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you need the newest, latest thing you saw advertised on TV, write it down. Then wait a few days and ask yourself if you still “need” it. Chances are, your “needs” are actually “wants.” In just a few days’ time, you may decide you don’t even want it anymore.

Invest Putting all the money you are saving into your savings account at the bank may sound like a great idea, but over time you may not be doing yourself any good. Quite simply, although savings accounts are interest- bearing and aren’t tied to the stock market and its fluctuations, the inter- est that you earn on your account won’t keep up with inflation over the long run. I base the inflation projections for each financial plan I do on the national average and forecast, as well as on what time frame I’m looking at. Traditional savings accounts don’t earn enough interest to keep up with inflation. Plus, if you begin to take out income from your savings account on a regular basis, you will find that you deplete your account much faster once inflation is figured in. The only way to make your money work as hard for you as you did for it is to invest it.

The same is true for Certificates of Deposit (CDs) and money market funds. During a down market, the interest rates on bank CDs and money markets may look attractive, but they may not help you. The best time to invest money is during a down market. Buying low and selling high is the tenet of good investing. However, this goes against human nature.

Think about it, would you rather buy a car for $12,000 or $10,000? How about a gallon of milk for $2.49 or for $3.49? Easy, right? You would rather buy the car and the milk at the lower price. (See Figure 3.1.) Why, then, do people insist upon buying stocks and mutual funds at their high point? They do this because cause of fear—fear of mak- ing the wrong decision. People believe that if everyone else is buying the stock, then they should get on the bus, too. However, it’s often those who wait who get burned in their investments. By waiting to see who else has purchased that new, hot stock, it’s usually past the point where you make money. Therefore, when the stock starts to go down, the first people who lose their money are the ones who were the last to jump on the bandwagon! Don’t be afraid to make a wrong decision about

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