These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
In my 40 years of Financial services experience, dealing with some of the most disadvantaged and some of the wealthiest people, there are some general financial rules of thumb that help guide people with their financial decision making. I think the three I’ll discuss below are particularly valuable at this time of year as there are many financial scams and opportunists looking to take advantage of people’s good will and lack of knowledge.
Rule 1 – “If it’s too good to be true, it is..” One of the primary human motivations is greed. The desire to improve our lot and circumstances, improve our well-being. In financial matters, this entails maximizing our returns and increasing our wealth. In general, the higher the rate of return, the greater the risk/uncertainty. Keep this in mind when assessing where and how to invest your money. There is no such thing as ‘an easy thing’. Very few investments are ‘guaranteed’.
Rule 2 – “A fool and their money are easily parted”. This is very closely related to Rule 1. There are no such things are ‘Get rich Quick’ or ‘easy money’ schemes. Before making a purchase or investment, Always do your due diligence and investigate the nature of the risks and soundness of your investment/purchase from independent and multiple sources. Don’t take all information at face value.
Rule 3 – “Trust your gut” If your inner voice is sounding alarms or your stomach is churning about an investment or purchase, then back away and do more due diligence or don’t proceed. Regardless of the merits of the purchase, if you are uncertain or uncomfortable, then do not proceed. Everyone’s family, financial and objectives are different. Not all investments are suitable or appropriate for everyone.
Take your time before making financial decisions. While you will deal with many individuals who are licensed and accredited to provide varying degrees of financial advice, not all have the same level of experience or ethics. Compensation for promoting financial services can also sway the advice being given. You work hard for your money, take your time in making appropriate and well reasoned financial decisions. You’ll be much better off in the long run.
Share these ideas with friends and family and come back to check out daily financial tips and ideas. If there are subjects you wish covered or questions, please email me and I’ll include them in future posts.