Ideas on how to become rich -
Financial Management - what the rich do in a down market - SUMMARY
Here is a quick summary of the various ideas on basic financial management:
Don't let your financial or retirement or money plan be an accident
Everyone needs an advisor - and there are different kinds of advisors
Build your financial house based upon your financial personality
Combine your dreams into a plan
Have the two major strategies to win the battle for investment survival
Know where you are going
Mix and don't match
Do not be your own enemy - mind your mind, and thereby mind yourself
The jockey matters as much as the horse
Ride out financial storms
Build your house on rocks
Use numbers to calm your mind and calm yourself
Don't smother your own personal/ financial dreams
Take the road less travelled
Remember to ask and answer the right financial questions *Who are you?*
Determine correctly your investment outlook and selection *What works for you?*
You can also access easily the articles on financial management by Sally Klaus below:
Financial management part 1
Financial management part 2
Financial management part 3
Financial management part 4
Financial management part 5
Financial management part 6
Financial management part 7
Special thanks to Sally Klaus for her kind and invaluable contributions on Financial Management: What the Rich Do in a Down Market.
More investment knowledge and important concepts, finance or investment articles, data, and other finance/ investment-related ideas to come here in future posts... thanks for staying here with us. Thanks for reading!
Ideas on how to become rich!
Ideas on how to become rich - Financial Management - what the rich do in a down market - SUMMARY
Ideas on how to become rich - Financial Management - what the rich do in a down market, last part
SALLY KLAUS AND HER FINANCE IDEAS:
FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Last part
Welcome back, dear reader. This is the last part of Sally Klaus' invaluable contribution to my finance, investment and money site. She writes about: "Financial management - what the rich do in a down market". The last article follows:
Take the road less travelled
Your dreams are worth major efforts and you do have a choice: you can go to the financial market without any idea of what investment can and cannot do for you, buy on whim and cobble together an investment portfolio that has no purpose, except vaguely to make money; or you can decide what you want specifically, and learn enough to know what is available on the market, and thereby make calculated decisions and take the correct risks.
There is a lot of finance and investment information out there but do take in the right investment information that will enable you to make good decisions and take the right choices – do be selective and use financial information wisely. Be an informed investor!
Remember to ask the following questions:
Who are you?
Determine your investment profile. What kind of risks can you bear?
How old are you?
How secure do you feel about your ongoing streams of income?
How many years more before your retirement?
What is your life expectancy after retirement?
What is your source of investment capital?
What are primary investment objectives?
When do you expect to need money? Do you need the money now, or later?
Are you aware of the potential risks and benefits of your investment portfolio?
What is your tax status?
What changes to your lifestyle do you have to make?
What is your current net worth?
What steps are you taking to protect your financial assets, your income earning assets, and earning potential?
What works for you: Determining your investment outlook/selection
How does your desired return compare to your risk profile?
Do you prefer growth or dividend income oriented investments?
Do you understand financial risks and rewards?
Is it easy to buy and sell your investment assets?
What are your choices for buying this particular asset?
What are your costs and fees associated with buying and selling this asset?
All the best, and I hope that you have learnt and benefited immensely from all the information and advice in this investment and financial series. Thank you for reading!
End of the last part of this “financial ideas” series
Special thanks to Sally Klaus for her contributions on financial management, which were particularly interesting and memorable for the extensive use of metaphors. I am thankful because I have many economics research papers and she has saved me time and effort to write, and furthermore her financial advice contributions have been very useful and illuminating. A summary of financial advice and more comments follow in the next post. Thank you for reading and cheers.
Ideas on how to become rich
Ideas on how to become rich - Financial Management - what the rich do in a down market, part 6
SALLY KLAUS AND HER FINANCE IDEAS:
FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Part 6
Hello and welcome. Here is part 6 from Sally Klaus' ideas on finance and financial management - what the rich do in a down market.
Use numbers to calm your mind and calm yourself
Investment success is attainable, but not guaranteed, no matter how well conceived the asset allocation plan. The odds of achieving wisdom and success can be enhanced and improved upon through practical thought and reflection. Along the way to achieving your investment goals, you need to pay attention to certain investment guidelines and principles intended to shape and sharpen your efforts.
Knowing yourself and coming to terms with such knowledge represent difficult but highly worthwhile investment goals. Warren Buffett has repeatedly advised investors to find and develop their own circle of competence and stay within it. Knowing yourself is also an ongoing process where you learn to discern the 5 physical senses and train your mind to process enormous amounts of information and filter all down to what is essential. Asset markets may change, technology may change, but the usual human response has tended to remain similar through the ages. If something does not feel right, let it pass. It is not wise to allocate assets and invest based purely on instinct and yet it is equally unwise to ignore your gut instincts when doing so.
