Everyone has unique financial priorities, some combination of saving, spending, paying down debt, investing, and accumulating wealth. Financial literacy – understanding how money works – will help you achieve your goals and feel more confident and in control.
How do finance experts manage their own personal finances?
MoneyTips.com recently polled top experts in personal finance and wealth about their own personal finance habits. They asked four questions:
How much time do you spend managing your investment portfolio each month?
(67% of respondents spend an hour or less each month.)
Do you rely on professionals to help you make at least some of your personal finance and investment decisions?
(60% of them do, including Robert Kiyosaki who said, “Business and investing are team sports.”)
How many more years do you plan to work before you retire?
(50% have no intention of ever retiring.)
How do you allocate your personal assets?
(Their average asset allocation was 11% cash equivalents, 12% start-up equity, 13% Fixed Income Securities, 44% stocks, and 20% real estate.)
How will these insights shape your own financial decisions? Will you use these savvy money experts as models for your own approach?
Read more: How the Top Social Influencers in Personal Finance and Wealth Manage Their Own Money.
How can you build your own confidence as an investor?
Kiyosaki offered further advice on his own blog, about how to become a more confident investor. He boils it down to understanding the difference between fundamental investing and technical investing.
“For the fundamental stock investor,” he explains, “the most important consideration for selecting a good stock for investment is the future earnings potential of a company.”
For the technical investor, on the other hand, “the most important consideration for selecting a good stock is based on the supply and demand for the company’s stock.”
He says the confident investor must have the skills to assess stocks from both a fundamental and technical standpoint, and understand the differences between them.
Read more: Becoming a Confident Investor.
Right-brained versus left-brained investing
Another dichotomy of investing comes into play when you consider how we use either side of the brain in the investing process. We use the right brain for emotional tasks like reading patterns and interpreting consumer behaviour, while we use the left brain for logical tasks such as to analyze problems, measure risk, and calculate solutions.
According to an article from Golden Girl Finance, reprinted at Yahoo Canada Finance, it is a holistic approach that is most effective – one that crosses over to use both sides of the brain. A lateral approach that favours one or the other will only give you part of the story.
Read more: Are You a Holistic or Lateralized Investor?