Previously, I wrote about three investing mistakes that hurt investors' ability to make serious returns. Unfortunately, there are others that can hinder or ruin your plans for financial freedom and retirement wealth if they aren't tackled now.
Not saving enough to really drive investment gains
They always say, "pay yourself first", when it comes to saving and budgeting. However, anyone trying to save 10% of their take-home pay probably has figured out that may not be sufficient. Not having enough to save, much less to invest with could cut down your ability to generate bigger total dollar returns.
Go through each household expense – even the "fixed" ones like electricity and other utilities – and squeeze every drop of savings from them.
Every little bit that you can save is a bonus, so don't give up. That's why investing in good, stable dividend stocks gives you a snowballing effect in income over time. From little things, big things grow.
Not using superannuation plans fully or supplementing retirement income
Pretty much everyone employed has some kind of super and a portion of each pay cheque goes into it. Hopefully it will have good returns many years from now.
Making extra contributions is one way to add to your super. There are even super plans that allow you to purchase certain shares from within the super. You keep control of what you are investing in and enjoy the super tax benefits added to your gains.
You can also supplement your super with annuities. They are a guarantee to pay a certain amount over time in the future for a lump sum you pay today. If you're lucky enough to live a long, wonderful life, you could also possibly outlive your later super income, so annuities can fill that gap. Two S&P ASX 200 Index (ASX: ^XJO) companies, Challenger Limited (ASX: CGF) and IOOF Holdings Limited (ASX: IFL) offer these products, but you can invest in these strong income stocks as well and grow you money through their dividends and gains.
Set yourself for success by avoiding these classic mistakes. Also, here is one more income stock that also could generate pleasing returns for you over the next decades.
— Coca-Cola Amatil Ltd (ASX: CCL)
The bottler and distributor of the world's most famous soft drink in Australia and four neighbouring countries is a big favourite among value investors because of the long-term growth potential. However, it could be more of a buy now as it restructures itself to cut costs and improve the business. Foolishly patient investors can take advantage of the current short-term setback and top up their holdings.
