In the world of finance, dealing with financial risk is a topic that we do not think gets enough shine or coverage.
With all the new ways to make money today, from Bitcoin to other cryptocurrencies and investing, most financial coverage does a great job of talking people through how to make money but seldom do financial information providers discuss risk to an adequate degree.
In light of this, we want to use today’s blog as a way to shine a brighter light on financial risk and showcase a few particularly potent strategies that we believe in for managing and dealing with risk surrounding your money.
Here we go.
First on the list, maintaining an emergency fund. Many of us are taught from a young age that it is important to divide any money we receive into different groupings – for spending, for saving and for emergencies. This lesson is no less important to handling and managing financial risk as adults, because maintaining some kind of stash for money to be used in only emergency situations will make it much easier to operate with “useable” money you have now because you should never be worried that you cannot function monetarily on a day-to-day basis knowing you have “fallback” money available when needed.
Next, we believe that researching financial trends, news and information constantly is a good way to manage, prepare for and handle financial risk. There may be no better way of understanding and truly appreciating financial risk and how to navigate such risk than doing your own research. As the saying goes, “mastery comes after someone practices one skill for 10,000 hours”, and this is no less true for understanding money-related risk. The more research you do on how to avoid and balance financial risk, the more comfortable you will become making important money decisions like what kind of things to invest in, where not to invest, and how much money is worth investing in any one particular place.
Finally, “playing it safe” is a wonderful, despite being lacklustre, way to deal with risk when it comes to your money. Even if you don’t always choose to play it safe, we recommend doing so until you at least make enough money to feel comfortable being a little riskier and taking chances on investments and other available earning opportunities. To that end, we recommend setting a financial goal for yourself (a $ figure) as a benchmark, before which we think you should play it safe with your money and after which you can put that already-earned money into a safe place before moving on to the more risky areas of finance.
Anyways, that’s it for this blog. Let us know in the comments below what you think of these ways of handling/dealing with risk.
Now, if you were already confident in your understanding of financial risk as an adult, we imagine you probably clicked this blog to give your child a way to learn about handling money-related risk as they come of age. If that’s true for you, we encourage you to go beyond the words on this page and visit our website here to sign your child up today for one of our personal finance programs.
We’ve got nationally and internationally-acclaimed programs in this area for children in grades one all the way to grade twelve, covering topics from the basics and history of money to the stock market and global finance, that we trust and believe will give you a way to help your child get on a path to superior financial literacy both in the present and in the future! Check them out today and sign your child up as soon as possible!