I’m a Finance Expert: 4 Investing Mistakes My Millionaire Clients Regret Making

January 2, 2025

According to a Capgemini study this year, the number of millionaires in America grew by 500,000 to 7.43 million in 2023, as reported by CNBC. Their combined fortunes reached $26.1 trillion, an increase of 7% from 2022. While these millionaires have likely made plenty of wise decisions, they’ve also made their fair share of investing blunders.

If you want to build wealth, you’ll want to learn from the mistakes of others so that you don’t repeat the same ones.

Check Out: I’m a Financial Advisor: 4 Investing Rules My Millionaire Clients Never Break

Here are four investing mistakes made by millionaire clients of two finance experts.

Also see two investing mistakes wealthy millennials are making.

“Many millionaires fall into the trap of believing they can time the market,” said Tyler Meyer, CFP, founder of Retire to Abundance. “Whether it stems from previous successes where high-risk bets paid off or the assumption that timing is the key to ongoing growth, this approach often backfires.”

Waiting for the ideal time to invest or allocate funds toward a specific asset can be extremely challenging. While one can get lucky with their timing when investing, you don’t want to consistently rely on trying to time when you buy and sell, as many unpredictable factors are involved.

As time has shown, trying to predict market movements is almost impossible, and it could lead to missed opportunities for the majority of investors. Anyone who has invested money understands that there are certain assumed risks. While we all want to see our funds grow, mistakes will happen in the investing journey as we attempt to maximize returns.

This is one mistake that millionaires often regret because nobody has a crystal ball into the future.

Consider This: Suze Orman: 3 Biggest Mistakes You Can Make as an Investor

Millionaire clients can sometimes forget they have access to professional advice that will guide them when dealing with a stressful situation. “One advantage of reaching a certain level of wealth is the ability to afford services that were once out of reach, including professional financial advice,” Meyer said.

These clients can also sometimes feel like they don’t need professional advice because they’ve experienced a certain degree of success on their own. It’s worth pointing out that just because someone makes money in one venture doesn’t mean they’re qualified for every other financial topic. For example, a financial professional can help you figure out how to invest your profits, optimize your tax planning and build a profitable portfolio. This can be especially helpful if you’ve built wealth through real estate or another strategy outside of the stock market.

“A skilled advisor can help you avoid many common pitfalls and provide strategies tailored to your unique situation. While no advisor is perfect, their experience with similar clients equips them to steer you clear of costly mistakes,” Meyer said.

By investing in professional advice, you can preserve more of your wealth and feel confident in knowing that you’re making wise financial moves for your future.

“For many millionaires, wealth is often concentrated in a single source, such as a business they own or stock options from their employer,” Meyer said. “While these investments may have been instrumental in building their wealth, relying too heavily on one asset introduces significant risk.”

Diversifying your investments can help mitigate potential losses and offer you a more balanced portfolio. Sometimes, a millionaire will build wealth through one asset class initially, and then they feel that this is the best way to continue investing moving forward. However, as one’s wealth builds, spreading the risks and looking into different investing options becomes more important.

“Though diversification may not always be straightforward, taking steps to spread risk early on can prevent substantial financial setbacks,” Meyer explained.

“Millionaires often make costly investing mistakes by overlooking tax-smart strategies,” said Rachel Richards, CPA, head of product at Gelt. This is often a regret for millionaire clients because they’re in for a surprise when the tax bill comes due from investments that have done well. By not optimizing tax-wise strategies, millionaires could leave significant amounts of money on the table and spend more on taxes than they planned.

According to Richards, one of the main regrets in this category is neglecting to sell underperforming investments before year-end, forfeiting opportunities to offset capital gains taxes. Many millionaires also regret missing opportunities to leverage charitable giving and estate planning tools to provide immediate tax benefits and support long-term wealth preservation.

“These missteps highlight the importance of aligning proactive tax planning with investment decisions to optimize your wealth,” Richards said.

If you’ve done well with your money, you’ll want to ensure that you have the right professionals working for you to help you make wise decisions about your long-term financial future.

More From GOBankingRates