If you are going to go the do it yourself route for your financial plan the financial education is important. This article “Do It Yourself Financial Plan : If You Want To Be Successful At Investing Financial Education Is Key” looks at the top
Do It Yourself Financial Plan
There are several keys to making sure you are prepared and stay prepared for your journey to financial independence using the path of do it yourself. Here are the top 6 tips for financial education.
Financial Education Tip #1 – Get Started Early – The sooner you get started the sooner you can gain the needed knowledge. Financial education is an ongoing process. Waiting will not make it happen sooner.
Financial Education Tip #2 – Eliminating Or Reducing Losses Is Better Than Large Gains – Many times people chase the big gains. While on the surface it sounds good the opportunity for large gains also carries the opportunity for large losses. Finding investments that offer steady returns will give your a better net return than those with the large swings. Which of these groups of returns over 10 years would give you a better end result with an initial investment of $10,000:
1. 20% 6%
2. 10% 6%
3. – 3% 6%
4. 6% 6%
5. 8% 6%
6. -12% 6%
7. 10% 6%
8. 12% 6%
9. -15% 6%
10. 30% 6%
Most people are surprised to see the end result. This illustrates the effect losses have on your investments.
Financial Education Tip #3 – Delayed Gratification Trumps Instant Gratification –
Our world today teaches people that they can have whatever they want today. The problem with that approach is if you want things without saving for them you will have to use credit. Credit means you are paying interest and not collecting interest. It is better to wait for something until you can pay cash for it. This allows you to let compound interest work for you instead of against you.
Financial Education Tip #4 – Budgeting Is Liberating Not Restricting – When you allow yourself to work within it will reduce stress in your life. When you budget properly, you will be able to handle emergencies using savings rather than credit. You will not overspend on discretionary items and your money will work much more efficiently.
Financial Education Tip #5 – Pay Yourself First – You should take money our for savings, risk management and retirement before anything else. The best way is to have these items taken out of your check if possible or on an automatic basis. If you do not pay yourself first you never will.
Financial Education Tip #1 – Take Advantage Of Things That Your Employer Offers- On of the things that people do not take advantage of is the matching on their 401K. This is free money that their employer offers. Many times your employer will pay a portion of not all of the cost of other benefits. Learn what is there and take advantage of the free benefits at work.
These are the top 6 Financial Education tips that you need to know.
Do It Yourself Financial Plan