#RichLifeLawyer Show 004: Five Financial Planning Mistakes You Are Making

If you are like most of the people I know you probably haven’t spent a ton of time thinking about financial planning. And because of that you are making these financial planning mistakes.

Sure, you have thought about retirement and paid slight attention when the 401K rep comes into your office to talk about their plans, and you may have a financial planner that is helping you manage some of your extra cash.

But have you really thought about how your money is working for you?

Have you really taken the time to create a plan of action so you can accomplish your goal?

Here’s the funny thing: even if you have thought long and hard about your financial future, you are probably making one of these five common financial planning mistakes.

Why Does an Estate Planning Lawyer Care about Financial Planning?

After all, aren’t we just concerned with helping you get your stuff to the place you want it to go?


I want my clients to get rich. I want my clients to live a rich life. I want my clients, when they come into our family, to significantly increase their wealth.

I care about you, that’s why I’m sharing this information with you.

Top Five Financial Planning Mistakes You are Making

Here’s the deal: I’m going to give you the five mistakes right now, and if you want to learn more about them, just watch the video above.

  1. Choosing risky investments because you are “young”;
  2. Missing the forest for the trees;
  3. Over-insure the wrong thing/underinsure the important things;
  4. Foggy or non-existent goals; and
  5. No estate plan.

Please watch the show. If even one thing I say helps you it could be a multiple-thousand dollar change!

Question of the day: Which of the mistakes are you making, and what are you going to do to overcome them?


Christopher Small

P.S. Do you have kids? Have you completed guardianship paperwork? Have you done it correctly? Click here to find out what happens if you don’t do anything: Are you okay with a judge choosing the guardians of your children?

P.P.S. Do you own a business? Do you have a plan so the business, and your family, can survive if something happens to you? If not, click here to learn how simple it is to protect your business and your family from tragedy: 5 Ways to Protect Your Business from Catastrophic Failure.

P.P.P.S. Do you have no kids and think you don’t need an estate plan? Single and think a will is only for married couples. You couldn’t be more wrong. Click here to learn more: 5 reasons estate planning is a must have even if you don’t have kids.

Christopher Small is a Kirkland estate planning attorney who helps people get rich and live forever. He is also the owner of CMS Law Firm LLC.

#RichLifeLawyer Show 004 Transcript

Hey everybody, welcome to episode 4 of The Rich Life Lawyer Show! I am Christopher Small, your host, as always, and I’m here, I’m excited to talk to you about today’s topic: Top five financial planning mistakes that you are making.

Hopefully I’m not harping too much on mistakes all the time and down things all the time, right?

But you know these things really here, with these lessons and the things I’ve been talking about in the past, you can change these things by making some very small moves with your life, with your finances, with the way that you approach money.

That’s what I want to talk about because it’s so easy for you to retire wealthy. To generate wealth now. To protect your family now. So easy to do all these things, but you know we put it off we don’t want to think about it or we’re uncomfortable or we don’t want people to know that our financial situation isn’t exactly what we put out there sometimes.

I can tell you I’m digressing a little bit before we get into the, to what we’re talking about today, the topic. But you know the first time I ever went to a financial planner I was nervous because I knew what we were going to talk about money but I was afraid that I was going be exposed to as unsuccessful.

I was afraid that this person who knows a lot about money and who knows a lot about generating wealth, I was nervous that they were going to judge me and my lack of financial status. And not only did that not happen but I learned a lot.

I put together a plan to move forward, to exponentially increase the amount of wealth that I was generating and creating for my family and it was a great experience.

I figured like maybe you and I can have a conversation right now and that will help you to take the next step which is to actually go out there and get organized and do these things because it makes a huge difference for you, your family, for your grand kids, for your great grand kids.

You know that’s what the Rich Life Lawyer, that’s we’re all about, you know. It’s creating generational wealth, it’s protecting families, right? Those are two main focuses that’s what we do really really well.

Alright so let’s talk about these five ways, five mistakes that you’re making when it comes to financial planning. And one of these I actually learned by talking to my financial planner.

You know, I never thought about, I guess I’d never done research on or really done the math on it but the first thing is the idea that you should be riskier with your investments the younger that you are. And the reason that it doesn’t really make much sense when you think about it or when you sort of wrap the numbers around it is that with risky investments, yes, you have higher highs but you also have lower lows, you know.

And people, I think at least when I did this because I’ve fallen to this boat, I would always choose riskiest to mess with. You know like “Hey I’m young, I can recover.” That’s what I always think of, that there’s a dip I can recover but if it goes way up I wanna be a part of that, you know.

I want to be on that rocket ship. And if you look at the math though, what really wins the race if you start early is to get that steady growth. You know, if you could a percent growth on your investments every year forever and you started investing when you are 25 or 35 or 45 you can generate significant wealth.

