Strategic Financial Planning — Listen To Your Grandfather’s Advice

Most people think of strategic financial planning as a skill reserved for the select few—a professional elite fortunate enough to possess advanced degrees in business and economics. Nothing could be further from the truth. Strategic financial planning is a challenge that faces all of us, and there’s nothing complicated about it.

All people not named Bill Gates have limited financial resources. But you don’t need a doctorate in economics to take control of your finances. You have a much better chance of achieving your goal of financial security when you understand basic financial concepts—how to organize and keep track of your cash flow, and how to measure progress toward your financial goals. It’s crucial that you take full responsibility for your own strategic financial planning. And the best time to start is today. Putting off the hour of decision will only sink you deeper into the hole you’re in. Start with these time-tested strategies:
   
* Take your grandfather’s advice—don’t try to beat the stock market. My grandfather made it through the Great Depression. He went on to be a prosperous business owner and left my grandmother an estate worth a million dollars in the 1980s. He never gambled on the market. His secret was a simple one: Invest in mutual funds, diversify your assets, and readjust your portfolio every year. Cash in some winning stocks and use your gains to take advantage of low-priced stocks that have potential. Buy low and sell high.  

* If you think you know what the next Microsoft is going to be, then by all means, go for it. But don’t max out your 401(k) to buy it. And remember: There can’t be a next Microsoft every time you open the Wall Street Journal. Learn to distinguish between strategic market planning and compulsive buying.

[tags]Financial,Debt,Credit,Money[/tags]