and invest at these lows. This market will come back. Remember, five years after the Great Depression, the market was up over 200%.
What criteria should someone use in deciding whether they need a financial adviser? What is the best way to go about finding a financial adviser?
When you hire an adviser, you are hiring the intellectual capital of the person regardless of the firm they are with. You should seek an adviser with meaningful experience, someone with extremely high integrity, someone who respects your money, someone who has a definable view of the market and someone who will listen to you, not the firm that they work for. Trust is important, but do not confuse trust with capability.
No. 3 of the Black Enterprise Wealth for Life principles says, “I will effectively manage my budget, credit, debt, and tax obligations.” For someone looking to pay down and manage debt, what should be the first step? Why?
The first step should be to understand your debts and how you generated them. Take a credit card, look at the outstanding balance and write down what you spent the money on. If you do not know, then you are likely not focused enough on your spending patterns.
In this instance, the first step to reducing debt is to understand your spending tendencies so that you won’t run it back up. The second step is to segment debts into long term and short term, then by interest rates and finally by maximum payment amount. Third, you want to first pay down short term debt with the highest payment amount to increase cash outflow. And lastly, pay down short-term debt with the highest interest rate and finally, you want to begin to pay-down longer term debts. However, do not pay down all your debts and be left with no cash to protect yourself in case of an unanticipated event.
Financial experts often say “pay yourself first.” Why is this important? What is the best way to do so?
Paying yourself first means making sure that your business (you) is receiving compensation as you provide compensation to the businesses of others (creditor and service providers). It is important because if you pay out every dollar to creditor or service providers, you’ll never get ahead. You are simply living day-to-day without consideration for your future or future generations. The best way to do it is set a number — hopefully no less than 5% of your net income — that you are going to pay yourself. Then follow instructions outlined in question No. 1.
How can someone go about finding financial opportunity amid the economic slowdown?
Many people are scared right now so they can never see opportunity because their mind focus is on not losing any more — fear. The key is to gear your mindset for opportunity and create a mental profile of what types of opportunities you know you can access. Ask yourself these questions:
What am I most interested in. What excites me and what am I best at?
What area do I know