There are several things that you need to do, in order to attain real financial security. Key among those is making strategic investments, acquiring marketable skills and learning how to handle your money wisely. If you just focus on those three things, you would be on the path towards attaining real financial security. In this article, we will be taking a close look at each of those things that you need to do, if you wish to attain real financial security:
Making strategic investments
The strategic investments in question here are those that are capable of generating a good income consistently, over a long period of time. Once you have accumulated an adequate amount of such investments, you would have attained real financial security. The financial security would be based on the fact that you are assured of a comfortable income, ‘no matter what’.
The strategic investments here could be in a wide variety of things – real estate, shares, bonds, mutual funds, well-structured businesses… and so on. The most important thing is to invest in ventures where the returns on investment are reasonably good and where the risk is not too high. It is also important to ensure that you haven’t put all your eggs in one basket, when it comes to investments. You can’t claim to have attained real financial security if all your funds are invested in one venture (however huge the investment). It is only an individual with a huge enough diversified investment portfolio who can claim to have found true financial security.
Of course, if you are to have investible funds, you will have to figure out ways of enhancing your earnings and reducing your expenditure. When you maximize your earnings while minimizing your expenditures, you are able to save appreciable sums of money. Those are monies that can subsequently be used to make strategic investments.
Acquiring marketable skills
If you have good skills of the nature that will always be in demand, that translates into quite a bit of financial security. The skills in question here could be anything from technical skills, professional skills or business skills. With such skills, you can always be assured of a livelihood, however bad things become. In this regard, we can take the example of an individual who has successfully gone through medical school and attained the necessary licenses. With such skills, it would be highly unlikely for the individual in question to fall into abject poverty — because they can always get a job, or at the very least, they can secure locum positions.
The most important thing here is to identify the sorts of skills that will always be in demand. Then the next thing would be to go through training in such areas. You would then get to live with peace of mind, based on the fact that you have skills that will always be in demand (and from which you can always earn yourself a bit of money).
Learning how to handle your money wisely
It is highly unlikely for you to attain real financial security if you don’t know how to handle your money wisely. So this is the most basic thing, and it should actually have come at the top of the least. However much money comes your way, it will all eventually slip away if you don’t know how to handle it wisely. Even if you have made the most strategic of investments, if you are unable to handle your money wisely, you will eventually find yourself having to liquidate the investments to finance day to day expenditure. Or even if you have acquired the most marketable skills, if you are unable to handle the money you make out of those skills wisely, you will eventually go bust.
To appreciate just how critical wise handling of money is, you just have to listen to the numerous riches to rags stories out there. Haven’t we heard numerous tales of athletes and lottery winners who came upon millions of dollars, only to end up broke within a few years? What is it that would make it possible for you to have a million bucks today, and be dead-broke within the next 4 years? Is it not lack of ability/knowledge on how to handle money wisely?
Therefore, once you learn how to handle your money wisely, you will have attained a certain degree of real financial security, for sure. You will have the assurance that you can make effective use of whatever money comes your way, however high or low your income becomes in various phases of your life.
With the ability to handle money wisely, it becomes possible for one to save money (however little) gradually over time. With such savings one can eventually get to a point of being able to make strategic investments. Alternatively, with the ability to handle money wisely, one is able to finance the acquisition of marketable skills (among other things that can lead to lifelong financial security).
So it is very important for you to take the trouble to learn how to handle your money wisely. Admittedly, it may not be easy, as it may entail having to change hard-wired habits. But you can eventually get to a point where you are able to handle money wisely.
In practical terms, learning how to handle your money wisely means several things. Most importantly, it means learning how to budget for your income. Unless and until you learn how to budget for your money, you will always feel as if the money is slipping off your hands inexplicably. You will always have the feeling that ‘you don’t know where your money goes’. On the other hand, once you learn how to budget (and stick to your budgets), you will have developed a sense of control over your money. Having a budget will help you resist impulsive spending. Having a budget will help you in attaining financial goals…
Contrary to the widely-held misconception, handling money wisely doesn’t mean being miserly or mean. It just means being able to make good plans on the usage of your money, and being able to implement those plans in the best manner possible.
The specific things you, as an individual, need to do so as to attain financial security will depend on the stage you are at in your life. If, for instance, you are just starting out in life, you may be better off focusing on acquiring skills that will always be in demand, and learning how to handle your money wisely. Then once you start earning money (using the skills you would have attained), you can be in a position to handle it wisely, save as much of it as possible and direct the savings into strategic investments.
Another individual who inherited lots of investments can focus on acquiring marketable skills, so as to have another layer of financial security.
Yet another individual who already has marketable skills that he is earning some money out of can focus on learning how to handle the earnings wisely, so as to accumulate savings that can be used to make strategic investments.
All in all, a combination of marketable skills (and the income from them), the ability to handle money wisely and strategic investments translates into real financial security.