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Even Certified Financial Planners Have Regrets — Avoid Their Mistakes

Gabrielle Olya

Certified financial planners are among the most trusted and sought-after professionals when it comes to advice for financial issues and money problems — and with good reason. Becoming a CFP entails a number of steps, from taking educational courses to passing a rigorous certification exam. Despite all their expertise, however, even CFPs have made money missteps somewhere along the way.

GOBankingRates asked CFPs to share their biggest financial regrets. Find out what they said — and how to plan better so you can avoid their financial mistakes.

He Didn't Educate Himself About Investing Beforehand

Ryan Marshall, CFP, a partner at ELA Financial Group in Wyckoff, New Jersey, said he wishes he’d taken more time to learn about investing before buying stocks as an 18-year-old.

“I had a gift trust account set up for me and earmarked for college,” he said. “As soon as I turned 18, I changed the account over to my name and started to day-trade it in high school study hall. It was November of 1999 and I lost more than half of the value my senior year of high school. My investment strategy was to pick the best performers for the year prior, and this was during the tech bubble.”

Marshall said the positive side of his error was that it motivated him to get educated. He became fascinated enough with the financial world that it led him on the path to becoming a financial advisor. He said he now helps clients “not make the same mistake I made 20 years ago.”


What To Do Instead

Before you invest, be sure to do your research and figure out what investing strategy is right for you. If you are unsure how to best invest to meet short-term and/or long-term financial goals, consider meeting with a financial advisor to help you come up with the right plan for your needs.

He Didn't Invest Early in Major Tech Stocks

On the flip side of the coin, Gregory W. Lawrence, CFP and founder of retirement planning firm Lawrence Legacy Group in Estero, Florida, regrets not getting into the investment game early enough — particularly when it comes to tech stocks that have increased in value exponentially over the years.

After nearly 40 years of investing, I certainly have more than one regret,” he said. “There are, of course, those regrets for not buying Apple, Facebook or Google in the beginning, or any number of other meteoric stock’s growths that I have missed for myself and clients. Like they say, ‘Hindsight is 20/20.'”


What To Do Instead

It’s never easy trying to predict the next big thing in the stock market. But once again, it all comes down to doing enough research to increase your odds of spotting potential high flyers. It’s still probably best to choose a stock that’s shown long-term growth over the “hot stock” of the moment.

He Didn't Sell When He Should Have

Bill Francavilla, CFP, author of “The Madoffs Among Us,” missed out on a big profit by holding onto a particular stock for too long. 

“I once had a very large gain in a publicly-traded company but chose not to sell,” he said. “Rather, I got greedy and was convinced the price would go higher. It fell to below my purchase price. I realized a capital loss when it should have been a terrific capital gain.”

What To Do Instead

If your investment goal is short-term rather than long-term gains, you should predetermine when you plan to cash in on your stocks and sell when prices reach that point. A financial advisor or investment professional can help you determine the best times to buy and sell stocks.

Everything You Need To Know About Budgeting: How To Create a Budget You Can Live With

He Bought and Sold a Rental House at the Wrong Time

Bob Harkson, CFP, principle advisor at Phase 2 Wealth Advisors in Gig Harbor, Washington, purchased a rental home in 2015 — when the housing market looked to be peaking — and sold it that same year, missing out on profits he would have made if he would have held it longer.

“In order to pay for the rental, I borrowed on my own home, which was paid off,” he said. “To continue with the bad timing, I sold the rental house in 2015 instead of waiting until 2019, when the housing market in that area became one of the hottest in the United States.”


What To Do Instead

Buying a rental property is a major decision that you shouldn’t rush into, but when done right it can be an excellent source of passive income. Make sure you’re financially able to not only buy a property but also pay for any maintenance and other issues that pop up along the way. Also, consider whether your financial goal is to make long-term rental profits or to own it for the short-term and flip it.

He Waited Until His Late 20s To Get a Credit Card

Holding off on getting a credit card for too many years turned out to be a regret for Paul R. Ruedi, CFP, a financial advisor at Ruedi Wealth Management, which has offices in Champaign, Illinois, and Plano, Texas.

“I was kind of old-fashioned in my mentality about spending and thought since you shouldn’t spend money you don’t have, I should just live my life only spending from my debit card,” he said. “I thought I was being extra responsible for never needing a credit card.”

