Money Mistakes

According to, money is one of the top reasons couples cite when filing for divorce. Money and investments are emotionally tense – after all, although money can’t buy happiness, it does make the world go around and give you choices. With the recent stock market volatility, and all the emotion’s volatility evokes, I thought it might be time to confess that even professionals experience moments of uncertainty. Below are a few times I had to rely on my training to overcome my emotional bias towards making some common financial mistakes.

1) Making asset allocation decisions based on current market conditions. Although my children might argue otherwise (my youngest has drawn pictures of me, thoughtfully including my many forehead wrinkles!), my wife and I are relatively young. We won’t be tapping into our retirement accounts for at least another 25 years. With such a long investment time horizon, we should be invested entirely in equities. And yet, as the market continued to climb to new heights, I started to question if perhaps we should “take some gains off the table.” This is not uncommon – behavioral finance researchers have found that the emotional pain of losing $1 is far greater than the joy derived from gaining $1 – so we are wired to try to protect our gains. Although it would be painful to see the value of our investments halved (as happened from the peak in November 2007 to the bottom in March 2009), because we don’t need to tap those assets for at least 25 years, we chose to maintain our current asset allocation strategy, and will modestly reduce our exposure to equities as we get closer to retirement.

2) Negatively arbitraging our assets. For clients who are still working, we recommend keeping roughly 3-6 months’ worth of expenses liquid – in a savings account, or money market fund – to be tapped for emergencies. Funds above and beyond that amount can be invested (example: real estate) or used to pay down debt. And yet, I took great comfort in seeing our savings account balances grow beyond our emergency fund, even though we were only earning 1.5% on our savings. Having a large cash balance provided me with comfort but didn’t make sense. We decided to put the additional funds toward buying more real estate.

3) Being underinsured. I will never forget the absolute terror I felt when I was out of state meeting with other business leaders, and my phone rang, with Grand Strand Medical Center coming up on the caller ID. Worst case scenarios flashed through my mind; I was terrified I was a widower with two boys at 41. Now, my wife was fine, and I will not bore you with the details. Yet, even though we were at that time eligible to apply for life insurance coverage, we just…didn’t. We knew it was important to be insured in the same nebulous way we knew we should eat less sugar, but never felt compelled to action. Not until I sat in a client meeting and seen that the clients were underinsured. The young, beautiful wife laughed, and said they would be getting a quote for insurance the next day, because if anything happened to her husband, she didn’t want to be looking for her next husband at her first husband’s funeral. I left work that day, and by the next morning my wife and I had both applied for life insurance.


It’s easy to be emotional, or complacent about money – I’ve been there. In working with our clients, we try to point out places where improvements could be made, while managing the complex emotions and attachments we have to our money and investments.

Still interested in understanding more when it comes to making money mistakes? If so, contact our firm at 843-999-1570 and someone will be able to explain more in depth of what you need to know when it comes to making money mistakes and learning from our experiences! With that said, “We have great challenges & great opportunities, and with our help we’ll meet them together!” – Jason Pries

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