The expanse of personal finance is huge, even though it seems a niche in the field of Finance. Finance itself is a large field and employs many professionals in various capacities, within it the space of personal finance is quite diverse.
In my experience talking to many people, I have seen there is a confusion in mixing up corporate kind of finance with aspects of personal finance.
For example, Wall Street experts may be seen by many (or even advertised) as personal finance experts too, but nothing can be further than the truth.
Wall Street’s expertise is mainly in driving the hedge funds for big institutions and very high net worth individuals, who also invest in hedge funds to explore beyond the mundane.
Another example is the Insurance professionals masquerading as personal finance coaches. No, they are not coaches but only selling their insurance solutions, and since death or similar unfortunate event (for which insurance is built) is not an easy topic to sell or even discuss, they end up packaging the products with an investment component. To sell these hybrid, often complex products they project themselves as your personal finance advisor and wealth manager.
Finally there is more bad advice all over the place. Buying stocks based on hot tips from someone who works in the financial industry, or buying expensive real estate because your agent says real estate can only go up – are few examples adding to the confusion.
So if the professionals working in the financial industry cannot be trusted, who do you trust if you are not yourself a finance buff?
The answer lies in one simple habit – educate yourself. No, you don’t need to get a degree in finance but just acquire basic understanding of the principles of finance and how simply to apply them in your own context. And then also learn how to avoid the bad advice and filter the incessant noise.
Reading good books, blog posts (such as this) and acting on them to take control of your finances yourself is the best and the only way to financial bliss and build wealth.
If I have to start from scratch today, I will start reading few of the well known books mentioned in the Books section of my blog.
The below is a classic one that I am reading now.
Once you are able to read and grasp the basics, there are only few simple and clear cut principles on which action can be taken.
Below are the few relevant blog posts which describes step-by-step how to setup a personal finance system on your own.
- Five components of a personal finance system
- The SAFE plan – Simple, Automated, Flexible and Efficient
- Budget – Grow the tree upside-down
For more detailed topics, the below are the categories which contain several other posts.
I would love to hear from you what you read to keep yourselves up-to-date and educated on personal finance. Please put your suggestions in the comments below.
1 thought on “Read and Act”
[…] Read and Act […]