The name of the game in Personal Finance is Risk Management and not avoidance. If you try to avoid risk, that will be the greatest risk.
Let me give you an example to illustrate this. Some of my friends keep large balances in their Savings Bank Accounts, because they don’t want to take any risk. But they cannot wish away the villain called, ‘inflation’. In the Savings Bank Account, they earn 3 % p.a. whereas the current inflation is more than 7 % p.a.
So you need to learn to manage risk not avoid risk The following 'simple and happy' steps will be of use:
- Work out a plan with the help of your Advisor & stick to the plan.
- While operating in the Stock Market, have a longer waiting period, since the longer the period that your money is available for you, the lower is the risk.
- When you get into any market, have the right mentors.
- Keep learning the basics and the nuances as you go along.
- As you get into higher levels, more sophisticated Risk Management ideas will be revealed to you. I want to emphasise the phrase, ‘revealed to you’. This means when you are ready, the right teacher will appear.
Many have benefited by following the above simple and happy ways to be Rich. We suggest that you discuss the concept of Risk Management with your Financial Mentor before implementing our ideas.
