How do you end up in financial distress? There are many reasons, and, when it comes to facing a potential bankruptcy, very often the biggest triggering event is a medical crisis or a divorce. But there are smaller factors that can add up to your finding yourself in a big crisis. This is the ninth in a series on what one bankruptcy attorney identifies as the “Top Ten Personal Financial Mistakes” people make. His list is useful for all of us to review and consider, and his posts link to helpful resources available on the web. Be sure to click on the link below to his post and check out the resources he provides, too.
Here’s an excerpt from the series by Eugene S. Melchionne, Connecticut Bankruptcy Attorney at www.bankruptcylawnetwork.com.
Diversify your investments for the future. Financial advisors will always tell you not to put your eggs in one basket. One only need to look at 1929 to see the effect of investing too heavily in the stock market had on investors. This pattern is repeated throughout history.
Currently we are seeing a huge contraction in the mortgage industry.
Gene wrote this before the tumultuous September/early October days surrounding the various, huge governmental actions called either a bailout or a recover plan, depending on your perspective. Learn more about diversification — what it is, what your options are. The idea, in part, is that while one kind of account loses value, another will gain, and, presumably and hopefully, over the long run, you will get an overall decent rate of return on the invested/saved money.
Earlier posts in the series: Failing to Live With Direction, Living Beyond Your Means, Borrowing Money With Credit Cards, More on Borrowing From Credit Card Companies, Having No Emergency Fund, Failing to Save for Long-Term Needs, Failing to Accept Free Money, Miscalculating Life-Insurance Needs