The best financial adviser is closer to home than you think

When deciding where to invest your money, it can be hard to know who to listen to. Financial advisers are usually valuable, but if you’re looking for an investing genius to set you on the right path, you may want to look closer to home.

If anyone knows how to budget, plan ahead and get the most out of every dollar, it’s probably your mother. Think about it. In running the household, mums have mastered the principles of investing you’ll need to achieve financial success: doing thorough research, setting goals and sticking to them, and being patient.

Why pay for financial advice when mum may have the answers for free? You might have ignored your mother’s advice most of the time when growing up, but she had some pearls of wisdom to share if you were willing to listen. Here are some golden nuggets from mum to set you on the right investment path.

Beware of FOMO
Learning to ignore ‘the fear of missing out’, or FOMO, was probably one of the first and most important financial lessons your mum taught you. Whether it was a yo-yo, a Tamagotchi or football cards, kids have always wanted the latest craze.

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But more often than not, mum didn’t give in to your whining and pleading. Because mum knows better than that. Following that mindset every time will only lead to you chasing the next big thing. This is especially true when it comes to investing.

Chasing the latest skyrocketing stock because you see other people making money is one of the fastest ways to lose it all, says wealth manager Shari Greco Reiches.

“Watching others make a lot of money on a certain stock or token having a massive rally may make you feel obligated to join in and get in on the gains, even if the logical part of your brain is telling you that the biggest rewards have already been had.”

Always have a plan
Sometimes it feels as if our mums are five steps ahead. Getting the kids up and ready every day and usually herself to work as well requires forward thinking and pre-planning. Even her refusal to give in to your every demand was part of her plan – a plan to turn you into a person with manners.

Read: Why the robo-advice industry is taking off in Australia

Investing without a plan can also lead to unwanted outcomes. Setting goals, and more importantly sticking to them, can make the difference between retiring early and not retiring at all.

“A well thought-out investment plan will set goals and provide a roadmap for investors to get there while also protecting them from falling into some common behavioural traps that can be detrimental to their returns,” says Robin Bowerman, head of market strategy and corporate affairs at Vanguard Australia.

For example, without a plan, investors may be more inclined to try to time the market to chase overall returns or overreact when markets swoon, rather than invest with their personal, long-term goals in mind.

Make a shopping list
Mum never did the weekly shop without a list. That would be inefficient and could lead to forgetting things she needed. Every week at the supermarket she would see the rise and fall of individual items on the list, and could adjust what she bought if prices went too high or there was a sale.

Read: Why ETFs are the ideal retirement investment option

You need to make a similar list when it comes to investing, especially in the stock market.

“Creating your watch list of stocks can allow your brokerage firm to notify you if there was an increase or decrease in the price of an asset so that you can move accordingly,” the Motley Fool writes.

“Most importantly, keeping a list of what you want and tracking the stock activity of a few stocks can help you to be more efficient in the markets.”

What other investment lessons can we learn from our mums? Do you have any investment tips to share? Let us know in the comments section below.

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Written by Brad Lockyer