Fine Tuning Your Finances Is Easy
January 3, 2008
Optimizing your finances need not be a difficult, or complex process. As I see it, fine tuning your finances involves:
- Control
- Growth
- Preservation
By control I mean having the ability to direct your funds towards the types of investments that are best for you. Too many people hand their money over to so called "financial advisers" to invest on their behalf. Unfortunately, it is not uncommon for such advisers to base their investing decisions more on the amount of commission they will make rather than how sound or appropriate the investment is for you and your goals.
Growth is just what it sounds like — having your money outpace inflation, and any investment fees, so that it is increasing in "real terms" and not just on paper. If inflation is 5% and fees are 1% you are not even breaking even until the investment earns 6%!
Preservation has to do with "waste". Keeping what you already have is usually much easier than making more, so simple common sense and frugality are necessary components of financial fine tuning. Setting and sticking to budgets is a great way to keep yourself on track with respect to finances.
Above all, you will have to do some homework if you want to ensure that your finances are on sound footing. Don't just invest in something because that's what everybody else is investing in. Have clear goals and pick specific investments to reach those goals. Don't just look to stocks and bonds, but realize that you can invest in precious metals and commodities, real estate, businesses, collectibles, etc. All have their pro's and con's and all are appropriate in certain situations. When it comes to your finances, don't be a "one trick pony," do your homework, and take charge.
John Michailidis is a recognized business consultant, attorney, success coach, and author of the WealthLoopTM Series of books and training materials for aspiring entrepreneurs and investors. Please use the contact form to get in touch with him regarding personal coaching and business consulting. Download the FREE, 40-page, .pdf "Wealth Creation Manual."
