As finite humans, we are not very good at handling loss. Risk exposes us to danger, harm, or even loss. Therefore, when we lose something (job loss, money loss, loss of life) it takes a toll on our whole state of being and takes us a while to recover. It often becomes difficult for one to regain what they lost or at the very least, it takes time. As a former State Farm agent, I personally witnessed people losing their house from a fire or some kind of natural disaster. It was truly devastating. Everything was put on the back burner until they could be made “whole” again. Sometimes losses happen and there is truly nothing that we could have done to prevent the loss. However, there are several measures to prevent loss in our own financial world.
The best way, in my opinion, to reduce loss, harm, or danger in our financial lives is the process of getting educated. We spend 12-20 years getting an academic education. We also spend more years with a business or professional education, but we honestly don’t spend many (on average) years getting financially educated. All education has tremendous value, but I could argue that financial education has as much merit, if not more, than an academic or business education. Now, obviously you have to go to school to learn and also be proficient in your own profession. I can’t argue that. However, statistics show that people make better decisions when they are truly educated, as opposed to making a decision out of fear, greed, or following the herd mentality.
Once you are educated about any financial decision and take the time to look at the possible risk vs. reward, you will make the best financial decision for your situation. That is the easy part. The hard part of this process is the time that it takes time to learn. One of your most precious assets is your time. There are not many people that truly want to take the time to learn. Thomas Edison stated, “ Five percent of the people think, ten percent think that they think, and eighty-five percent of people would rather die, than think.” I would say that is a pretty harsh estimate, but it drives the point home.
In today’s world, we have to have everything at our fingertips and want knowledge “right then and there”. We live in the land of instant gratification. It is very hard to delay that urge and actually take the time to develop a structured plan that sets out your individual goals to reach “financial independence”. Therefore, let’s break the pattern of inertia and start moving in the direction of educated action. This starts with educating ourselves in the financial world. Practically, this could come from books, online resources, podcasts, relationships, or many other resources. If education is not part of your financial plan, then that could prove to be very costly.
Be innovative. Educate yourself about financial terms, the risks in your own life, and wealth building strategies that could help better your situation. There is also wisdom in seeking out someone whom you know and trust that will educate and lead you in a good financial direction. In closing, as Nelson Mandela once said, “Education is the most powerful weapon you can use to change the world.” Let’s get started!