When it comes to matters of personal finance, it is easy to make choices based on what is best for the present while ignoring the future repercussions. This is the most common mistake people make with investments and borrowing, and it can lead to devastating financial consequences.
One of the clearest examples of this is the single percentage point. Most people think of that single percentage point as not making much difference, but over the course of 30 years a single percentage point can yield significant financial gains or losses. These seemingly minor details are incredibly important in personal finance, and people need to be much more cautious in the manner in which they make decisions, especially as they relate to the future. Just ask Adam Kutner, an experienced financial analyst who has been watching investments grow for 50 years.
Furthermore, diversification is the key to ensuring the long-term growth of an investment. There is nothing wrong with taking calculated risks with personal finance, but those risky investments should never be a “make-or-break” proposition. Proper risk diversification will prevent losses that are too great to overcome and will ensure that personal investments experience consistent growth over time.