5 hurdles holding you back from retiring a millionaire

Anyone can retire a millionaire — if you stick to smart habits and overcome a few common hurdles.

That’s what financial adviser William Bernstein writes in his book, “If You Can: How Millennials Can Get Rich Slowly.”

The formula may sound simple, but the execution is easier said than done.

“Bad things almost inevitably happen to people who try to save and invest for retirement on their own, and if you’re going to succeed, you’re going to need to avoid them,” he explains. “To be precise, five bad things — hurdles, if you will — must be overcome if you are to succeed and retire successfully.”

If you’re striving to retire with a million in the bank, start by recognising, and then overcoming, these five hurdles:

1. Overspending.

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'People spend too much money. They decide that they need the newest iPhone, the most fashionable clothes, the fanciest car, or a Cancun vacation,' Bernstein writes.

Even seemingly innocent expenditures -- a daily latte, an excessive cable package, brand-name sneakers, or unnecessary restaurant meals -- can add up, and consequently, wipe your savings.

Learning to save is crucial, Bernstein emphasises: 'Even if you can invest like Warren Buffett, if you can't save, you'll die poor.'

If you're trying to break overspending habits, read up on the most common psychological overspending triggers, how stores trick you into parting from your cash, and what you can do to keep from spending.

3. Getting emotional when it comes to investing.

Getty/Dennis Grombkowski

When it comes to investing, emotions can wreck our investment portfolio all too easily. This happens because we ignore, or don't understand, market history, Bernstein explains.

'It's natural for people to assume that when the economy is in good shape, future stock returns will be high, and vice versa,' Bernstein writes. 'The exact opposite is in fact true: Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high.'

The point of learning market history is not so you can 'time' or beat the market, Bernstein emphasises: 'You should use your knowledge of financial history simply as an emotional stabilizer that will keep your portfolio on an even keel and prevent you from going all-in to the market when everyone is euphoric, and selling your shares when the world seems to be going to hell in a hand-basket.'

5. You.

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'The person most liable to screw up your retirement portfolio is you,' Bernstein writes.

In addition to letting our emotions control investing strategies and decisions, human nature can derail even the best designed portfolio, he explains: 'Human beings are simply not designed to manage long-term risks. Over hundreds of thousands of years of human evolution we've evolved to think about risk as a short-term phenomenon ... We were certainly not designed to think about financial risk over its proper time horizon, which is several decades.'

Investing is all about long term planning and harnessing the power of compound interest, but we tend to think short term with a 'get rich quick' mindset.

'Know that from time to time you will lose large amounts of money in the stock market, but these are usually short-term events,' Bernstein emphasises. 'The real risk you face is that you'll be flattened by modern life's financial elephant: the failure to maintain strict long-term discipline in saving and investing.'

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