8 Financial Decisions That You Will Regret In 10 Years!

everyone so in this video we're taking a look at eight different financial decisions that you may regret at some point in your life and this isn't to say that you will certainly regret all of these in the future but it's something that you want to take into consideration when making decisions in the future so let's just get started with this video let's not beat around the bush here and let's talk about the first one which is buying a too much house so this is some steak that many people can sort of run upon and there's some reasons for this one of them being that if you are buying a house where so you have three people in your family and you buy a five bedroom house well that might seem pretty nice you have a large house and you have more room to spread out and if you look at the average size of homes in America over the past 50 years you'll see that they've been increasing quite a bit but with that comes the increasing cost of actually owning and operating that house that you have so all 50 states have property taxes so it doesn't matter if you live in Alaska Hawaii or New Jersey you know that there are property taxes and especially if you live in New Jersey you might be paying three four five six thousand dollars per year in property taxes on a home that might be three hundred thousand dollars the average sized home might be paying five thousand dollars in property taxes in specific states so just because you own that home doesn't mean that there are no costs associated with it that's one of the biggest mistakes that people are making when they think if they get a mortgage and they can own that home after 30 years of paying that mortgage and it's smooth sailing into retirement they don't feel worried about housing costs that's just not the truth they have to pay to heat that home to cool that home a new roof on that home so the bigger that house the more expensive it's going to be in general so try not to get too much house just when you're buying your next house consider getting something that fits you comfortably but not six bedrooms for two people it just doesn't make very much sense and it's going to really eat away at your wallet and potentially make you a house poor a lot of people are what we call a house poor where they are paying too much for their mortgage and for owning their home out of their paycheck than what they should be so a good rule of thumb to go by and I'm not a financial advisor this is all just free information that you can use but a good number to go by is to try to keep your mortgage payments below about 30% of your gross annual income or your gross income for that specific period of payment okay so maybe about 30% 25% keep it below that obviously the lower the better but if you start to see your mortgage payments creeping up to about 40% of your income 50% of your income that could be a very strong sign that you're paying too much for this home and maybe you should afford a smaller home something that is not as expensive so that's the first one there that you want to consider the next one is seems quite obvious but many people still disregard this and this is by essentially tapping into your retirement funds to use that money for something else you might want to use at the moment so tapping any retirement funds can be absolutely detrimental to your ability to retire in the future so this is something that you really need to take into consideration because at the time you might think you know what it's not gonna hurt if I borrow some money against my 401k maybe I withdraw some of the principle from my IRA accounts so that I can buy a car or maybe I want to use that for a down payment on a house but you really want to strongly consider not doing this in a lot of situations there's a couple reasons for it one of them being let's say that you withdraw some money from your retirement accounts so that you can buy a car well you're withdrawing money from something that is appreciating in value so that you can buy a car that depreciates in value it's like a double whammy you're really hurting yourself there in most cases now it's still understandable if you do have to borrow against your retirement funds in cases of emergencies for example maybe if some medical bills something very very important but for the most part it's something that you want to touch the last you don't want to really touch your retirement funds and trust me in 10 years you will likely regret taking money out of that account so you could buy something now instead of waiting for it to grow even more for retirement so that's something you that you really want to heavily take into consideration when thinking about your financial decisions in your life and the next one is for going further educational opportunities so if you've watched videos on this channel before you maybe have seen the one where we've discussed whether or not college is actually worth it we ran the numbers we found that statistically if you run the numbers it is still worth it to go to college it's still but you're going to make more money and be able to pay off those loans but that doesn't mean that everyone should go to college but it's important to keep going with education whether that is trade school maybe that is Community College maybe that's in actual college or maybe it's just your free local library but the point is that it's important to continue to learn more and that's a big mistake that people make it's maybe they graduate high school they get a job and they don't go past that they don't learn they don't push themselves maybe they enter a trade maybe they become a plumber or a welder or an electrician and they don't go past that they get their certification and they don't go past that that goes for college education as well people might get a bachelor's degree maybe a master's but then they don't go past that they get their job and they stay at that level they don't further educate themselves more and more and more and like I said you don't have to go to college but find ways to educate yourself for example maybe videos like this one or reading books I absolutely love reading books for free at your local library it's just something that I think everyone should do if you're not doing that it's just something that you will regret in the future saying why didn't I take the time to learn some things that I could have really really benefited from a great example of this is some people will read a book when they're 40 years old or 50 years old so they'll read this book called Rich Dad Poor Dad really good book I'll leave a link for it down in the description they'll read it and they'll say wow I wish I read this when I was 20 I wish I read this when I was 30 instead of reading it when I'm 50 because I could have made so many smarter decisions financially if I had just picked up this book earlier so just pick up some books and learn as much as possible so so important the next one is by forgoing insurance options or ignoring certain insurance options that may be available to you so one of these about that we could specifically talk on is life insurance so especially if you have a young family this is something that you're not going to want to push off but so many people just keep pushing it off pushing it off pushing it off until it's too late until you come down with some type of illness or you possibly even die right so this is what happens so often but people just keep pushing it off pushing it off and eventually it's too late to get that life insurance so consider picking up some life insurance when you're younger this is something that it really depends on your situation and the people that you might be leaving behind if you love young kids you're probably going to want some type of insurance and you're probably gonna want to do that very soon before five years go by and you still haven't done it yet and sometimes it can be very difficult to get insured if you have an illness already and you're trying to get life insurance for that so try to do it when you're healthy try to do it when you're when you're younger