¿Who said that there is a minimum to seek financial education?
I think we’ve all heard the saying that “every journey begins with a step” or one of its derivatives, well why when it comes to financial planning do, we want to start the journey at the final destination? Remember, when it comes to finances, we are not running a race, we are in a marathon and we must focus on the finish line, not the starting point.
Now if the size of your current wealth still worries you, always remember the great Warren Buffet, considered one of the richest men on earth and perhaps the greatest investor of all time, he started his empire with 6 stocks of an oil company now disappeared. His fortune today reaches a value of billions of dollars, the vast majority achieved by stock investments.
Another well-known myth that is related to our first example is:
“When I get a salary of XXXX, I will start to invest”
When these two things happen, first, life takes many turns and we do not know if we are ever going to reach that amount of money, for example, we find ourselves with a crisis like the pandemic, we are left without a job and we have to start from 0, or the opposite, we work hard, we receive several promotions, accompanied by juicy salary increases, but without realizing it we also increase our expenses, so we decide that if we receive another big raise we will take care of our finances, but the cycle continues, or worse there still comes a time when the salary does not increase anymore, during all that time we forget that investing is only part of the equation, personal finances also require planning, budgeting, control of expenses, insurance, savings, among other things, that we don’t need salary increases to start doing.
There is another reason not to, which is more of an excuse than a myth and comes from small business owners and new entrepreneurs:
“Everything I earn I’m going to invest it in my business”
In the first place, financial planning does not include only investment, and secondly, it is poor risk management due to the lack of diversification that leads to compromising situations in the future. What happens if the year sales fall due to external situations? As has happened in recent years due to COVID, or simply the product or service they offer is no longer in demand, as happened once with internet cafes at the beginning of the century, small entrepreneurs find themselves in the difficult task of reinventing themselves, starting a new business, or looking for a job, almost immediately and without much planning, each of the above has its own problems and difficulties, while if proper financial planning was carried out, with risk control and exposure management, It not only has significant capital to personally face bad economic times but also a possible source of income that can help us survive during a possible business closure.