Latest news with #financialmistakes
Yahoo
4 days ago
- Business
- Yahoo
This Is the No. 1 Mistake Americans Make During a Recession, Says Financial Expert
When times get tough and headlines scream 'recession!' it's only natural to want to scale back and lay low. But according to financial experts, many Americans are making one major misstep that could actually hurt them and their money more in the long run. Be Aware: Consider This: GOBankingRates spoke with Emily Irwin, head of the Advice Center at Wells Fargo, to discuss the No. 1 mistake people make during a recession — and what you can do instead to stay smart and steady when the economy gets shaky. Here's what she had to say. Mistake: Letting Emotions Fuel Your Action or Inaction According to Irwin, the biggest mistake investors make during a recession is letting emotions fuel their action or inaction. In fact, CNN reports that recession fears are being blown out of proportion and it's more urgent to worry about inflation instead. 'As your portfolio is decreasing in value, it's human nature to want to sell assets to stop the pain,' Irwin said. She added this may not yield the desired results, however, because you're selling when the market is depressed, and many investors find it paralyzing to determine when to reenter the market. Explore More: This means that you're hit with a double whammy of exiting the market when it's down plus potentially missing out on the upside when there's a recovery. Irwin also noted this behavior can accelerate other investment decisions that can magnify the problem, such as overweighting in certain stocks or industries with the intention that this will speed up the process of recouping any losses. 'If you cannot resist the urge to exit the market, put a methodical plan in place to reenter it using a dollar cost averaging approach,' she said. 'A certain amount or percent on a recurring basis.' Solution: Have a Financial Plan in Place One of the best ways to prepare for a potential recession, according to Irwin, is having a financial plan in place. 'A financial plan can neutralize an investor's inclination to act on pure emotion during periods of marketing volatility or recession because the financial plan should incorporate the investor's goals, time horizon, and risk tolerance,' she noted. It may also highlight any potential portfolio risks that can be magnified during a recession, such as a concentrated position, as well as showcase potential opportunities, such as building up cash reserves that can be used for emergencies or investment opportunities. She said being proactive to understand your full balance sheet: Income, expenses, tax liabilities, and running at least one scenario illustrating decreased incoming cashflow and increased (or static) cash outflow. This can provide advance comfort to investors as to how much bandwidth exists to absorb a recession. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Cars That Outlast the Average Vehicle 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth This article originally appeared on This Is the No. 1 Mistake Americans Make During a Recession, Says Financial Expert
Yahoo
7 days ago
- Business
- Yahoo
Are You Smarter Than Elon Musk? If So, You Can Avoid His 5 Money Mistakes
Regardless of what you think of Elon Musk, the man certainly knows money — after all, with a net worth that vacillates from $380 billion to $420 billion, he is currently the wealthiest human being on the planet. A great deal of that wealth stems from his ownership of the space tech company SpaceX and the automotive company Tesla. Also See: Learn More: That said, not everything Musk has touched has turned to gold. He certainly has made mistakes along the way that have cost him financially. While Musk is in the enviable position to be able to afford such mistakes, that's a luxury most people don't have. As a result, Musk's moments of money mismanagement can provide lessons for those who don't happen to have the $400 billion safety net that he does. Without that buffer, many of his financial errors are things you'd likely not repeat. Right? Here are five lessons you can learn from his money mistakes — unless you know better already. Don't Overpay In 2022, Musk spent a whopping $44 billion for the social media platform Twitter (and changed the name to X). Following his takeover of the platform, the social media outlet was beset by technical problems, as well as controversial content issues. Musk later admitted that he was 'overpaying for Twitter right now.' Musk was so determined to acquire the platform that he appeared willing to pay almost any amount of money — a buyer's instinct that can lead to financial disaster for those who can't afford it. Sometimes a shiny object, be it a new car or new house, can be enticing, but almost nothing is worth overpaying and risking financial ruin or wasting your money. Also Discover: Check Out: Avoid Risky Investments When Musk purchased Twitter/X, it reportedly dropped in value by a shocking $25 billion. The Twitter value crash took Musk's Tesla with it, dropping the automotive manufacturer's stock value by 23%. The lesson here? As billionaire investor Warren Buffett