Author Topic: How to create a firm financial foundation  (Read 205 times)

Nathan_Praetor

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How to create a firm financial foundation
« on: November 19, 2020, 10:37:12 am »
Why is it that the majority of people fail when it comes to setting up a firm financial foundation?

South Africans engage in the economy daily, from the blue collar miners to the well suited business men. We all strive to earn a decent income, we work for that raise or for that extra source of income, yet when the sun sets our finances are not in order.

Can this be blamed on our education system failing to teach pupils the basic principles of money, maybe we can even blame the way we have been brought up. BUT, despite the way we were taught in school or how we were raised, we have only ourselves to blame. Exercising proper financial management does not necessarily require a degree, however it does require some extent of knowledge. It requires the individual to possess the knowledge, as well as the understanding of how to apply the knowledge in a suitable and financial manner.

So let us talk about the following three questions and let us what you think:

1. What does it mean to have a firm financial foundation?
2. What methods should we pursue in order to acquire financial knowledge?
3. What prevents individuals to have a firm financial foundation?

gcr

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Re: How to create a firm financial foundation
« Reply #1 on: November 19, 2020, 01:05:16 pm »
My route was simple - I went into banking starting at the lowest level ex school.
Worked in every single department and worked my way to management levels.
Got friendly with work colleagues in the share department, bought shares and read the ticker tape a good few times a day.
50% of my 13th cheque or bonus were plowed into my share portfolio annually until I retired
50% of my retirement package went into a 32 day investment account (which has only been added to over the years) and 50% was trickle fed into the stock market
To me there are only 2 caveats for investing in the market (knowing the management team and their business history) and looking at the share price trend of the business over 10 - 20 years
There were a few other criteria which I adopted and revised/reviewed over the years
Not everything that counts, can be counted, and, not everything that can be counted counts - Albert Einstein

Hexadecimal

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Re: How to create a firm financial foundation
« Reply #2 on: November 20, 2020, 12:42:52 am »
Hi Nathan

Great question.
I believe it's up to the individual and what they want.

Financial freedom is a choice, not a number in the bank account. What assets I have are pitiful in comparison to what it should be at my age, BUT, I live a financially free life. This is not something that can be taught at school.

Everyone on this platform understands compound interest and dividends, money is not the issue, it's choice.



« Last Edit: November 20, 2020, 08:43:55 am by Hexadecimal »