The average person may or may not be inclined to focus on their financial planning outside of their monthly budgets and certain plans for the future.
The average person may or may not be inclined to focus on their financial planning outside of their monthly budgets and certain plans for the future. Those who do take an interest in this process, however, without much in the way of formal education in a financial setting, can sometimes feel overwhelmed by trying to diversify their portfolio, invest in the first place, or learn about new focuses and technological developments such as the massive revolution in cryptocurrencies and crypto mining.
Keeping up with financial trends, practices and baseline knowledge can be tough as an average person with a normal job. That said, financial literacy is quite literally an essential skill of life, and learning more about it can be a fascinating approach, one that truly helps you improve your quality of life in the long run, as well as securing your position going forward.
After all, financial foresight can have a massive effect on the kind of life you live. Think of 2008, where those who had been planning dutifully suddenly found that their assets and investments came to naught, losing businesses and jobs. Now, we would of course NEVER state that these people didn’t practice shrewd financial foresight because the issues here were out of their hands completely - only that those who did manage to predict this ahead of time managed to secure their positions and even make money from that financial crash. As you can see, financial fluency can quite literally pivot the course of your life for good.
Think of all those who invested in Bitcoin early, for instance, and where they might be now. That said, how can we, as an average person without much in the way of financial pedigree or thorough understanding, gain the kind of insight we’re looking for? In this post, we’ll refer you to a few methods that make the most sense, and help you avoid common pitfalls:
Many financial blogs, like ours, can keep you up to date with the news and headlines, as well as give you more context about them. Setting them up as priority RSS feeds you follow, adding these sources to your morning wake-up call from your voice assistant news reading, and following blogs or writers you enjoy on Twitter can help you keep up to date with changes. Picking a topic at random (such as interest rates being cut) and using this to read into your topic can be a key way to glean more insight and understand the story being spoken of at this time.
It’s important to recognize that economics is a science, and one that requires a diligent approach to get right. It’s okay to not understand all the concepts being spoken of. This is why keeping up with a particular outlet can help you learn via concepts, as well as seek the definitions of terms such as puts or calls in the stock market. This way, you become literate over time, and can understand the foundational grounding behind each news story.
Financial experts that are thoroughly educated in a given area, such as Dan Hollings and his ingenious takes on managing cryptocurrencies, are worth following and learning from. There’s a reason some people look to figures like Warren Buffet, or those involved in managing capital funds, or those that have a notable history in calling out poor investments.
For instance, in the documentary ‘The China Hustle,’ Muddy Watters LLC, run by Carson Block, focused on identifying falsehoods proclaimed by Chinese firms using reverse mergers to go public in American markets, vastly overestimating their values, and causing many investment firms to lose out on their value.
Financial experts come in all shapes and sizes, from Michael Burry, the investor famous for the big short, to broadsheet commentators that have been writing about the world of finance for decades, learning about this insight and listening to a few trusted voices can be a phenomenal means of thinking like the best do, and practising as they might.
While you must take everything on the internet with a pinch of salt, online communities can be a fantastic means of learning how to care for your own financial position with care and diligence.
While some online communities such as Reddit’s r/wallstreetbets has made international headlines for being involved in such things as the GME stock hold, it’s important that you focus on communities that are well moderated, care for good information, and don’t promote investment for the sake of it or for internet clout.
Sticking with Reddit, r/PersonalFinance or r/Investing are great places to discuss, ask questions, and give advice. Of course, you are well within your rights to find a community that you find the most useful, fortifying your financial position through good sense and a continual willingness to learn.
It can also be worthwhile to look into past case studies and understand the financial histories of some of the biggest investments out there. For instance, learning about the conditions that led to the 2008 financial crash can help you see just why this was such a pivotal event, and the overleveraging that can lead to problems once a house of cards comes crashing down.
This isn’t to say that having context like this can help you make many of your own financial decisions as none of us individually have control over these systems, but at least learning about these matters can help you become more informed when learning new concepts, and understanding the contextual framework of why market shifts happen and how they’re caused. As they say - you need to know where you’ve been in order to know where you are.
Of course, this can also apply to your own life and those you learn from around you. It may be that someone you know accepted too-high payments on a car they couldn’t afford, and ended up struggling thoroughly as a result. This can help you see directly just how one bad decision can lead to struggles for some time, and can help you refer back to these experiences when a bad opportunity presents itself.
Financial scandals are the most fun to keep up with, because they showcase just how finances can be hidden, how small mistruths can become big issues, and how even massive institutions can be broken by financial impropriety on the behalf of one individual.
Scandals can also help you learn financial contexts, such as investing, returns, reports, business earnings, and more. Because financial scandals are often considered to be ‘juicy’ and ‘exciting,’ often great movies and documentaries are made explaining exactly what happened, why, and who was at fault.
Immerse yourself in these stories and your natural curiosity will be stimulated. This may even help you learn how to avoid shoddy words or encouragement, promises that lead nowhere, and investments that simply aren’t worth your time. For instance, consider how Wells Fargo fell into the trap of opening multiple accounts for people who had not requested these services, as a way for certain financial managers to impress their bosses. This is a great example of how being shrewd and allocating trust in minimal amounts can help you guard your finances more properly, and avoid overly wishful thinking.
It’s good to learn what the trading platforms do and why they’re used. For instance, apps like Robinhood have allowed the average person to buy shares on the stock market and have taken on a few controversies due to the that operation. Some, like the Bloomberg model, are the absolute standard that many wall street investors still use to this day. Coinbase, and others, provide the foundational base for many to invest in cryptocurrencies in the best possible manner.
Some trading platforms even permit you to use false currencies to trade with, in order to give you chance to play around and become more familiar with their software package. Noodling around, watching tutorials, or at least being aware of others using this technology can help you see how investing is handled by those managing their money in the modern day.
Of course, certain software packages have also been curated to help you with your own spending. ‘You Need A Budget’ is one of the most popular today, as it provides spreadsheets you can use to easily calculate your budget, plan for debt, and spend only that which you have left over. This is a great example of the virtue in looking for a tool to make this approach easier for you, helping you get to grips with your spending in a realistic sense.
Ultimately, these are tools you can choose to use or ignore at your leisure. However, if you’re looking to become a shrewd and sharp financial planner, then this can be the best way to do it.
With this combination of considerations, keeping up with financial trends and practices as an average citizen is sure to be more than possible.
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