once said, 'Never invest in a business that you cannot understand.' To that end, you could view Musk's investment in the Donald Trump presidency as a wash — Musk reportedly spent $290 million to help return Trump to the White House in the 2024 election. While the gambit paid off, Musk's involvement with the Trump administration led to Tesla's stock dropping and an eventual messy public rift between Trump and the world's richest man. Find More: Keep Partner Disagreements Internal Despite Musk previously being all in on the Trump administration (financially supporting Trump's reelection, becoming 'the First Buddy' to Trump, heading up DOGE), the two men had a very bitter and public split following Musk's criticism of the president's 'Big Beautiful Bill.' Musk argued that the bill (which has since been passed into law) would massively increase the federal deficit while devaluing electric vehicle tax credits — and thus hurting Tesla. This led to the two men trading insults over their social medial platforms (X for Musk, Truth Social for Trump) — the result of which was Tesla stock falling and knocking Musk's net worth down by $15 billion. Trump also threatened to cut $38 billion in federal contracts for Musk. Don't Do Business With Family In 2016, Musk's Tesla acquired the solar energy company SolarCity — an outfit that was co-founded by Musk's cousins. Tesla shareholders were critical of the move, which appeared to be a bailout orchestrated by Musk to assist SolarCity. Musk defended the move, calling it an investment in sustainable energy; meanwhile, Tesla shareholders balked and filed lawsuits, calling it a personal move rather than a business one. Beware Messy Divorces Musk has married two women, with both marriages ending in very costly divorces. His first divorce to Justine Musk ultimately cost him $20 million in a settlement, which reportedly includes $20,000 monthly in expenses. Musk divorced actress Talulah Riley in 2012, settling the split with a relatively inexpensive (for him) $4.2 million payout. He remarried Riley a year later, but they split again in 2015 with a divorce settlement of $16 million — meaning Musk paid $40 million to end his marriages. More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on Are You Smarter Than Elon Musk? If So, You Can Avoid His 5 Money Mistakes
Yahoo
20-07-2025
- Business
- Yahoo
Humphrey Yang Reveals A 'Poor Financial Decision' That Can Cost You Millions
Making fewer mistakes on your financial journey can help you build wealth faster. While some mistakes are worse than others, financial guru Humphrey Yang recently revealed a 'poor financial decision' that can cost you millions. This decision often stems from fear and not wanting to take risks. While it may be scary to take a risk in the moment, these same risks can set you up for long-term wealth. Yang identifies the mistake and shares what you can do to strengthen your finances. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab $100k+ in investable assets? – no cost, no obligation. Don't Let Your Cash Sit On The Sidelines Yang mentions that letting money sit in cash is one of the worst mistakes you can make. While there are benefits to establishing a small emergency fund, being afraid to invest money can result in significant losses. Although you will retain the same paper money if you avoid stocks and real estate, your purchasing power will go down. Yang says that keeping $1 million in the bank for 30 years would have been a terrible idea. However, he also mentions that if someone invested the same $1 million into an S&P 500 fund that averaged an 8% annualized return, they would end up with more than $10 million. Yang also mentioned that if you averaged a 3.5% return during that stretch via bonds and CDs, you would have ended up with $2.8 million. The one caveat with this return is that interest income is treated as ordinary income, which results in higher taxes. On the other hand, you'll get better tax rates with long-term capital gains on an S&P 500 fund, and you only pay taxes on that fund when you sell shares. Trending: Named a TIME Best Invention and Backed by 5,000+ Users, Kara's Air-to-Water Pod Cuts Plastic and Costs — Purchasing Power Goes Down Each Year Money loses value each year due to inflation. Yang mentioned that inflation growth has averaged 2.52% per year since 1995. It's the main reason why everything feels like it's getting more expensive. When the government prints more money, the amount of goods does not change. Therefore, you have more money chasing the same number of goods and services. Yang provides an example of buying an iPhone at an auction. If everyone suddenly had more money to bid with, the iPhone would end up selling at a higher price. This trend doesn't look like it will stop. The government currently has a large debt that regularly accrues interest. Those interest payments require more money printing, which increases inflation. Any government spending also boosts To Counter Inflation The cost of products and services will continue to go up over time as federal debt and government spending increase. However, there are ways you can counter inflation. Yang mentions taking your money and putting it into an S&P 500 fund. This general concept is the key to keeping inflation in check when it comes to your finances. Investing in stocks, real estate, and commodities can help you ride the current instead of getting left behind. These assets have fixed supplies. Printing more money will not increase the amount of gold in the world, but more dollars chasing the same amount of gold will lead to higher gold prices. That's why gold and other commodities are considered valuable inflation hedges. Read Next: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Humphrey Yang Reveals A 'Poor Financial Decision' That Can Cost You Millions originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
