Investing with a Vision
Written by R. A. Stewart
“He who lacks vision will perish.”-Proverbs 29:18
Financial planning requires vision. What does vision mean? It is the art of preparing for the unseen. People will go through life stages. They buy a car, get married, have kids, and retire. A person with vision will make provisions for these life stages. A person with no vision will spend all of their discretionary spending money without giving any thought to the future.
This is irresponsible and selfish because there are consequences to spending now and burying your head in the sand mentality and that is often poverty.
If you enter into a relationship with someone then you will take your financial situation into that relationship. If you have a bad credit rating then you and your partner may have difficulty obtaining a mortgage.
Someone who is a good money manager will make provisions for the future which will help them to withstand financial shocks which may not have been predicted such as a job lay off or health issues.
Financial planning does not end with saving money, but rather it is the beginning. Investing that money so that it is working for you can increase your savings and certainly your financial literacy. Your risk profile is the factor which determines where you should invest your money.
Your risk profile is the amount of risk you can take on in relation to the term of the investment.
If you are in your twenties or thirties then investing in growth funds may be right for you because you have more time to recover from a market meltdown. Someone in their sixties may need their retirement funds within five years or less and the last thing you need is for the markets to take a dive just when you need the money.
If you are putting money aside for a mortgage deposit, car, your child’s education, then you may want to take a more balanced approach with your investing.
It is worth pointing out that you could fit into more than one risk profile category.
If you are young then financial advisors suggest that investing in growth funds is the way to go for your retirement fund because you may have more than forty years before you retire.
However, you may also be putting away money for a mortgage deposit and need that money within 5-10 years so taking a more conservative approach to your house deposit funds may be best. Again, if the markets took a dive just when you needed the money then your house deposit funds will be short of where you intended it to be.
Having the right kind of attitude to your money will pay dividends in the long term. Some people scoff at those who are prudent with their money, calling them selfish and money hunger yet go out and purchase lottery tickets in the hope of winning a quick million. If that is not a contradiction in their philosophy then I don’t know what is. Gold Diggers are notorious for this. A man is their only financial plan; they have no interest in gaining any kind of financial knowledge. There is an abundance of it out there. You just need to pay a visit to your local library to find such books. Even your local charity stores will have some of these books in stock.
My favourite authors are Frances Cook, Mary Holm, and Martin Hawes. These financial advisors are from New Zealand. Their advice is just as applicable to other countries, well, most of it. It is just a matter of acting on what they say. That is, if it is applicable to your personal circumstances.
Having some kind of vision for your life will make it meaningful and fulfilling and that requires a degree of vision. Just Go For It and take no notice of your detractors.
About this article
This article is of the opinion of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your ebook, website, or blog.
Read my other articles on www.robertastewart.com