and it could benefit you in the long run just something that you want to not forget about when you're making these decisions and number four here is what we call DIY investing and this this mistake many people make this but there's a way to go about this so the mistake that people are making is they're jumping into the market too fast and they say Nate how do I start investing into the stock market I want to start and they from $50,000 into the stock market and they lose their shirts so the way to do this what I would suggest doing and like I said I'm not a financial advisor but what I would suggest doing and what I did start with 50 dollars put it into an investment account if you want to start investing into the stocks just start with 50 dollars and then start building it up over time and over time you learn from your mistakes it's sort of like say you wanted to become Allen Iverson or Michael Jordan tomorrow it's just difficult to do that you need to take a lot of practice take a lot of shots and there's going to be times where maybe you make some mistakes but if you start with 50 dollars in your investment account it's okay if you make those mistakes you learn from those mistakes and you get better just like what I said with playing basketball eventually with all that practice you start to get better and better it's going to be difficult to go right out the gates and become a Warren Buffett within five days of investing into the stock market it takes a little bit of time to build up and learn from those mistakes while also reading a lot of books and learning a lot of information about this topic so don't jump into the market it's too fast start to learn as much as you can about and start with a small amount of money add five ten fifteen twenty dollars per a week to this account and then eventually it starts to build up you start to learn more and then you become a much better investor over time without losing too much money up front or without making too many big mistakes up front number three is not refinancing your home mortgage now if you just look at the interest rates from November until today you've seen that they've gone down quite a bit and with this you can actually refinance your home mortgage to save money now this isn't for everyone it depends on the interest rate that you got and your credit score and how you're doing financially but some people might want to consider refinancing their mortgage to get a better rate and people are leaving hundreds of dollars per month on the table by not refinancing their mortgage so especially if you got a mortgage back some time ago and it was at a considerably high interest rate you can refinance that and get a much lower monthly payment on it and save a lot of money so just look into it something that you might want to consider doing after this video just looking at your mortgage looking at the current rates looking at your credit score seeing how you're doing financially and then making that decision as to whether or not it's worth it it's not going to be more to forever what if you can get just a barely lower rate it might not be worth it but if you can get a considerably lower rate from your current mortgage then it could be something that you want to look into so pretty self-explanatory we're not going to go too much into detail on that one but number two is interesting it's by essentially not having enough taxes withheld from your paycheck now this one is somewhat debatable because you can go either way with this now the the issue here is that some people especially if you find yourself not very good with managing money potentially they'll have not enough money withheld from their paychecks so maybe you have a zero one or two from your paycheck and you can decide how much money is getting withheld from your employer that's the way it works Uncle Sam doesn't trust us to pay all of our taxes at the end of the year so our employer has to withhold that money from us and then we will pay that money to the government at the end of the year the balance whether we still owe some money or they owe us some money so that's why you'll get some tax returns and you might get some money back from the government in April but it could also go the other way where you owe money to the government in April as well so some people if you find yourself in a position where you're not very good financially then you might want to consider and I'm not an accountant you're gonna want to consult an accountant with this but you might want to consider having more taxes withheld from your paycheck so that you get money back at the end of the year instead of not having enough taxes withheld and then actually having to oh the government $1,000 to $2,000 at the end of the year especially if you're very tight on money it could be something that is a little bit more psychologically better for yourself to get money back instead of having to pay into it when you can't afford to do that so just something that you want to consider but on the flip side of this you could also think that if you're very good with your finances and you're very good at managing you could actually under pay for taxes and have your less money withheld so that you can invest that money may be put into just a simple savings account or even a CD that's netting you a couple percent and then pay that money to the government when it's owed at the end of the year in April and actually be a little bit better off but that's something that you just want to look into like I said I'm not an accountant so you're going to want to not take every word that I say here for exact fact but just something that you want to consider okay and the last one I think we've mentioned this one other time on this channel but it's by not in managing your subscriptions correctly I sat down with one of my friends recently and they just asked me to kind of look over their finances and just see where they could cut some costs just as a friend to help them out and we sat down and we looked at their credit card statements and there's so many payments on there that just make no sense and they don't use most of those different subscriptions now maybe you're in the same boat I know this has happened to me in the past where maybe you have Amazon Prime and you're paying $6 a month and and you're paying for it but you're just too lazy to actually go onto your Amazon account or maybe you forgot your password and you're too lazy to go onto your account and click cancel so you just don't do it and you see that six dollar payment hitting your account every single month and you just never get around to it happens to me sometimes happens to a lot of people what you want to do just take a day and just go through all of your accounts the things that you're not using maybe of Hulu Netflix Amazon all kinds of different subscriptions and just cancel them just cancel all of them at the same time because those little payments certainly add up if it's only six dollars a month multiply that by 12 and that's over $70 per year over multiple years I know people who have payments subscriptions for things that they haven't used in years literally a decade they haven't been looking at their newspaper that they get delivered to their house every single day but they're still paying it just doesn't make very much sense so get rid of those subscriptions that you just don't need and you're gonna be much better off financially so those are the different financial decisions that you may regret at some point in the future like I said they're not set in stone it's something that you want to look into further on your own but thanks for watching this video I appreciate all the support on the channel and I hope everyone has a wonderful day

Channel: Nate O'Brien

Views: 82,758

Rating: 4.925302 out of 5

Keywords: personal finance, financial regrets, finance 101, nate o'brien, financial decisions, how to invest, how to invest money, how to start investing, investing advice, learn to invest, stock market, save money, investing, the financial diet

Id: At-cde5dhGk

Length: 13min 11sec (791 seconds)

Published: Wed Jul 10 2019