Written by R. A. Stewart
Your future is fully dependent on today’s actions. As far as finance is concerned, it is important to know where you are going and decide on a strategy to get ahead in life. You may be working at a minimum wage job doing menial tasks but you can still develop a plan for your financial future. It is not how much you make but what you do with what you receive in your paypacket that counts.
Look at everything you spend and take a long term view of it. I know some people who take lottery tickets every week. If you are just taking the basic ticket for a power ball, it costs $12. That is around $600 per annum.Think of what can be done with that.
Take a moment to think, “What can I do today that my future self will thank me for?
I can tell you now, that there will be no one who will reach the retirement age and regret that they contributed to a retirement scheme all their lives.
It is the same with financial education. It will enable you to make the best choices for your money. Financially illiterate people tend to fritter their money away on things and then when the car breaks down there is nothing in the kitty to fix it. No one is going to regret that they gained a financial education.
You don’t have to be rich to invest, but you have to invest to become rich. Most people think, “I will do this or that when my ship comes in,” but that day never arrives.
Building a solid financial base requires planning. Joining a retirement scheme is a must. Developing the saving habit is important. The sooner the better. It will then make life easier further on down the track.
Young people have the advantage of time on their side. This means that there is more time for them to recover from a financial hiccup such as a share market meltdown. Financial experts advise the older generation, particularly, the retired ones to be more conservative with their investments. This means taking on less risk. New Zealand financial advisor Frances Cook has a formula for working out how much investors should have in the share market. She says, “Subtract your age from 100”, so a 65 year old, according to her formula should only have 35% of their savings in the share market.
I do know of older people who have a much higher percentage of money in the markets than they should do according to Ms Cook’s formula. I am one of them.
As long as one knows the risks that they are taking on and will take responsibility for any losses that may occur instead of pointing the finger at others when something goes wrong, then why not go for it?
The main thing to remember is that if the loss of your money is not going to cause you any hardship, then by all means take some calculated risks.
Everyone has their own personal circumstances as far as finances go; there is no one size fits all. It is a matter of deciding what your priorities are and what you are going to sacrifice.
About this article: This article is of the experience and opinion of the writer and may not be applicable to your personal circumstances therefore discretion is advised. You may use the article as content for your ebook or blog.
Read my other articles on www.robertastewart.com
