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Growing Up: Financial Implications


If we take a look at the normal pattern of growing up, we should begin on the day that we are fully emancipated from our parent's financial support. It is when we start packing our things and moving out from our parent's house. We finally attained a great deal of freedom, however that freedom also comes with great responsibilities. Responsibilities such as apartment rent, car payment, school payment, car loans and others. We probably have many aspirations and ambitions in mind, like buying a nice car, owning a house, taking a vacation or even starting a family of our own. We would be living our life to the fullest along with its pros and cons. The distant future may be too remote to be considered as a priority especially that we are still learning how to balance our finances.

Now a days, many young adults don't take time to understand how to invest wisely. In many cases, this is because they are more concerned with the here and now, and not the future. There are many things that we can't live without such as Starbucks, iPhone, iPad, Clubbing, Flat-Screen Televions, and many others - luxuries that most of our grandparents never heard of. In this article, we would start working on our meager resources and explore different ways to invest wisely to prepare ourselves for the future.

Step 1: Getting Started

Investing is a journey and not a one time event. In every journey, we need to prepare because this could be a long and arduous one. First, we have to know our investment goals. Ask yourself first these questions: What are my short and long term expenses? When do I plan to retire? What resources will I need? How much money do I need? How long will it take for me to get to the position, where I could say I am already financially independent? The strategies and plans that you make will all depend on the investment goals you have in mind.

Step 2: Do Homework

Money Personality: Who Are You?


Most of us have different views regarding money. With these views, we arrive at different results in how we respond to our emotions about it. We sometimes stumble before we arrive at a rational and sound decision for its proper management. Like almost everything in life, our decision about money is largely dictated by our very own personality. Money personalities help explain our different views and behaviors towards spending, saving, investing and managing our finances as a whole. It is also a strong indicator of how intelligent we are in handling money and in controlling the different risk associated with it. Knowing and understanding our personality towards money, we will be able to reach our monetary goals and be able to lead a financially independent life. It is the first step in our journey to achieve financial reform. Based on my readings, there are many types of money personalities but we could sum it all up into five. We should label them as the: Flashy Spender, Meticulous Saver, Shopaholic, Debtor, and Intelligent Investor. So what's your money personality?

Flashy Spender. With the word flashy, these spenders have a demanding preference on highly recognized and expensive products. Flashy Spenders prefer spending their chunks of money on nice cars (such as BMW, Mercedes, Lambhorgini and others), new gadgets, branded clothing and many others. They love to stand out of the crowd and make a statement. They are superior, as what they think of themselves from the rest of humankind. Basically, they are pretty much comfortable in spending money extravagantly. When income doesn't meet their spending habits, they don't hesitate in borrowing money from others. They don't fear debts. With this kind of personality, big risk in investing is inevitable.

Meticulous Saver. A total contradiction from Flashy Spenders. Meticulous Savers are highly meticulous in spending every penny of their money. They have a cautious preference on cheap and discounted products. They love to close a good deal on products which they think had saved them a few cents and feels good afterward for such an achievement. They only shop when it is necessary and avoid using credit cards. They are not fond of following the latest trends and remain contented with what they have. They save every hard earned penny if they could, like turning appliances that are not in used as an example. They hate debts. As much as possible, they don't want to be in debt. With this kind of personality, they usually control risk when it comes to investing. They approach their investments in a conservative manner by not taking any big risks.

Shopaholic. A term that most of us are very familiar with because it is not just written in books but aired on the television and even made into movies. We refer Shopaholic as a type of money personality who derives emotional satisfaction from spending money. In short, they are money spending addicts. They can't resist spending money on products that are usually not necessary. They are aware of their addiction, and the catastrophe that it entails however, they are powerless about it. They consider spending money as a hobby and also as a diversion especially when they are in a down state. With this kind of personality, investing is based on impulse. They usually arrive at irrational decisions in investing because they are clouded with emotions. They are usually prone to making risky investments.

Debtor. Debtors don't have a clear understanding of their asset and liability flow. Basically, they have more expenditures than their earnings which results to a pile of debts. Like many other money personalities, they don't have a satisfactory level of financial literacy. They have no idea of how much money is going in and going out. With this kind of personality, they don't put much thought about investing and reducing money outflow. They are usually on the run in order to keep up with the debts that are constantly and gradually growing due to high interest.

Intelligent Investor. A rare type of money personality. They have a good understanding about the meaning of money. They have a satisfactory financial literacy and because of this they know how to manage money. They are constantly aware where money goes in and money goes out. They seek financial independence through passive investments. They borrow money but only if it is necessary in purchasing investments. They are not afraid of risks because they know how to control it. With this kind of money personality, they don't purchase a product based on impulse but with sound decision and judgment. They only spend on necessary products that have a long term regard. Meticulous decision making is an evident trait of this kind of money personality. Hence, It is our goal to become an intelligent investor.

Being able to know our money personality, we are on our way to self-awareness. Through this, we could be able to address the challenges that our money personality presents. It is not an over night process to achieve full awareness however it is Money Digest's goal to support you along the way to become an Intelligent Investor.