Overcoming Financial Drawbacks

Conventional wisdom dictates to us that as kids all we require to be happy are: sweets, chocolate, some play and tv time. As teenagers we need nothing to make us happy, we are moody half the time and our happiness is as unpredictable as Balotelli’s hairstyle. But from the age 20 – 45 it all changes, our happiness is tied to our financial decision making/investments and their outcomes. In essence within these ages it can all go wrong or turn out amazing financially for us.

Dealing with financial crisis as adults can be challenging, but each investor has to believe that they can overcome the obstacles they face. OR as conventional wisdom has it ‘Listen to all the brokers/portfolio managers and Do The OPPOSITE of what they say” 🙂
Seriously though, in my modest view the following steps are key to helping us fight through a financial crisis:

1) Do Not Panic: it is important to remain as calm as possible, especially mentally. You can bang tables, punch walls but always remember when it comes to making decisions you never make objective ones if you are anxious or panic.

2) Access Information: The individual needs to access as much information as possible. Such informations should be discussed with individuals who not only have a better understanding of the present situation but can analyse the short to medium term outlook.

3) Appraise Assets and Liabilities: There is a need to appraise all existing assets and liabilities so as to determine the real impact of the financial crisis on your portfolio and to put things into proper perspective. Basically there is a need to take stock. Only when this has been done can the true extent of the financial crisis be known and necessary action taken on how to rectify the situation.

4) Create A Plan: A detailed and documented action plan has to be be prepared and followed in other to salvage your portfolio. The individual may seek the assistance of a financial planner/adviser, who will assist with the crafting of a holistic strategy and executing the daily tactical plan.

5) Execute The Plan: It is important to note that the steps created in the action plan need to be adhered to and periodically reviewed. If your finances have taken a hit or your investment a setback your road to recovery usually starts with ‘belt-tightning’ procedures, do not sabotage such processes out of pride.

6) Learn The Valuable Lessons: Diversify your portfolio as much as possible. Booms and burst will happen, it is a matter of time and the wise disern the times.

Always decide what your investment timeframe is ‘short-term’ or ‘long-term’ AND
Remember speculators in any investment are the high risk takers who might either gain all or lose all, Be an investor and have a logical plan.
BOOM!

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