Practicing Financial Wisdom

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• Money & Finances: DIY • Money & Finances: How-To • Money & Finances: Retirement • Money & Finances: Saving • Money & Finances: Tips & Tricks

Working hard, and having a good salary for that work, is one thing. Taking that money and making it grow into a financial future is quite another. Practicing financial wisdom isn't something that should wait until you're nearing retirement to start. It is a lifelong endeavor.

Most people work a job in their teens or work their way through college without saving a penny. That’s understandable, but it sets a the habit of making and immediately spending money. You then get out of college and begin your first real job and that habit continues. You then end up working to pay bills and that's it.

Instead of getting a job and spending money, you should begin making wise financial decisions. The decision to do this is an important one if you want to achieve your financial goals. The more knowledge and experience you get over your lifetime about financial matters, the fewer errors you'll make.

Even though research has proven it, it only takes common sense to know that those who are financially wise will end up with more wealth than those who aren't. Take the time and effort to get the wisdom necessary in the areas of investing and finance. This will pay off not only in the end when you retire, but throughout your life.

One thing you need to learn is how to take calculated risks while you are young. It's a practical decision that pays off in the long run. Sure, you could make a few mistakes along the way, but as long as you learn from them, you will be adding to your financial wisdom. You'll have a lot of time to make up for them and you'll be able to recover from them faster. That's far better than taking those risks when you're in your mid 50's. It could destroy your retirement by that age.

A few examples of calculated risks might be:

  • Moving to a location where there are more jobs available in your field.

  • Taking extra college classes to achieve further training

  • Quitting your current job and taking one at another company with lower pay but greater chance of moving up.

  • Starting your own business or finding a partner starting a company

  • Making a few investments in stocks that are high risk / high return

When you are younger you can afford to take any of these risks when they come along. When you get older, however, these opportunities might not be available for you to take. As you begin to grow older, you take on more responsibilities such as marriage, children, and a mortgage. Because of that, you are forced to play it safe. You can't capitalize on those riskier chances when they are available.

Using financial wisdom and taking calculated risks when you are younger is important to exceed financially. In the long run, playing it safe might be the bigger mistake. Whatever you do, research and know what you're doing. Wisdom in financial matters is imperative!