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The 3 Biggest Financial Mistakes I See

By Joe Arnold, AIF®


April is Financial Literacy Month, which is both a celebration of personal finance achievements and a challenge to continue educating yourself about fundamental financial concepts. Financial literacy is the lifelong process of learning more about your finances and your financial opportunities so you can make the most informed decisions with your money. 


Financial literacy is also knowing what not to do with your finances. With this in mind, here are 3 of the biggest financial mistakes I see. These financial mistakes can have far-reaching effects on an individual’s financial security. Our hope is that when you know about these mistakes, you’ll be less likely to commit them yourself.

1. Failing To Plan For Retirement 

One of the biggest financial mistakes I see is when people think that contributing to a 401(k) or other retirement plan is all the retirement planning they need. But with average Social Security payments in 2020 amounting to no more than $1,503 a month ($18,306 per year), (1) most people need to be saving a significant amount of their income each year before retiring.


Sadly, Americans are behind on retirement savings rates. In a 2019-2020 report, the U.S. Government Accountability Office found that the median retirement savings for Americans between age 55 and 64 was only $107,000. (2) Savings at this amount will not last long to sustain most individuals through their retirement years.


Retirement planning involves much more than socking away 3-5% of your paycheck into a retirement account. Good retirement planning should include budgeting to maximize savings, analyses to determine the most optimal Social Security strategy, and developing an investment plan to create retirement income that will last (possibly for decades).

2. Improper Asset Allocation

Another mistake I see is improperly allocated portfolios. Most investors recognize that portfolio diversification is important, but they may be misinformed about risk and risk tolerance. If you consider yourself extremely risk-averse and thus structure your portfolio too conservatively, you may not realize that you’re risking your security in other ways.


If your portfolio is too conservative when you’re still decades from retirement, you risk returns that are too low to outpace inflation, decreasing your purchasing power significantly down the road. On the other hand, if your portfolio is too aggressive when you’re approaching retirement, you risk losing money you were depending on with too little time to earn it back from market recovery.


Risk tolerance and asset allocation should not be static characteristics. Instead, your risk tolerance and asset allocation should adjust to changing circumstances in your life. An experienced advisor can help you decide when it’s the best time to make the shift.

3. Not Adjusting Portfolios To Changing Economic Environments

Just as portfolios should adjust to your changing life circumstances, they should also adjust to changing economic environments. Although we don’t necessarily recommend changing your portfolio every time we experience market volatility, greater underlying economic trends may warrant portfolio shifts. Among other things, these trends may include:

  • Rising or declining interest rates
  • Changing your investment allocation
  • Protecting against inflation
  • Protecting your principal 

It can be difficult to track economic trends, and even more difficult to know what they mean for your investments. This is why it’s important to partner with a trusted financial expert when you want to protect the wealth that is meant to fund your future security.

See How We Help 

At Foundation Wealth Advisors, our goal is to help individuals and business owners solve their financial challenges and avoid the mistakes listed above. We value trust before transactions and believe that when it comes to your finances, transparency and understanding are key. To find out how we can help you, schedule a complimentary appointment by calling (440) 899-7535 or emailing me at

About Joe

Joe Arnold is an independent financial advisor and the founder and president of Foundation Wealth Advisors, LLC, an independent firm whose advisors provide private investment management for individuals and families, as well as retirement plan consulting for small and mid-sized businesses. With 20 years of experience in the financial industry, Joe specializes in providing objective advice to individuals, as well as transparency in building and managing company 401(k) retirement plans. He is committed to putting his clients’ best interests first in all decision-making and recommendations. Based in Westlake, Ohio, he serves clients in the Cleveland, Akron, and surrounding areas, as well as throughout the country. Joe received a bachelor’s degree in business administration from Cleveland State University and is an Accredited Investment Fiduciary® (AIF®). He has been featured on national television, including CNBC and FOX Business, and quoted in various publications, including The Wall Street Journal, CNN Money, Forbes, and others. Joe lives in Rocky River, Ohio, with his wife, Allison, and their two grown children, Kevin and Keira. An avid golfer, he is a former Class A PGA of America teaching professional and NCAA Division 1 athlete. When he’s not working, he enjoys playing golf, reading, and honing his culinary skills. To learn more about Joe, connect with him on LinkedIn.




Check the background of this financial professional on FINRA's BrokerCheck
Check the background of this financial professional on FINRA's BrokerCheck