Mistakes: Impatience

by Kevin on March 24, 2008

Read some other financial mistakes.

Perhaps you are not a procrastinator like myself. You’ve got your list organized, and you are ready for life to change. You’ve got a budget, you’ve planned ahead, and you are now anxious to see results.

“Why aren’t we out of debt yet?”

“Why can’t we retire yet?”

“Why isn’t anything getting easier for us?”

Perhaps you are being a bit impatient? This is the opposite end of the spectrum from procrastination. You simply can’t wait for something to happen. You’re anxious about progress on your goals. That can be healthy if kept in check. Not kept in check, it can impede your ability to move forward. It may even encourage you to question your past actions. That can end up with you undoing any positive progress thus far.

For example, we recently funded a Roth IRA for the 2007 tax year. We put $4,000 in with Vanguard. 2008 has been a crazy year for the stock market, as I’m sure you’ve noticed. Some time last week I checked the balance on our IRA and it was down 2.5% — within a month of opening the account! That was not a complete shock to me, but it still hurt to look at. If I were impatient and hoping for better results, I might do something rash like move the investments to something currently hot (like commodities) or even pull the money out of the account. Either of those are poor choices, as noted by the account recovering all but a small portion of its value at the end of last week.

A 2.5% loss within a month isn’t great, but as far as I know it was better than the market had accomplished that far. A loss of that little is virtually meaningless over the next 40 years. Imagine I had closed the account, or never put additional money in. The long term loss caused by that poor decision would be massive — more than 2 million dollars by my calculations.

So to answer the above questions, why aren’t you out of debt or able to retire just yet? Perhaps you just got started, or recently had a setback. Give it some time, and continue to make smart moves. Doing something is better than doing nothing. Just don’t expect results today. Take your debt reduction and wealth building steps one at a time.

{ 1 comment }

Matt March 24, 2008 at 9:32 am

Being impatient can really drag you down when it comes to the finances – you don’t see the progress that’s been made so far. I know that I’ve been impatient at times… but rather than being anxious and impatient you can turn that energy into seeing what else you can do to speed the process of getting out of debt out. If there’s nothing you can do just make sure you don’t spend anymore money 🙂

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