Advisors share their money mistakes. Here’s what they have in common

CNBC staffers reveal their worst money mistakes

When it comes to money, mistakes happen.

Even our most trusted sources of financial information and advice have their own regrets.

Here, members of the CNBC Financial Advisor Council share their biggest financial mishaps and what they’re doing differently now. Either way, as a younger self, they made compromises that sacrificed their long-term financial well-being.

If we can learn from them, we might not fall into the same trap.

money error: “I didn’t negotiate my first salary”

“When I first started financial planning, I got an offer for $40,000 with a 401(k) and a 4 percent match and I thought I had won the lottery,” he said Sophia Bera DaigleCEO and Founder of Generation Y planning, an Austin, Texas-based financial planning company for millennials. That exhilaration led to a mistake: “I didn’t negotiate my first salary.”

But the following year, the economy faltered, annual raises were put on hold, and her employer dropped the 401(k) lawsuit, she said. “I made just as much money in my first five years in financial planning.”

Although wages were particularly stagnant during the Great Recession, salaries are once again in the spotlight as inflation weighs on the financial health of most workers.

How to negotiate your salary before accepting the job

And still, more than half of workers don’t negotiate when they receive a job offer. CareerBuilder found.

Nevertheless, the negotiation works. According to Fidelity, 85% of Americans — and 87% of working professionals ages 25 to 35 — who countered salary, benefits, or both got at least some of what they asked for.

Trust is key, said Bera Daigle, who is also a certified financial planner and a member of the CNBC Advisor Council. Know your worth and what you want. It could be a higher paycheck or advancement opportunities, flexibility, or vacation time.

“If you get a resounding ‘no,’ ask what it would take to put a raise on the table six months from now,” she advised. “That’s really helpful too.”

money error: Lease “too much” car

Thianchai Sitthikongsak | moment | Getty Images

“My biggest financial mistake was when I was an early financial advisor at Smith Barney,” said Winnie Sun, co-founder and chief executive officer of Sun Group Wealth Partners, based in Irvine, California. “My colleagues at the time really encouraged me to buy a new luxury vehicle and said that leasing would be a good option given the nature of our business.”

So Sun, a member of the CNBC Financial Advisor Council, treated herself to her dream car. “I signed a three-year contract and got away with it in a gleaming white Mercedes Benz convertible.”

“Was it nice? Yes,” she said. “Was it the right way to spend my money? No way.”

Today, financing a new or used car is even more expensive, new research shows.

More from Ask an Advisor.

Here are more perspectives from the FA Council on how to navigate this economy while building wealth.

Amid rising interest rates and higher car prices, the proportion of new car buyers paying more than $1,000 a month has jumped to a record high Edmunds. According to Ivan Drury, director of insights at Edmunds, more consumers now face monthly payments they probably can’t afford.

Sun said its high lease payments were at the expense of other investments. “I could have done a lot more with the money and invested it in the future.”

In fact, most experts advise spending no more than 20% of your net earnings on a car, including payments, insurance, and fuel or electricity.

I’ve never bought a new car again.

Winnie Sun

Managing Director of Sun Group Wealth Partners

Used vehicles might be a better deal. A certified used vehicle, which usually comes from a lease, often comes with warranty coverage, which greatly reduces the worries that buying a used vehicle can also bring.

“I’ve never bought a new car again,” Sun said. “And the money I saved went into my kids’ college savings accounts and has grown well and is certainly more valuable than a leased car.”

Money mistake: Invest fully in technology

“I got into investing in the go-go ’90s, which were great years for the market,” said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Fla. “We were invested in tech stocks and anything that was risky.”

These same companies largely went under when the dot-com bubble burst in 2000.

“We lost a lot of money when the market crashed,” said McClanahan, who is also a member of CNBC’s Advisory Board.

“If we had known about diversification and a low-cost passive approach, we would have been much better off.”

When it comes to investing, most experts recommend a well-diversified portfolio of stocks and bonds, or a diversified fund like one S&P 500 index Funds to weather the ups and downs rather than chasing a hot stock or sector.

Investors should also check back regularly to review their asset allocation to ensure it’s still working to their advantage.

Money error: unloading inherited stocks

“My wife inherited shares in Phillip Morris from her father,” said Lee Baker, an Atlanta-based CFP.

But since smoking contributed to his death, the couple fought to own shares in the tobacco giant. At the same time, “there was a discussion going on in Congress about a sin tax, so I thought it was a good time to sell.”

However, the legislation failed to materialize and Philip Morris continued to prosper.

“For me, the biggest lesson is to be careful about making investment decisions based on what politicians say they want to do,” said Baker, founder, owner and president of Apex Financial Services and Member of the CNBC Advisory Council.

Patcharanan Worrapatchareeroj | moment | Getty Images

Still, some investors think it’s important to consider backing companies that reflect their values ​​or lifestyle.

“Today, when we talk to clients about inherited stocks, we still take the time to find out if there are any emotions associated with the stock, be they positive or negative,” he said. “Once we get a handle on the emotional side of the equation, we’re in a better position to discuss the stock from an investment perspective.”

For some, that could mean shifting their portfolio away from tobacco holdings, although stocks like Philip Morris have proved winners within the vice group.

Money mistake: do not consider long-term care

Most families do not think about long-term care until a health crisis hits.

“I waited until we were in our mid-50s,” said Louis Barajas, CEO of International Private Wealth Advisors in Irvine, California. He is also a CFP and a member of the Advisory Board of CNBC.

“It was because of our procrastination or because we were too busy,” Barajas said. Meanwhile, his wife Angie was diagnosed with colon cancer. “It’s getting a lot more expensive now, it could be priceless,” he said.

There are insurance options to help offset the cost—from traditional long-term care insurance to hybrid policies that combine life insurance and long-term care insurance. But in general, the younger you are, the cheaper your insurance premiums are.

According to Policygenius, insurance premiums increase by an average of 8-10% for every year you delay purchasing coverage, which is why some experts advise looking into long-term care as soon as possible.

“You have to start thinking with a look at the present and a look at the future,” Barajas said. Advisors share their money mistakes. Here’s what they have in common

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