Despite what many people think, the number one financial dream killer isn't portfolio losses, or financial emergencies, or unemployment, and not even natural disasters. The number one reason people fail to reach their financial goals is procrastination - putting off the inevitable until the cost of your dreams or goals become prohibitively expensive.
Why People Procrastinate
You have probably heard about the old 70 percent rule that suggests retirees will need the equivalent of about 70 percent of their current income level to maintain their lifestyle in retirement. This assumes that retirement living costs will be 30 percent less during working years. While it may have been applied appropriately for retirees two or three decades ago, it is fraught with significant risk and potential disaster for today's retirees.
The penny finally dropped a couple of months ago during a client conversation about the risk of investing in the equity markets. The client was reluctant to commit money to the investment markets and gave me several reasons - "the markets were too high and ready to crash", "there were safer alternatives", "I never fully recovered my money from the 2008 Credit Crisis" - to justify his point of view.
