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Crowdfunding: Should you go with the crowd?
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Business Finances, Personal Finance

Go with the Crowd or Go Your Own Way?

Research says crowds are wise: watch this BBC video or read this book for more on this assertion. But, as another BBC article explains, the crowd is not always right. Witness the 2008 financial meltdown for proof that herd mentality can be dangerous. In fact, most people prefer to fail with the crowd rather than stand out with a different view. Being contrarian is hard work mentally but it can pay off if you take less risk or go for a smart bet.

New research is emerging into how social influence can alter the wisdom of the crowd by steering opinions in a particular direction. That’s where crowdfunding is at. Is it good or bad for you that crowd views and sentiment trend? Well, it depends. Are you an investor, a business looking for funds or a good Samaritan?

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Business Finances, Personal Finance

Austerity vs. Budgeting: Which do you prefer?

Greece is between a rock and a tough place: Do you stop pension payments to retirees to fund an interest payment on government bonds? Living on credit aggravates the money situation sooner or later – that’s where Greece is at.

The alternative is to live within your means by budgeting and prioritising. It’s no mean feat to achieve personally and even harder at national level. But it can be done. Germany is often cited as financially disciplined. Norway is lauded for stashing North Sea Oil wealth into a fund to finance future generations.

Do you have the discipline to live within your means? Can you bear austerity for a time to get out of a financial hole?

Bloomberg published a good summary article recently on how austerity has played out in the past. As I was reading it, it occurred to me that politicians don’t typically get things right, but their decisions do provide interesting lessons.

So what can history teach us about how to handle financial problems and getting back on track? Plenty, I believe.

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