Financial Literacy

Investment Alphabet

The Alphabet of Healing Foods inspired me to create an Investment Alphabet. You see, I’m a big believer in cooking from scratch and consuming lots of different and wholesome foods so nature can do the hard work. It struck me that this is really quite similar to my personal finance approach.

1. Develop an overall strategy from the ground up. Using advisers is like using recipes. They can provide ideas and help you implement them, but only you know if you want beef or fish for dinner!

2. Use lots of different products, but choose “wholesome” ones and time will do the hard work. Foods have nutritional value and health benefits; financial products have performance metrics and risk characteristics. Good stuff in = good stuff out!  Continue reading

A Made to Measure Savings Plan is a Balancing Act

Have you tried walking on stilts? It’s a balancing act through and through.

So is saving and living comfortably enough. Not easy to achieve, but once you get into the rhythm and learn to adjust your balance, it becomes doable. Very much like the made to measure approach to saving proposed in “Build a Savings Plan That Fits Your Real Life“, an article I tweeted last week and which has been re-tweeted a fair few times since.

Saving is like dieting. If the diet doesn’t suit your lifestyle and/or you are not willing to change your lifestyle to meet the diet’s requirements, you won’t stick to it. Set your savings goals too high and you’ll get discouraged when you can’t save that much; set them too low and you’re undercutting your future prospects. Either way, you won’t achieve your goal: be it weight or account size. So how do you do that?

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All that Glitters is not Gold

“Money, money, money! It’s a rich man’s world”, ABBA sings. But even the rich can’t avoid the fact that money is not all it seems.

Consider this: Is a £100 always worth a £100?

Face value is what it says on the tin. “Worth” is what you can buy with it, i.e. how full is that tin? Sounds obvious, but do you really appreciate what this means? Take this quiz to see.

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It’s Child’s Play: 8 Ways to Teach Kids Financial Basics

24 May is Alphabet Day in Bulgaria. It’s a celebration of learning, literacy and culture. Knowing how to read and write, getting to grips with Maths are all undoubtedly great achievements. They open up the world to a child.

But you know what? There was a much overlooked lesson I picked up in first grade. I got my first taste of financial independence: it was up to me to decide what to buy with my pocket money and I couldn’t complain to anyone if I chose poorly! With limited funds, I had limited choices. It wasn’t until I started earning my own money 10 years later, that I got more choices, but even then, part time jobs couldn’t foot much spending. The upside of making the most of a small budget is that it made it easier to start saving when I got a full time job. I’ve kept it up.

So how do you help kids learn that? You know, give them a head start in life. Bestow the gift of financial literacy.

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