Wednesday, January 20, 2010

You Don't Know What You Don't Know

One of my favorite phrases is: "You don't know what you don't know."  It is amazing how many situations this phase can accommodate.  It can be a great excuse when you flub up, but it can also be the reason your best laid plans don't work.

As the year is new and we are attempting to better ourselves and our homes I would like to suggest we work on "what we don't know."  For me the arena of "don't know" is huge and I love it when I am able to shrink it ever so slightly.

One area of concern for many people is the world of finance.  With the economy doing what it has been doing for the last few years there are many people afraid and confused about the "right" way to handle their money.  With questions surrounding retirement accounts, college funds, interest rates, market fluctuations and a number of other unfamiliar topics, a person can be very timid when it comes to properly handling their finances.

Here is my suggestion, go find out what you don't know.  Use this time when you have a ton of unanswered questions to get educated.  Expand your understanding of what is going on around you.  Take a class at the local community college.  Watch a financial news program once a week.  Check out a book from the library now and again.

It doesn't take much to expand your knowledge, but lots of people are so afraid of asking questions they decide it is better to be ignorant.

Now I am going to suggest a really scary idea.  Go see a financial professional.  Ask questions, and get a plan from someone who understands the market and your goals.  Please note: I did not say invest all your money with a financial professional.  I did not tell you to buy into big portfolios or investments you don't understand.  I did tell you to find someone who knows what they are talking about and get a firm grasp of your goals.

It is my experience that many people are wary of financial planners.  In some cases you should be, but in most cases a reputable financial planner is a great idea.  Their job is to know about a confusing market and explain it to you in plain terms.  They are also there to help you define your goals and find ways to reach them.  They can be your partner, because they know what you don't know.

Now you really don't have to follow my advise.  You can be a financial whiz even if you never meet a financial planner.  You can have wonderful goals and well defined plans to accomplish everything, however most people need a place to start.

If you don't know where you are going it is doubtful you will get there.  I had the chance to take a financial planning class years ago and as part of the class I had the chance to sit down with a certified planner.  It was very nice to find out I was on the right track.  He gave me a few suggestions and I went on my way.  He would have liked it if I had invested money with him, but what he had to offer wasn't what I wanted to buy.  I gained knowledge and a direction, and he gained a reference.

I understand if I just scared you with this suggestion.  Taking the bull by the horns isn't the way many people do it.  So find what works for you.  Start with a book, take a class, watch a show.  However you do it, make it your goal to shrink what you don't know.  You will be glad you did.

P.S. I do not suggest ever investing money without first understanding the investment, researching the company and being in a position to tie up your funds for an extended period of time.  Make sure you are comfortable with whatever you do.  You earned the money with hard work, make sure you put the same hard work in when finding out how to make your money work for you.

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