Here Are My Top 5 Biggest Financial Planning Mistakes People Make


By David W. Hoffmann, CFP®, AIF®


In my nearly 20 years in the financial services industry, I have seen even the most experienced investors and savers make some critical mistakes. On the investment side of our business, no one can be right all the time due to outside factors that are out of your control.

That is why I make sure to focus with clients on areas that are within in their control. For this reason, our firm makes financial planning a key component of our client service model. The following are five of the more common mistakes we uncover with prospective clients.


  1. Lack of planning - Most people should invest based on their financial goals and not to try to beat the stock market.  A comprehensive financial plan can help you to come up with a target rate of return and appropriate risk level to help you meet your goals. Planning allows you to create specific goals for what you want to achieve and when you want to achieve it.

  2. Failure to review your plan - You should review your plan at least once a year and/or when major life changes occur. These major changes may include an inheritance, house purchase, new job, marriage, divorce, or other event that may change your financial goals.  Planning should not be a one-time exercise but rather an ongoing one that is updated regularly.

  3. Failure to manage debt properly - Don't let debt control your life.  To avoid lingering debt and credit problems, plan to pay it off as quickly as you can, focusing on high interest rate debt first in most cases. The benefits to paying off debt are extensive. You will free up more income, improve your credit score, allow for earlier retirement and most of all, relieve the stress associated with carrying large amounts of debt.

  4. Failure to manage risk and your estate - If you do not put in place the proper property & casualty, life, disability, and/or long-term care insurance, all of the saving you have done could be wiped out very quickly.  Furthermore, if you do not have up-to-date wills, POAs and living wills, all of your hard work and worthy intentions could be subjected to the negative effects of probate, inheritance and/or estate taxes, or even unforeseen family conflicts.

  5. Starting too late - Albert Einstein said, "Compound interest is the eighth wonder of the world.  He who understands it, earns it...he who doesn't...pays it." Let compounding work for you over time. Compounding can create a snowball effect, as the original investments plus the income earned from those investments grow together.  


For example: If you saved $500 a month for 10 years and never invested it or earned any interest on it, you'd have $60,000 after 10 years. But if you invested $500 a month for 10 years and earned 8% each year on your investment, you would end up with about $91,500. In other words, you'd have 50% more money!  The earlier you start the better when it comes to compounding. Compounding really works hardest for you in the later years.


Paying attention to some basic financial planning principles such as those I have outlined here could allow you to retire more comfortably.


To summarize, taking care of financial issues that you can control helps you see the big picture and set long and short-term life goals. Some basic financial planning techniques can make it easier to stay on track to meet your life goals. In addition, you may want to consider working with a CERTIFIED FINANCIAL PLANNER™ (CFP®) who is educated in these areas to provide further guidance and peace of mind.  Many financial advisors call themselves financial planners, but they may not be looking at the whole picture for you


Thanks for reading!





David Hoffmann is a Senior Financial Advisor at DBR & Co. Wealth Partners, a Pittsburgh-based wealth management firm.


If you would like to contact the author, David Hoffmann, please e-mail him at or call 412-227-2800.



This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author.  D. B. Root does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources.  Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements.  As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.


Share on Facebook
Share on Twitter
Please reload

Subscribe to our monthly Big Picture Financial Planning newsletter


Please reload

Where to find us:



436 Seventh Avenue, Suite 2800

Pittsburgh, PA 15219-1818


Phone: 412.227.2800

Toll Free: 888.227.0913

Fax: 412.227.2805



811 Madison Ave, 7th Floor

Toledo, OH 43604


Phone: 419.574.9399

Toll Free: 888.227.0913

Fax: 419.574.9356

  • White LinkedIn Icon
  • White Facebook Icon
  • White Twitter Icon
  • YouTube - White Circle

© 2020 DBR & CO

This communication is strictly intended for individuals residing in the states of AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.

Important Consumer Disclosure: D.B. Root & Company, LLC (“DBR & CO”) is an SEC registered investment adviser located in Pittsburgh, Pennsylvania. DBR & CO and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC-registered investment advisors by those states in which D.B. Root & Company maintains clients. DBR & CO may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. DBR & CO’s web site is limited to the dissemination of general information regarding its investment advisory services to United States residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of DBR & CO’s web site on the Internet should not be construed by any consumer and/or prospective client as DBR & CO’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Furthermore, the information resulting from the use of tools or other information on this Internet site should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from DBR & CO. Any subsequent, direct communication by DBR & CO with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of DBR & CO, please contact the United States Securities and Exchange Commission on their web site at A copy of DBR & CO’s current written disclosure statement discussing DBR & CO’s business operations, services, and fees is available from DBR & CO upon written request. DBR & CO does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DBR & CO’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.

Advisory HQ’s Top Ten advisors’ rankings are based on methodologies used by established financial news organizations and are highly focused on three pillars: total assets under management (AUM), firm size/quality, and the amount of revenue generated by an advisory firm. AdvisoryHQ’s Advisor Selection Methodology is based on a wide range of filters including fiduciary duty, independence, transparency, level of customized service, history of innovation, fee structure, quality of services provided, team excellence, and wealth of experience. The review and ranking articles are always 100% independently researched and written without the ranked Firms knowing they are being reviewed.

Certain supervised persons of DBR & CO, in their individual capacities, as registered representatives of a broker-dealer, may provide securities brokerage services and implement securities transactions under a separate commission based arrangement and may be entitled to a portion of the brokerage commissions paid to the brokerage firm, as well as a share of any ongoing distribution or service (trail) fees from the sale of mutual funds. 


A number of DBR & CO’s Supervised Persons are also licensed insurance agents and may offer certain insurance products on a fully-disclosed commissionable basis.  A conflict of interest exists to the extent that DBR & CO recommends the purchase of insurance products where its Supervised Persons may be entitled to insurance commissions or other additional compensation.