Avoid the Horror Show of Investing Tropes

Nothing about saving and investing is easy, but it doesn’t have to be a horror show, either! One of the definition of “trope” is “a common or overused theme or device.” In movies, tropes are often associated with horror movie clichés, such as the prey constantly falling while being chased.

In finance, we’ve previously covered myths that won’t die. Today, we’re going to look at investor missteps to avoid. Along the way, we’ll have some fun with horror movie clichés that can be analogous to your biggest fears as an investor. I hope the suspense isn’t killing you!

Horror Movie Trope: The car never starts.

Our plucky heroine has temporarily escaped, and now she heads for her trusty steel friend, only to find that the battery has picked this moment to die—and she may be next!

Financial Horror to Avoid: Picking the wrong vehicle.

For better or worse, saving and investing offers lots of ways to get to your goal. You have the option to consider an annuity, life insurance products, individual retirement accounts, a college savings plans, or a simple investments in corporate bonds. Each of those vehicles has advantages and disadvantages. Make sure the vehicle you choose will get you were you want to go.

Horror Movie Trope: The killer who just won’t die.

Sure, that bullet seems to have stopped Freddy/Jason/Michael Myers/Ghostface. But this movie goes on for another 40 minutes! Don’t look away, victims. Our slashers disappear all too easily. And they’ll be back. You may not know where or when, but they’ll be back!

Financial Horror to Avoid: No contingency fund.

If you had a contingency fund, you’d be much less likely to tap into your retirement savings to cover the cost of that “unexpected” expense. But, you might argue, it’s an unexpected expense! How can you expect it? Fair point. Perhaps you can’t predict the exact nature or amount of the expense. But you must know that unplanned costs will arise. Be ready for them. Or they will come back to haunt you!

Horror Movie Trope: There will be a sequel!

Sure, the masked slasher seems finished off for this movie’s satisfying conclusion, but if there’s another dollar to be wrung out of the franchise, you can be sure that our slasher will return for many more installments.

Financial Horror to Avoid: Paying fees over and over again.

Speaking of horror, have you seen this glorious John Oliver takedown of the financial services industry? If not, you owe it to yourself. I’ll tackle some of Oliver’s criticism in a future column, but for now, pay close attention to his salient points about the insidious nature of the fees you pay for certain funds and to certain advisors. They can be a fatal blow to your savings strategy!