The Top 10 Ten Investing Mistakes We All Make | Cody Garrett | Ep 535

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Feb 24, 2025

Join Cody Garrett, an expert in investing and financial planning, as he dives into the costly mistakes even seasoned investors make. Cody emphasizes mastering asset location for tax efficiency, helping listeners understand the optimal placement of investments. He also discusses the importance of active management in retirement contributions and the benefits of donating appreciated securities. Additionally, he highlights the significance of intentional giving and proactive financial planning to secure wealth for future generations. Tune in for valuable insights!

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ADVICE

Asset Location

Consider asset location, not just allocation, when investing.
Choose investments based on account type (taxable, tax-advantaged) for tax efficiency.

ADVICE

Invest and Reinvest

Invest contributions immediately and enable automatic reinvestment of dividends.
Check for cash equivalents (tickers ending in XX) to ensure funds are fully invested.

ADVICE

Return on Hassle

Evaluate the return on hassle (ROH) before chasing small gains.
Sometimes higher yields aren't worth the time and mental energy.

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Brad and Cody Garrett from Measure Twice Money dive into the ten most common mistakes that even savvy investors make. They cover essential topics from asset location to maximizing health savings accounts (HSAs), emphasizing a holistic approach to financial wellness.

Key Takeaways:

Understanding the impact of asset location on tax liabilities.
Importance of auto reinvestment for maximizing investment growth.
Weighing the hassle versus savings in financial decision-making.
Strategies for maximizing charitable contributions tax-efficiently.
The significance of holistic wellness in financial planning.

Timestamps & Key Points:

00:01:50 Asset Location
- Understanding asset location and its effect on tax liabilities.
- Choosing the right types of investments for taxable vs. tax-advantaged accounts.
00:15:46 Investing Contributions
- Importance of logging into your accounts to avoid cash sitting uninvested.
- Enable auto reinvestment of dividends and capital gains distributions.
00:20:29 Return on Hassle
- Evaluate whether the savings from switching accounts justify the hassle involved.
00:24:14 Charitable Giving
- Donate appreciated securities rather than cash to avoid capital gains tax.
- Utilize donor advised funds for strategic charitable giving.
00:33:01 Family Giving
- Discuss the timing of financial support for adult children, focusing on "oops money" vs. "ooh money."
00:39:23 Maximizing HSA Contributions
- Ensure contributions match the latest limits; check both individual and employer contributions.
00:41:38 Understanding IRMAA
- Awareness of IRMAA’s impact on Medicare premiums and its effects in retirement.
00:43:02 Early Retirement Concerns
- Don’t let health insurance costs dictate retirement timing; explore ACA options.
00:47:25 Retirement Order of Operations
- Develop a strategy for tax-optimized withdrawal from investment accounts.
00:52:25 Holistic Wellness
- Balance financial planning with mental health, relationships, and physical wellness.

Action Items:

Review asset location to minimize tax liabilities. (Timestamp: 00:01:50)
Enable auto reinvestment for dividends in your brokerage account. (Timestamp: 00:17:57)
Consider the hassle vs. savings when chasing high-yield accounts. (Timestamp: 00:20:29)
Maximize HSA contributions according to the current limits. (Timestamp: 00:39:20)
Explore charitable donations via appreciated securities instead of cash. (Timestamp: 00:25:27)

Related Resources:

Measure Twice Money: measuretwicemoney.com/ChooseFI (Resources related to financial planning)
Advice Only Network: adviceonlynetwork.com (Find fee-only financial advisors)
Nectarine: hellonectarine.com (Affordable financial advice)