Today I’m guest posting over at Mustard Seed Money. I’ve included a brief snippet below, but please click over to read the whole post!
Have you ever seen an absolutely amazing looking dessert that you just couldn’t wait to try but then was super disappointed when you bit into it and it tasted simply awful (at least fruit cake looks gross too, right?).
That’s what it’s like if you have an inadequate financial plan.
Maybe you have an investment portfolio of a hundred grand. Great job, that sounds awesome! Okay, but what if half of it is in Bitcoin and the other half is with a financial advisor to whom you’re paying upwards of 1% in annual fees, plus hefty mutual fund fees on top of it?
Maybe it’s not quite as good as it seemed.
Starting with An Investment Plan
Building wealth requires a solid investment plan. But, do you simply have an investment plan, or do you have a financial plan? Your investments are an essential component of money management, but shouldn’t constitute the only organized part of your plan for your finances.
Your investment plan should cover things like:
- determining your time horizon
- defining your risk tolerance
- selecting and diversifying your investments
- monitoring and rebalancing your portfolio
Many people that hire an investment advisor feel like they’re covered with their money. After all, they have someone else that is (ideally at least) ensuring that their money is being handled and growing with the market.
And, for a lot of people, that’s a good thing.
So, learn about the simple investment truths and get a good investment plan in place, it’s a good start. Minimize your risks in investing so much in Bitcoin and look into lowering those investment management and mutual fund fees. It’ll make a huge difference in the long-term growth of your investments.
But there are so many other areas of your finances that need to be managed to really help you achieve financial success. It’s like the saying goes: “the more you know, the more you know you don’t know”. I mean, that’s why you’re here reading personal finance blogs like Mustard Seed Money, right?
To follow up on that old adage, once you realize how much you have yet to learn, the more you search out how to become even more financially successful. And knowledge is most definitely power when it comes to money.
Finding Your Underlying Purpose
So where do you need to start if you really want to become a money boss? Well, you need to go all the way back to your ultimate “why”. Yes, it sounds a little bit trite. But, it’s essential that you ask yourself this question: