Investment Mistakes

Avoiding Investment Pitfalls: Lessons from a Real-Life Case Study

Investing, an integral part of financial management, is often laden with uncertainties and potential risks. Regrettably, many HNWIs and expats inadvertently stumble upon investment pitfalls that could lead to significant financial repercussions in the long run. This case study unravels the story of two expats, Karel and Myriam, spotlighting common investment errors that are frequently overlooked. By gaining insights into these blunders and their possible implications, you can make informed financial decisions and steer clear of similar pitfalls.

The Compounding Effect of Delay

If there’s one thing that’s crucial in the realm of investing, it’s time. The compounding effect can be either an ally or a foe, depending on the actions taken. Karel and Myriam, a couple hailing from Belgium, found themselves at a crossroads regarding their significant cash holdings. Despite having a combined annual income of €1,000,000 and roughly €5 million in investable assets lying idle in their bank, they were confronted with a critical decision.

Karel, a partner at a professional services firm, and Myriam, a doting mother to two young children, were adept at making financial decisions. Coming from modest backgrounds, they were aware of their subconscious money scripts and had a clear vision for their future. Their aim was to retire in their 50s and maximise their wealth accumulation window before moving on to the next phase of their lives.

The Perils of Inaction and Drift

During their initial interaction with us, Karel and Myriam expressed their concerns, objectives, and dreams. They were keen to explore the potential benefits of investing their cash. However, as the conversation progressed, we highlighted the hazards of inaction and drift. These two elements often lead to missed opportunities and long-term regret.

Inaction and drift manifest as indecisiveness, resistance to change, and a bias towards maintaining the status quo. The fear of making the wrong investment decision or incorrectly timing the market can immobilise individuals, preventing them from taking action. This paralysis can lead to a downward drift, significantly impacting their future financial well-being.

The Power of Time and Discipline

Time is a potent force in investing. It has the capacity to compound returns and substantially impact the growth of investments. We highlighted that astute decision-making, coupled with discipline and patience, consistently yields positive outcomes. However, the actual cost of delay remained unaddressed.

Piecing Together Karel and Myriam’s Profile

Karel and Myriam took their time to assess their financial situation in detail, contemplating various scenarios. They shared their aspirations, concerns, and financial goals with us, enabling the creation of a comprehensive life strategy. This strategy included cash flow models that exhibited the potential outcomes of investing their cash versus leaving it idle. By analysing different retirement ages, property purchases, inflation, university fees, and caring for elderly parents, we were able to provide Karel and Myriam with a clear understanding of the impact their decisions would have on their future. This approach allowed them to make well-informed decisions, ensuring they wouldn’t run out of life before running out of money.

The Fear of Market Timing

Despite having a clear pathway and trajectory for their investments, Karel and Myriam succumbed to fear. They decided to postpone their investment plans, believing that the market was at its peak and that timing the market would yield better results than staying invested over time. This fear-driven decision proved costly.

We respected their decision, understanding the importance of readiness and commitment. Persuading clients is not our goal; instead, we aim to provide evidence, data, and uncomfortable truths about investing. We firmly believe that successful investing revolves around goal-focused planning and continuous action, while failed investing is driven by market focus and reactionary behaviour.

The High Cost of Delay

A few weeks later, the costs of delay became apparent to Karel and Myriam. Our recommended investment portfolio had grown by approximately 12% since their initial conversation with us. This represented a missed opportunity of €600,000 in growth. However, the real cost extended beyond the short-term loss.

If the €600,000 had been invested and compounded at a prudent rate of 6.5% per annum, based on the models developed by us, the lifetime loss would amount to over €21 million by the time they reached the age of 100. This staggering figure included not just the monetary value but also lost purchasing power and future life opportunities.

The Profound Impact of Inaction

The decision not to act has far-reaching effects that extend beyond monetary losses. Inaction and delay often lead to unlived lives and future regrets. The cumulative cost of not taking action is difficult to measure in monetary terms but is experienced as a profound sense of regret.

The Role of Planning and Goal-Focused Investing

Human nature, influenced by evolutionary programming, tends to prioritise short-term safety over long-term gain. This instinctual response, while understandable, can hinder HNWIs and expats from making sound investment decisions that align with their long-term goals. Planning and goal-oriented strategies are the driving forces behind successful investing. It requires continuous action and adherence to a well-thought-out plan, while failed investing stems from market focus and reacting impulsively to short-term market fluctuations.

We emphasised that approximately 90% of an investor’s personal lifetime return is determined by three key factors:

  1. The strength of a robust plan
  2. The allocation of the portfolio between equities and bonds
  3. The ability to resist the temptation to deviate from the plan due to market fads or fears.

By following a carefully crafted plan and remaining committed to long-term goals, individuals can maximise their chances of achieving life-changing returns.

Seeking Professional Guidance

The case study of Karel and Myriam serves as a reminder of the transformative impact that working with a knowledgeable financial life manager can have. Expat Wealth at Work provides invaluable guidance, helping clients navigate the complexities of investing and make informed decisions based on their unique circumstances.

As financial life managers, we combine expertise and personalised strategies to ensure that our clients stay on the right path throughout their journey. Our role goes beyond convincing clients; we provide evidence, data, and uncomfortable truths to help HNWIs and expats achieve their financial aspirations.


Investment mistakes often go unnoticed, leading to significant financial consequences in the long run. Karel and Myriam’s case study highlights the importance of understanding the compounded cost of delay and the potential impact of inaction and drift. By taking the time to develop a robust plan and implementing goal-focused strategies, HNWIs and expats can avoid falling into the same traps.