Boosting Your Financial Skills
Apr 08, 2024
“Bad luck”, “Jinxed”, “Silly”, are adjectives’ some clients have used to describe themselves when speaking to me in our initial conversations. I’m sure I am not the only advisor who has heard these terms before. In a world of information overload, influencers and unfortunately fraud, we can easily become hooked on data that is not beneficial to our financial health. While ease of access to financial information has its benefits, it also comes with risks. An awareness of sound financial concepts and where to find reliable information is key to safeguarding your financial situation.
There are several ways to move you in the right direction. The first step would be to learn basic financial concepts. Reputable investment companies both locally and abroad have blogs and investment insight sections on their webpages. Here an investor can learn introductory 101 information on all things financial. As your skills grow, prospective investors may also attend webinars or do short online courses offered by reputable financial providers.
Secondly you should always evaluate your information sources. Is the data source factual and from a reputable licensed agency or professional. Many times, clients will gain information from friends or financial influencers. While there are reputable persons operating in this space who provide sound education to investors not all are created equal. Prospective investors should ensure the people they seek information from are not biased, have experience, and are licensed to offer advice. Also ask questions, do they have any conflicts of interest? Ask as many questions as you are comfortable with: How are they compensated for information shared? What is their background, what security measures and safeguards are in place for prospective clients and current investors? Financial advisors should never shy away from these questions.
To augment your skills, clients should also stick to their budget and financial plan. Using tools such as financial calculators and budget trackers will help you effectively manage your finances. Set aside time to review your positions and overall portfolio. Make changes when necessary and do not adopt a “set it and forget it” outlook. Do not compromise your long-term goals by being swayed by short term gains, investments that seem too good to be true, or investing more than you can afford to lose. There is always some amount of risk involved with investing so you should strive for risk adjusted returns that fall within your comfort zone.
A final key concept to boosting your financial skills is to learn to identify and recognize fraud. We all work hard for our money. Protecting your funds should be top of mind for all investors. Take all necessary steps to reduce your exposure to fraud. Make use of two factor authentication, password protectors and never share your personal financial details or login with anyone. Be on the lookout for suspicious activities, people posing as advisors and sales pitches that require you to act immediately. Overly complex investment products that cannot be accurately explained or simplified along with quoted returns not in sync with market conditions are also red flags clients should educate themselves about.
Following these steps will boost your confidence and place investors on the right track to achieving financial goals. Speak with a licensed financial advisor for additional guidance on how to become more financially savvy.
Christine Rankine is the Manager -Personal Financial Planning at Sterling Asset Management. Sterling provides financial advice and instruments in U.S. dollars and other hard currencies to the corporate, individual and institutional investor. Visit our website at www.sterling.com.jm
Feedback: if you wish to have Sterling address your investment questions in upcoming articles, e-mail us at info@sterlingasset.net.jm.