03-07-2025
- Business
- Associated Press
The $10,000 Mistake YouTubers Are Making: MilX Reveals Hidden Financial Leaks in Creator Earnings
CLAYMONT, DE / ACCESS Newswire / July 3, 2025 / New research from MilX, a fast-growing fintech platform for creators, has uncovered a costly trend among U.S.-based YouTubers: avoidable financial mistakes are causing creators to lose up to $10,000 per The findings, released as part of MilX' s 2025 Creator Finance Study, shine a light on three critical areas where creators are leaking money: freelancer payments, currency conversions, and tax compliance. 'Most creators lose money simply because they don't know better options exist. With tools like zero-fee P2P payments by MilX, they could save thousands every year.' - Paul Lekhnovsky, CEO of MilX Freelancer Payments Take a typical successful U.S. YouTube creator: 300,000 subscribers, 2.5 - 4 million views monthly, earning between $14,000 and $60,000 per month through AdSense, sponsorships, and memberships. YouTubers at this level usually work with remote production teams - editors, designers, writers. MilX research shows that many pay these freelancers through PayPal, incurring: For a creator spending $1,500/month on freelancers, that's $110-$120 in fees per month. Currency Conversions Losses Many creators still get paid in the wrong currency: every conversion takes 2-4%. That might not seem like much, but over time it adds up - $500 to $1,000+ a year, gone. MilX fix: Convert once, at real-time FX rates, in the currency you actually use. Tax Filing Errors When you're a YouTuber, your revenue might come from multiple sources - AdSense, sponsors, affiliate links, merch, and fan support. But the IRS sees it all as taxable income. Don't forget to: Skipping any of these steps can lead to penalties, backup withholding, delayed payments, or even an audit. Skipping Deductions Not claiming business expenses can cost you even more. Here are a few examples creators often overlooked on tax returns: Missing these deductions alone could mean paying taxes on $7,000 to over $12,000 you didn't have to. MilX Helps Creators Keep More of Their Income MilX is designed to help creators access their YouTube earnings faster and manage their funds more efficiently - without losing money to unnecessary fees or delays. 'The $10,000 mistake is 100% preventable,' said Paul. 'We built MilX so creators can stop leaking cash and start building wealth.' MilX Co-founder Paul Lekhnovsky will attend the Europe 2025 FinTech Awards in London on July 3, where the company is a finalist in two categories: Startup of the Year and Disruptor of the Year. Contact InformationMedia Contact SOURCE: MilX press release
Yahoo
21-06-2025
- Business
- Yahoo
Warren Buffett's Top 7 Money Mistakes (And What He Learned From Them)
Warren Buffett didn't build his more than $100 billion fortune by being perfect. In fact, the Oracle of Omaha has been surprisingly candid about his biggest financial flubs over the decades. The good news is his mistakes offer valuable lessons for anyone trying to build real, sustainable wealth. Plus, they prove that even legendary investors are just humans who get it wrong sometimes. Welcome to the club! Find Out: Read Next: Here are Buffett's top money mistakes and, more importantly, what he learned from them. Buffett's investment in U.K. grocer Tesco shows how hesitation can turn small problems into major losses. Berkshire owned 415 million shares by 2012, but when concerns about management surfaced, Buffett sold only part of his position for a $43 million profit. When Tesco later overstated profits and shares collapsed, his delayed action cost Berkshire $444 million in after-tax losses. 'An attentive investor, I'm embarrassed to report, would have sold Tesco shares earlier. I made a big mistake with this investment by dawdling,' Buffett said. Speed matters in damage control. When red flags are abundant, sometimes quick decisive action means you avert a financial disaster. Learn More: Believe it or not, Buffett has called Berkshire Hathaway 'the dumbest stock I ever bought.' He purchased what was, at the time, a failing textile company because he felt insulted during a sale negotiation. Instead of walking away from Berkshire Hathaway as planned, his wounded pride led him to buy the entire business and fire the previous owner. The financial cost was enormous. Buffett said his holding company would be 'worth twice as much as it is now' if he'd stuck to his original plan of investing in insurance companies instead. This single emotional reaction cost him decades of better returns. The takeaway is clear: Never let personal feelings influence money decisions. When you feel personally slighted in a financial deal, that's exactly when you need to step back, take a breath and think logically. In 1993, Buffett thought Dexter Shoes had lasting competitive advantages that would protect its profits. Within a few years, those advantages evaporated and the company became worthless. Buffett explained: 'What I had assessed as a durable competitive advantage vanished within a few years.' This loss taught him that 'a truly great business must have an enduring 'moat' that protects excellent returns on invested capital.' Companies need permanent moats — like unbeatable brands, exclusive technology or cost advantages — that competitors can't easily copy. Without sustainable protection, any successful business will eventually attract competitors who'll drive profits to zero. The key is finding businesses whose advantages will last decades, not just a few good years. This mistake still haunts Buffett. Despite owning Geico insurance, which spent millions on Google advertising, he completely missed the search giant's investment potential. He had firsthand evidence of Google's business model working but failed to connect the dots. 'I made the mistake in not being able to come to a conclusion where I really felt that at the present prices, the prospects were far better than the prices indicated,' Buffett admitted. His reluctance to venture beyond familiar territory cost him one of the greatest investment opportunities in history. The lesson here is about missed opportunities. Sometimes the best investments are hiding in plain sight, but we ignore them because they seem too complicated or unfamiliar. Buffett's $9 billion acquisition of Lubrizol Corporation became an issue when it emerged that David Sokol, a Berkshire executive who recommended the deal, secretly owned stock in the company. Sokol made $3 million from the transaction without disclosing his conflict of interest. The oversight violated insider-trading rules and hurt Berkshire's reputation. At the 2011 annual meeting, Buffett said he should have asked better, more direct questions about Sokol's involvement. The lesson? Trust but verify, especially when large sums are involved. Even with people you've worked with (or simply known) for years, asking uncomfortable questions can prevent you from making mistakes. When crude oil hit $100+ per barrel in 2008, Buffett jumped into ConocoPhillips stock expecting energy prices to keep climbing. Instead, he bought at the peak and watched the investment lose billions as oil crashed. This demonstrates how even smart investors can get caught up in market excitement. 'When investing, pessimism is your friend, euphoria the enemy,' Buffett has said. When everyone is optimistic about a sector, prices often reflect that optimism, leaving little room for profit. Buffett learned that great companies can still be terrible investments if you pay the wrong price. Market euphoria creates expensive stocks, while pessimism creates bargains. The best time to buy is when others are selling, not when everyone else is buying too. U.S. Air's impressive revenue numbers looked very attractive in 1989, so Buffett bought preferred shares. Bad news for Buffett, those revenues came with a hidden cost. Airlines need constant capital to grow, buying new planes and expanding routes, leaving little for shareholders. By the time the airline achieved meaningful profits, debt payments ate up most of the returns. The company couldn't even pay dividends on Buffett's preferred stock. He got lucky selling at a profit later, but knew it was pure chance. This taught him to distinguish between real growth and expensive growth. As Buffett said, 'Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.' Some businesses need to spend huge amounts just to increase sales, leaving shareholders with nothing. The lesson is: If it looks too good to be true, it just might be. What makes Buffett extraordinary isn't his perfect track record, it's his willingness to admit errors publicly and extract valuable lessons from them. Each mistake became a teaching moment that improved his future decisions. His Google miss made him more open to technology investments, eventually leading to major positions in Apple. His ConocoPhillips overpayment reinforced his discipline about buying only at attractive prices. His Dexter Shoes loss sharpened his focus on truly durable competitive advantages. The real wisdom isn't avoiding all mistakes. Unfortunately, that's impossible. It's learning from failures quickly and adjusting your approach. Buffett's biggest errors became steppingstones to better investing, not permanent setbacks. For the rest of us, it's a lesson in endurance. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Used Cars That Will Last Longer Than an Average New Vehicle 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on Warren Buffett's Top 7 Money Mistakes (And What He Learned From Them) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
