Plan Your Prosperity: The Only Retirement Guide You'll Ever Need, Starting Now--Whether You're 22, 52 or 82

How Much Do You Have?

Do you know how much money you have?

Seems like a silly question. But, like the question of income, often folks don’t have a great handle on what their true net worth is—liquid or otherwise. It’s hard to make good projections about the future if you don’t even know your starting point.

Can you rattle off how much you’ve got stashed? Part of the reason many investors don’t have a good handle is they often have multiple accounts. They have IRAs in a few places, a couple of 401(k)s left with old employers, a savings account here, a brokerage account there. Then their spouse has a mélange of accounts.

That’s one issue. Another is, with so many accounts, folks often don’t know how their portfolios are allocated. They may inadvertently be heavy into one security or category and never know because it’s sprinkled over 12 accounts, exposing them to heightened risk—without even knowing it.

If you’re the type who carefully logs account balances and positions every month, first, that may not be necessary. Checking in on account balances too often can lead to some cognitive errors. Are you obsessing over your account values this month over last? And is that causing angst? And is that angst making you want to make changes? Check your account values and know how your accounts are allocated. But folks who hit refresh on their online brokerage statement screens 3, 4, 10, 27 times a day are likely being too myopic. And myopia can cause costly errors—like buying high and selling ...