无法攒到足够的钱。记住，要在过去78年里获得这10.4%的投资回报，你需要将钱全部投入到股票上，并且不产生任何投资成本，不用纳税。但是，鲜有投资者会100%投资在股票上，所有的投资都会产生投资成本，都要纳税。
另外，即使是忽视成本和税金，在今后的10年里，股市的投资回报率也可能远远达不到10.4%的水平。从历史上看，股市回报的很大一部分来自于丰厚的股息收益率和本益比的不断提高。
但是，目前股息收益率不足2%，基于过去12个月的往绩本益比也达到20倍，因此股票投资回报率要达到历史平均水平将是困难重重。
结论：如果你想为理财目标积累足够的资金，股市对你的帮助可能不会很大，因此你需要存更多的钱来进行弥补。
4.我们能跑赢大市。
许多人认为，成功的股票投资就是要选对能跑赢大市的股票和股票基金，因此他们年复一年地顽固追寻这样的目标。然而在实际市场操作中，从长期看能跑赢大市的几率是相当低的。
看看共同基金公司Vanguard Group提供的一组数据吧。Vanguard利用Lipper的数据计算得出这样的结论，在过去25年里，美国各种股票基金的年回报率只有12.5%，远低于同期标准普尔500指数13.8%的涨幅。
这样的落后表现并不出人意料。多数试图跑赢大市的努力注定要以失败告终，原因是这样做的交易成本很高，并且在投资交投活跃的管理基金时，也要支付高昂的费用。这些成本拉低了投资回报，使人很难获得较高的收益。
我的建议：忘记跑赢大市这码事。静下心来投资年费用最低的免佣金共同基金。你可能无法跑赢大市，但这可能比你醉心于跑赢大市赚到更多的钱。
5.房子越大越好。
根据现在普遍的观点，投资房地产是只赚不赔的买卖。由于目前的债券收益率极低，而股市在经历了漫长的熊市后依然让人不敢靠近，许多家庭开始使用多数的资金购买更大的房子。
有一点是肯定的，买房是锁定房屋成本、省去房租的一个不错的途径。不过如果你是为了赚钱发财而购买更大的房子，其结果很可能会让你失望。
虽然你的居住空间将变得更大，但你更多的财富也被锁定在了房子上，而这些财富带给你的投资回报率可能会惊人地低。实际上，房屋的任何升值都会被买房的各种成本所抵消，包括交易费用、房产税、业主保险、房屋维护费用、抵押贷款成本以及给房屋销售经纪人的佣金。
6.抵押贷款越多越好。
和大房子一样，大额抵押贷款也常被看作是理财的万灵丹，因为抵押贷款的利息可获得税收减免。
不过遗憾的是，这种税收减免给你造成的损失恐怕要远远大于山姆大叔少装进口袋里的钱。假设你适用的联邦所得税率为25%，你要支付抵押贷款利息为1,000美元，由于抵押贷款利息可获得税收减免，你可少支付了250美元的税金，但你还是花调了750美元。
7.我们错过了投资好时机。
是否曾有过错过投资好时机的感觉？我总是听到朋友、邻居、同事和读者谈到这样的感受：如果当时投资一个对冲基金就好了，如果购置了加州的房产就好了，如果在1986年微软(Microsoft)首次公开募股时买进该股就好了，等等。
诚然，一些投资者就是这样发了大财。不过他们的人数较多数人的想像少得多。他们的事例更多地会引导你陷入迷途而不是让你致富。
一项曾经带来眩目财富的投资不一定能持续带来超水平的回报。事实上，辉煌的过去可能已经提前消耗了未来的收获，现在再去进行同样的投资可能什么也得不到了。
