“Investing is a plan, not a product or procedure.”
My Financial education has been coming in drips and drabs all my life but the real kickstart only came five years ago with the awakening jolt of early retirement being thrust at us.
My husband and I were forced to look at our various pension plans and put together a detailed financial plan. That was a cold shower of note, the realisation that we really did not have the funds to retire yet! Does this ring any bells with you too?
What were we going to do about it? – A plan was needed but it had to be achievable/believable because in this position you can’t afford to not reach the goal.
Our plan formed itself into a
- He’ll work for the cash
- She’ll get educated on how to grow the money
My husband went back to work and I got financially educated and shared with him.
Robert Kiyosaki’s Rich Dad course was instrumental in helping me focus and untangle all the figures until I could understand what we had and what we needed to have. You might find that like myself you have left it a bit late, but rather late than never.
I also played Kiyosaki’s Cashflow game online. It was a fun and simple way to drum into my head where the priorities lay when trying to get out of the hamster wheel and head towards financial retirement freedom. It’s different for each of us but if you have a plan you are well on the way to getting there.
What have to learn and How to do it
- Determine Where You Are Today – you need an accurate picture of where you stand financially today so make your financial plan (Rich Dad has a great forms to help you)
- Set Your New Goals – Do you want to be Secure? Comfortable? Or Rich? No good just saying rich either you have to see what rich is to you and then decide if you are really prepared to work hard and smart enough to get there. Most of us just wish we were rich the effort to become rich we find is too far outside our comfort zone so we pass but tell ourselves all sorts of stories to make it acceptable to pass on doing the work. Identify your deep-seated reasons why you want to be rich then you have your own incentive; not something fluffy and nebulous.
- Take Control of Your Cash Flow – First look after your “disposable income” and make it a little less disposable by cutting out the unnecessary bling from your spending – Invest it instead. With a bit of education of the right sort you can learn to look after your own finances and, I must say it is very comforting, to realise that you can understand what to do and are not solely reliant on others informing you on investment performance once a year. Stock crash victims will know what I’m saying here.
- How Are You Going To Get There – Again this is dependant on your personal preferences set out in your plan (mine was property rather than the stock market) The idea is to convert your earned income into portfolio income or passive income as efficiently as possible.
This will not only put your money to work for you but also increase the chances that your funds will grow.
- Become an Investor – You might find this idea scary and risky because your family and friends and maybe you have lost but how else does money grow? – Certainly not in the bank!
Risk is in everything we do from crossing the road to driving a car but we learnt how to do both of those well enough to make the risk acceptable enough to enable us to cross roads and drive cars!
All you have to do to lessen the investment risk is to get educated.
Take your ‘financial investors licence’ then when you invest you can do it having analysed the market knowledgeably and continuing to watch it with your educated eyes and to know when to take any action. Become your own best asset, instead of your own liability.
“Be prepared for anything. Don’t try to predict what will happen or when.
The Zen swordsman disciplines body and mind to counter any blow spontaneously. He does not anticipate the moves of an opponent, for that impedes his ability to react. Likewise professional investors know they cannot control the real estate or stock market, let alone the global economy. Instead, they train themselves to be financially intelligent, to think confidently and creatively when opportunities or problems arise.”
“Skilled investors are in control of their investments; employees are under the control of their employers.”
Learn to trust that, when a good deal presents itself, There is risk in every investment, but risk is a relative term. Since risk is often directly proportional to reward, anyone who hopes to become wealthy must be able to invest more aggressively than someone who’s content to be secure. The more financially educated you are, the less risk you’re taking.
Rich Dad Tip
“The reason most average investors lose money is because it is often easy to invest in an asset, but difficult to get out. Your exit strategy is often more important than your entry strategy.”
Invest away till the next time – go well