Finance-Matters, it certainly does

This website is intended to be informational and educational on matters related to personal finance, in the broadest sense.

Personal finance is all about the management of wealth to facilitate living the life that you aspire to.  Finance and wealth management impact every aspect of our lives, yet it receives little or no attention in schools (at least not in the U.S.).  You do not need college course credits in finance to understand finance and wealth management, but there are plenty of people who will try to convince you otherwise and they will make you pay and pay for their advice or services.

Yes I will discuss stock market investment strategies, but it also looks at financial products and services, tax planning, alternative investments, borrowing and a host of other things.

I have worked in the financial service industry for almost forty years and like everybody else I am barraged daily by advertising and information from that industry but, all too often I feel the public is misled, miss-sold financial services and products and pressured into actions without having the necessary perspective to make informed decisions.

This website (a continuing work in progress) is intended to demystify the world of finance, to provide the reader with the analytical tools and confidence in making decisions for themselves and to help them avoid paying unnecessarily for help and advice (the cost of which is often less than transparent).  If ever there is something unclear, I guarantee you are not alone, please let me know so that I clarify the issue. 

Part of the perspective that people need is a better understanding of themselves, knowing what is important, focusing on attainable goals.  Planning for something which is improbable is road of frustration and disappointment.  Getting to grips with planning both for the long term, such as retirement and for the short term such as a dream vacation or a new car.  People need to understand what their risk tolerance, it is pointless having investments over which you lose sleep.  After all, wealth management is about maximizing your quality of life; you may want to leave an inheritance for your children but this should not be at the expense of you not living your life to its fullest potential, hopefully you can do both.  The greatest inheritance you can provide your children is how to live their lives to their max.

There is a simple adage, that I have corrupted, and no doubt I will do so again on this website, “A dollar saved, is a dollar and a quarter earned”, actually the equivalence ratio saved to earned depends on your marginal tax rate, but hopefully you get the gist.  Do not let phrases like marginal tax rates put you off, terms like that will be fully explained; either by foot note (if the explanation is quick) or by a hyperlink to an article if it needs a more in-depth explanation.

 

Sometimes purchase decisions are not just about cost, if there is an element of risk peace of mind is critical.  The cost of insurance, the risk on an investment are prime examples of how your risk aversion interacts.  An article on risk aversion, will look at how you can assess it and the financial industry assumes a one size is applicable for all of an individual’s investments.  Understanding risk, your aversion to it and how it can be mitigated, at a cost is critical.   

On a lighter note I will also look at spending your wealth, attaining those things and experiences you want. How can these be made a little more affordable?  For example, which is cheaper, leasing or buying a car?  By the way the answer depends on your preferences and maybe a few things that might not be immediately obvious, such as the price risk on the car when you come to sell the car, the impact of accidents if that worries you.