When you think about it, our lives are about the decisions that we make and in many cases by the decisions that others make for us. There is no blueprint when we are born, which maps out our lives for us. Our failure, success or mediocrity is measured by a single or multitude of decisions along the way. Financial education enables us to make informed decisions. |
How many of us make informed decisions though? Where we are given, or have access, to all the necessary information about the decisions we are going to make? At various stages of our lives decisions are made for us which we have no control over, and which can decide our fate or path in life. Consider all the young men who have been drafted into the armed forces. They had no choice in the matter and their fate was out of their control.
Consider also, all those brave men (and women) who volunteered to serve in many of the wars we have witnessed over the last century. Would all those who volunteered to become combat pilots in WW1 have done so if they had known their life expectancy was about 17.5 minutes?
More than likely, they didn’t have access to that information, because if they had, they would be able to make a more informed decision. I’m not sure so many would have volunteered knowing they only had an average time of 17.5 minutes to live while in combat. And isn’t that what decision making is all about? Having all or enough information to make an informed decision?
When it comes to finances and investments, how many of us are fully informed through appropriate financial education before making an investment decision. Many rely on media reports or the advice of financial advisers to provide the information necessary in making an informed decision. To make a successful decision requires being fully informed and for most of us that means being educated. And to quote an unknown source, ‘if you think financial education is expensive, try ignorance’.
Financial education is the foundation needed for life. It’s the catalyst for making informed decisions about your financial future. Success comes by making more informed decisions throughout life and that means not relying on others to make decisions for you. Why do financial advisers promote diversification as the solution to reducing risk? Does diversification really reduce risk or is it an easy way out for them to minimise losses? In the words of Warren Buffett “diversification is a protection against ignorance. It makes little sense for those who know what they are doing.”
To know what you are doing, means being armed with enough information to make an informed decision. That’s why financial education is the most important ingredient in your life if you want to be successful. Taking control of the decision making process provides a greater awareness and confidence to lead a more successful life.
Many financial decisions in life are always hard to make, especially where it will have a life changing impact. Having the appropriate information before making the decision is always a better way to go. Don’t wait until after you have made the decision to gather more information. Again, in the words of Warren Buffet “In the business world, the rear-view mirror is always clearer than the windshield.” The path to success is never easy, which is why it is so important to put your resources into gaining the best financial education you can obtain. Armed with the knowledge, you are in a much more powerful position to make more informed decisions throughout your life.
Rob Bourne has been involved in the financial services industry for over 35 years. As a practising financial adviser he focuses on the need for practical and down to earth financial education. The aim is to educate people through financial education so they can take control of their own financial future. Visit Rob's website here for more information on business opportunities, investing and financial education.
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