By the time he reached his mid-20s, however, Ruedi basically had no credit history aside from apartment rent and utility bill payments.

“I started to worry that I wouldn’t have the ability to borrow for things like a house that require — or are at least made much easier by — by good credit,” Ruedi said. “Eventually, at the [prodding] of my then-girlfriend (now fiance), I ended up getting a credit card to establish a credit history and am very glad I did, as it helped us get our mortgage when we bought our house this year. But even though my credit score is good, there is no doubt it would be higher had I not waited so long to get a credit card.”

What To Do Instead

Credit cards are a great way to build your credit history, so it’s never too early to get one. However, you should treat your credit cards like debit cards. Make sure you are always able to pay them on time and in full. Missing payments and having too much debt on your cards can hurt your credit score.

He Blew His Budget on a Car

Stephen Gunter, MS, CFP, an associate advisor at Bridgeworth, LLC in Huntsville, Alabama, regrets once spending more than he had budgeted for on a car.

“I had a budget of what I wanted to spend but was having a hard time finding what I wanted within my budget, so over the course of several days I ended up convincing myself that I had to increase my original budget by about 25% to get what I wanted,” he said. “I bought something, and it was easily the worst purchase I ever made. The vehicle had problem after problem and it ended up costing me thousands of dollars and innumerable sleepless nights thinking about how I should have listened to my own advice and stuck with my budget.”

What To Do Instead

Before you even step into an auto dealership you should have a clear sense of how much you can afford to spend on a car. Keep in mind that car costs not only include the monthly payments for your lease or your loan, but also repair, maintenance and insurance costs — plus gas. Once you know how much you can afford to pay toward your car every month, stick to that budget.

Get Budgeting Help: 14 Completely Free, Easy-To-Use Budget Templates

She 'Followed the Crowd' and Ended Up Investing In Losing Stock

Betty Wang, CFP, founder and president of BW Financial Planning in Greenwood Village, Colorado, made a regretful investment in her 20s.

“Straight out of school in my early 20s, a friend was talking about a hot stock he bought [and] how it was a no-brainer. I bought 200 shares,” she said. “The stock price collapsed shortly after and never recovered.”

What To Do Instead

Don’t buy stocks just because a friend or family member says it’s a good idea.

“It was a great lesson to do your homework and not to follow the crowd,” Wang said. “I’m glad I learned that tough lesson early and with a very small amount of money.”

She Didn't Fully Understand Her Own Relationship With Money

Alexandra Wilson, CFP, financial advisor, financial coach and student loan expert at SmartPath in Atlanta, regrets not always understanding how her beliefs about money affected her financial life.

“My biggest money regret is not realizing my money script sooner in life,” she said. “Knowing your relationship with money is pivotal for getting past bad spending habits such as buying things you cannot afford. I regret the ignorance I had in college because it caused financial struggles for many years, but now that I know, I am able to control my spending and practice mindfulness when shopping — something I wish I did much sooner!”


What To Do Instead

According to Psychology Today, everyone falls into one of four “money scripts”: money avoidance, money worship, money status and money vigilance. These scripts control our relationship with money, including our spending and saving behaviors. They range from not caring enough about money to caring way too much about it. Acknowledging which script you’ve fallen into, and taking steps to consciously change your attitudes about money, can help you be more mindful in all of your financial decisions and break bad habits.


He Focused Too Much on the 'Now' and Not Enough on the Future

In between graduating from college and going to graduate school, Stuart Ritter, CFP, senior financial planner at T. Rowe Price, spent two years in the working world and earned the equivalent of $107,000 in today’s dollars.

“To this day I have no idea what I spent that money on,” he said. “I lived in an apartment so I had rent, and I had a car and groceries and gas and stuff like that, but $107,000 is a lot of money. It has always bothered me that I still have no idea what I spent that money on.”


What To Do Instead

When figuring out your budget, it’s important to strike a balance between the things that you want or need to pay for right now and the things you will want and need to pay for down the line.

Ritter said his money mistake taught him “to think about not just, ‘Is this something I want to do right now?’ but ‘How does it compare to something I might want to do later?’ Recognizing that the decisions I made in the moment were affecting both the things that I could think of at the time and things I hadn’t thought of yet was one of the lessons I took away from it.”

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This article originally appeared on GOBankingRates.com: Even Certified Financial Planners Have Regrets — Avoid Their Mistakes