Welcome to this week series. Always glad to have you stop by and hope one or two articles here will inspire you to become better at money management.
Earlier this year I wrote an article on how your brain was not wired to deal with money and how it can use a little push here and there ( Re-visit that here). I also wrote how I was misinformed and overcharged for life insurance that I ended up cancelling because the broker was not truthful about a few things in the contract. This led me to the thoughts on financial planning.
If our brains was not wired to deal with money and not all brokers are truthful, what then? Just like you should not be asking the dentist whether or not your teeth need cleaning because they are likely to say yes ( it brings in business for them), it is the same way as you should not being going to brokers when looking for initial thoughts on financial planning.
Before you go out there and start signing up from pension funds that are not yielding any real returns or sign up for insurance contracts with hidden terms or invest in uni-trust, you should aim to improve your financial literacy. Understanding the basic money terms is the first step towards making better decisions.
Actually the best place to look for advise about finances is from those people who are already invested in the market or product that you are looking for. Here is a few practical examples:
- If you are looking to buy a house in a particular area, ask someone that own a house in that area and look out for how high or low rates and taxes are, maybe if you have no idea of what costs are associated with a owning a house, ask. There are things that are inherent to owning a house such as rates and taxes, home owner insurance, electricity and water initial connection fees and transfer costs.
- Before investing particular shares look at the financial statements and see how much dividends they have paid over the last few months and also what the growth has been in terms of the share price.
- Are you looking at investing in the uni-trust, know what funds your money will be invested in and ask them for a fund fact sheet. Of particular interest is the fee you will be charged on a yearly basis.
Only once you have done your homework will you be able to go to the right places. Instead of letting them tell you what you should be doing with your money ask them what products do they have that suits your “xyz” ambitions.
What are you doing to invest in your financial literacy?