If you are going up or you have ten percent year, one year and a two percent, one year, and a ten percent and a two percent, even though the average is out to what, six percent? The math doesn’t work the same because your money is not working as hard for you some years as it should be. So that’s number one.

And you know, you don’t have to take the boring route. You don’t have to go all the way to conservative, but just consider avoiding or at least talk to your financial planner about avoiding the most risky investment strategies that are out there, alright? That’s the first thing.

Number two, so this is, I’ve read this and seen this a whole bunch of different times but the second sort of financial planning mistake that you are making is you know, cutting out, trying to cut out a lot of small things to save just a little bit of money.

So for example, Starbucks. If you want to have a latte everyday, I’m here to tell you go have that latte, okay? It’s like four bucks a day. What you want to avoid though is going out and spending two or three hundred dollars on a dinner every week.

Think about that. I’ve read somewhere I can’t remember where but one of the secrets of the rich is that they enjoy their latte but they avoid going out to dinner bunch of times because that’s just wasted money, you know, and obviously we’re doing that different levels of wealth and things like that but you know, consider allowing yourself to have those little daily enjoyments and forgo the sort of middle ground things that eat up a lot of your cash but don’t really provide you a ton of value.

And if you’re a foody, then maybe it’s something else that you could cut out, right? So, that’s the second thing.

Number three, the third way that we mess up our financial planning is that we over-insure things that aren’t important and we under-insure the things that are important.

What I mean by that is, you know, we have a lot of insurance for our car, we have a lot of insurance for our house, we have a lot of insurance for, you know, our possessions but very few of us here have life insurance and have disability insurance which are two of the most important types of insurance that you want to have. Because those carry the biggest risk.

Those cover the catastrophic events, we don’t insure those enough but we over-insure these little minor things that typically will happen. Car insurance for example, right? The chance that you’re gonna be in very serious car accident is relatively small yet what we insure for are the dings, right? Or the little dings or you know you make your deductible really low and your insurance really low.

With car insurance we take a minimum car insurance that you can to cover basically you’re just covering a scratch where if you get in a very serious accident, you’re not going to be covered. You’re not going to be taken care of.

Same goes for life insurance and disability insurance. Those are the things that want to cover, those catastrophic events so that you can protect yourself, protect your family. That’s what this is all about.

That’s what insurance is really about, right? Protecting risk. If you are not protecting those catastrophic events, you’re missing out.

The fourth thing is not being clear on goals. And we talked about this in the last video but you know, not being clear on goals is critical for financial planning. You can’t get where you want to go if you don’t know where you want to go.

And I have talked about this a little bit so I won’t harp on it again and again and again but think about what your dream life is like and about what your dream scenario is like and get out there and make that happen, alright?

And then last but not least is not having an estate plan. Not having an estate plan matters for a whole bunch of different reasons and you know, with us, we’re a little bit different in the way that we approach estate plans and that is not just about moving your things around to different people, it’s about legacy creation, it’s about wealth generation.

We’re really thinking about how you can maximize what you’ve done with your life and pass that down to generations. You know, down the road.

Think about the lessons that you’ve learned, the life lessons that you’ve learned, the things that you want to tell your kids and your grandkids at the those big moments in your life.

If you think about it for example, you know I don’t know how old you are right now but let’s you’re like, you’re sixty and you’ve retired, and you have your kids in their 30’s.

Think about the advice that you want to give your kids about how to live life once they retire or about what retirement is really like. You know, you could leave them that information if you plan for it and that’s what estate planning can do for you.

You can also avoid giving away a significant portion of your wealth to the man, to the government. If you’re in Washington state, at the time of this recording at least, if your net worth is over 2 million dollars, there’s a 19% tax on everything that’s over that.

If your estate is worth over 5.4 million dollars right now, then you’re paying a 40% tax on that to the federal government. Those are significant numbers that can basically just cut out, wipe out all the work that you’ve done over the course of your life for your family.

Estate planning can help you avoid those kind of penalties.

You can also avoid heartache when it comes to choosing guardians for your children. And taking care of your children and you know, avoiding fights, avoiding all of the conflict that can occur if you don’t take the time to just plan out what you want to do.

That’s the fifth thing and you know, obviously, I don’t like to plug but if you need help with that, call us because we can do that for you and we’re good. Really good.

So that’s it, those are the five financial planning mistakes that people make that can be changed around relatively quickly, right?

The question of the day, you know what should the question of the day be. You know, I guess which one of those mistakes do you think that you’re making and tell what you’re gonna do to change it.

I’d love to hear from you. So, if you have questions, we’ve got answers or I’ve got answers, @richlifelawyer on Twitter, facebook.com/richlifelawyer, just use the hashtag #richlifelawyershow and I’ll answer your questions. So, can’t wait to talk to you next time, see ya!