The 5 Worst Money Mistakes of Millionaires
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The Fiscal Times
June 3, 2014

They have more money than most Americans, but millionaires make the same investment mistakes that a lot of others do – including failing to diversify their portfolios - though the costs can be greater to them.

We’ve all heard that portfolio diversification is a key tool to manage risk and that having a specific investment plan is one of the most basic investment rules we should follow. Yet we rarely do these things.

Related: The Surprising Way Millionaires Spend Their Money

The same is true of millionaires.

DeVere Group, a global financial consulting firm, surveyed 880 high net worth clients with more than $1 million in investable assets, asking them to disclose their number one investing mistake before seeking professional financial advice.

Here are the five top investment mistakes the millionaires revealed – and why they should have known better:

1-      Failing to adequately diversify a portfolio: Spreading money around is vital to curb risk.

2-      Investing without a plan: Unless you have a sound plan, you’re gambling, not investing.

3-      Making emotional decisions: It’s far better to stay calm, cool and steady when making financial decisions.

4-      Failing to regularly review a portfolio: Even the best portfolios can go off-target over time.

5-      Focusing too much on historical returns: Past returns have little bearing on the current environment.

“Investing mistakes can and do occur. It is how they are best avoided, or at least mitigated, that is the key to success,” said Nigel Green, deVere’s founder and chief executive, in a statement. The survey respondents were based in the U.S., the U.K., South Africa, Hong Kong, Japan, the United Arab Emirates, Indonesia and Thailand.

Related: Get Used to It: The Rich Do Get Richer

Whether you’re a millionaire or not, you can learn lessons from all of this – or hire a financial advisor.

“Avoiding just one of these mistakes can literally make the difference between poverty and financial freedom,” concluded Green.

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Marine Cole has been covering finance and business for a decade and has written for publications that include The Wall Street Journal, Crain's New York Business, and AdvertisingAge.