Remember, it is not a real financial mistake if you really learn from it.
Don’t smother your own, personal, financial dreams
Being unaware of the financial risks you are taking is one of the quickest ways to find yourself on the road to financial perdition.
Never take comfort in crowds – if everyone is making investment losses, you may feel good that all are suffering together, but it is not the right thing to do. Do not follow others blindly because it is your money, your investments, your life. It is all about your dreams and not about others.
Chasing financial performance alone is not sufficient to determine whether that asset is good or bad. Sometimes we give up a good asset and later regret it because it is not performing. That wrong decision could cost lives and money.
Not using the correct investment advisor is another step to investment ruin. Learn to trust someone who is an investment expert and then ask around for good investment advice so that you can learn on the way to success.
Do not let emotions rule your financial decisions. Fear and greed are the two greatest emotions that lead to ruin in an investor’s life.
End of the sixth part of this “financial ideas” series
More financial advice, financial education, and money ideas to come in the next post. Special thanks and acknowledgements to Sally Klaus for her invaluable contributions and ideas on financial education. Thanks for reading and cheers!
Ideas on how to become rich!
Ideas on how to become rich - Financial Management - what the rich do in a down market, part 5
SALLY KLAUS AND HER FINANCE IDEAS:
FINANCIAL MANAGEMENT
Part 5
Welcome back to this financial management series here on my ideas site - what the rich do in a down market, by Sally Klaus.
The jockey matters as much as the horse
The selection of the fund manager, or stock broker, is as important as your investment assets themselves. Who is riding the horse, on what kind of track, and what kind of race are all important questions for you, as it is your investment money we are talking about here.
Is it possible to have exactly the right asset class and have your investment returns ruined by choosing the wrong investment manager. Yes, therefore it is important to select the right investment jockey for your investment horses. Whether you do it for yourself or use an investment advisor to seek out the best investments for you, you will be evaluating how well they know the financial track and how they have performed under different kinds of financial and economic conditions in the past.
Passive investing is not as good as active investing, where the goal to do well is part of your life, whereas passive investing is mostly relying on the investment choices and investment paradigms of the fund managers or the jockeys. Active investing gives you direct control of your financial choices and enables you to be able to judge your investments better. The flow of financial information is also better and more direct.
Yet, sometimes, you do not have the time to invest directly, so it is indeed necessary for you to get a fund manager or a metaphorical financial jockey. So some of the questions would be, if you are not going for active investment but for passive investment:
What are the ethics of the fund manager, his investment philosophy and his investment or financial discipline…?
If you discover that your jockey is not doing well, you may have to change jockey mid stream to prevent future investment losses or poor management of your assets. In the long run, you have to monitor the investment manager’s performance closely; perhaps, even closer than you monitor your own financial asset allocation mix. It is essential to make sure that your investment portfolio has a good day at the investment track and is working hard to make your investment dreams a reality.
Riding out financial storms
Be prepared for the inevitable. And financial storms are definitely inevitable, just like the immutable law of gravity. What does up must come down, and vice versa. Be aware of market cycles and the financial movements of all those up and downs which may be out of our prediction and control. The need to protect yourself is there, just like insurance – how much coverage do you want? How high is the value that you are insuring? The higher the value of the asset and the lower the deductibles, the more the protection will cost. The more you cover, the more it costs, so you have to weigh the pros and cons of your coverage. You must always ask yourself: what is it that you want at the end of the day?
Building your house on rocks
The stronger the foundation, the better and more solid the house will be. This is commonsensical and thus it would be crucial to decide how your human capital is going to turn into your financial capital at the end of your own personal investment journey… it depends on several things. How much you earn, how much you spend, your lifestyle choices, your plan for taxes and inflation … all these are important financial questions that you need to ask yourself.
It is important to keep in mind that each of us is different and the investment path for converting our human capital into financial capital will not be as smooth as what we hope it to be. Still it is vital for us to build up a steady investment/ financial conversion journey so that we allocate investments properly.
End of the fifth part of this “financial ideas” series
Special thanks once again to Sally Klaus and her invaluable contributions to financial education on Ideas on How to Become Rich. She has been a great help to my finance, money, and investment blog. Thanks for reading and cheers!
Ideas on how to become rich!
