Last month I wrote a series of three related articles that I hope you had a chance to check out. The first looked at whether we are heading for a massive crash. The second looked at two reasons we may not be headed for a crash after all and the third, and most important piece, repeated a point I have made so often over the last few years – that you can succeed financially no matter what markets do.
In fact, I would go even further and argue that the more you worry about what impact the “news” might have on financial markets, the less likely you are to succeed financially.
In the long run, the more you automate your finances and ignore the news, the more likely you are to achieve consistent and, quite possibly, life changing returns.
This basic world view seems to have been vindicated once again in the last few days with what many financial markets the world over have done since the surprise election of Donald Trump: Not really that much.
I suspect they wouldn’t have done that much had Hilary Clinton won the day either, net of the inevitable short term volatility that follows in the days after any such “big event”. There might be a bit of a wobble when these things happen, but those of you who have got a sufficiently diversified set of investments, a plan and the confidence to stick to your plan, truly needn’t worry about any of it.
I think this is truer today than ever before. As I wrote after Brexit:
“Scientific progress will continue to be far more important for improving most of our lives than politics, but there is another related factor that will maximise your chances of benefiting from this progress: The possession of real financial literacy.”
I’ve said it before but I truly believe that financial literacy is pretty much the shiniest “silver bullet” out there in terms of being of benefit for us as individuals and for society as a whole.
Every single person who learns just enough about finance to get their financial house properly in order (it’s not that much to learn by the way), hugely increases their chances of being comfortable (at the very least) and, over time, really quite wealthy. This is true even if you have only a relatively small amount to save and invest. It is just that there are too few people in our society telling this story – or at least far too few people hearing it.
Good for society too
If you become financially literate you are also pretty unlikely to be a burden on the state. In fact, you’re more than likely to do better than that and end up being able to support the people you care about, whatever life throws at you, or them. Longer term there is a good chance you might even be in a position to give back to society as a whole in a meaningful way (over and above the taxes you will inevitably pay along the way as a result of succeeding financially).
“To do good, you must first do well...” as they say.
Financial literacy is nothing short of life changing for those who have it but, arguably even more important is the fact that the more people who do have it, the better things will almost certainly be for society as a whole. As JFK said:
“Ask not what your country can do for you, but what you can do for your country”
(One of my favourite quotes...)
A great thing you can do for yourself, your family, your community and the world more generally is to become functionally financially literate. Doing this also makes life way less stressful, that’s for sure.
Given how important I believe this stuff is and what a positive impact it really can have on every one of us – I am more than delighted to report that since I appeared at the tail end of a television program back in October talking about just these sorts of ideas, several hundred new people have signed up to our free email list.
I wanted, therefore, to welcome every single one of you and thank you for being kind enough to trust us with your email address! We promise not to bombard you with daily emails but rather, every week or four, to uplift and inspire you with what finance can make possible and with the nuts and bolts of what you need to do to make a difference.
That’s all for today. Next time, I will say a little more about the specific steps you might take to improve your financial literacy and get your financial house in order regardless of Trump, Brexit, Aliens landing on the moon or anything else that might happen.