Is your preferred reading material the economics section of the New York Times, or are you more a fan of the tabloid press? Not everyone finds economics and politics scintillating, but there is evidence to suggest keeping a finger on the pulse of what’s happening in the world could keep your personal finances in better shape.
Knowledge is Power
The only way to become better at something is to educate yourself, which is why we go to school if we want a better career and greater opportunities in life. Apply this belief to personal finance and you will soon realize that education is the key to improving your financial status. Of course, learning how to use the Forex website may not make you a millionaire, but it could boost your income.
The problem is that most of us adopt a passive approach to our personal finances. If the bank tells us their mortgage deal is the best, we listen. If we spot a new current account with decent rewards, we decide it’s too much hassle to move because familiarity is comfortable.
Follow the Experts
Charlie Munger, Berkshire Hathaway billionaire, is a firm believer that knowledge is power. He eschews the intellectual approach to finance. Rather than taking what someone tells you as the gospel truth, he says you should investigate and try to disprove his or her facts. For example, if you visit a financial advisor and this person is keen to sell you an investment strategy, check out the key facts for yourself. There might be a better investment product out there, one with lower commission fees and higher returns.
Staying in touch with politics and the economy is smart. Politics has a direct effect on the economy, which in turn affects our personal finances. The recent US presidential election is a great example of how politics influences the economy. Trump has already set the wheels in motion to repeal Obamacare, he plans on imposing import taxes, and he wants to give the tax code system a complete overhaul. When these policies are rolled out, they will have an effect on the US economy, and by extension, the majority of American citizens.
Boost Your Knowledge
Politicians have aids and expert advisers to ensure they have the up-to-the-minute information they need to formulate an opinion. Us mere mortals are reliant on information freely available in the public domain. However, because there is not much information out there, you need to learn how to filter out the junk news.
If you want to keep up to date with the latest political events and economic news, read the New York Times, the Economist and the Wall Street Journal. Useful online resources include CNN and Bloomberg. Different websites have different focuses, but sites like Kiplinger and the US government site, MyMoney, are excellent resources for personal finance information.
Never let other people tell you what you should do with your hard-earned cash. Knowledge is power. The more knowledgeable you are the more informed your decisions are going to be.