Focus On Your Own Economy

Focus On Your Own Economy

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According to Jim Rogers, any economy that saves and invests and works hard always wins out in the future over countries which consume, borrow and spend.

Many of us tend to be fearful about investing due to pessimistic news about fragile economies in Europe as well as possible global double-dip recessions. However we don’t have any control over any of these global issues.

The above quote by Jim Rogers does not only apply to global economies, but also to our very own ‘personal economy’. It is critical that we rather focus on our personal economy, as this is where we can actually make a significant impact on our lives and the lives of our families.

What are your spending habits?

Are you working, saving and investing like a German or are you consuming, borrowing and spending like a Greek?

Monitoring and managing your own economy is essential to personal success, and is much more valuable than worrying about the economies of the world which causes stress and irrational decisions. Regardless of the size of our personal economies or the size of our monthly salaries, we need to ensure that our economy is at all times more like the German’s as opposed to the Greek’s.

If you are working, saving and investing, congratulations and I hope you keep it up! If you are consuming, borrowing or spending, you need to relook your personal economy before it collapses! Consider ways to reduce your monthly expenses. A few of these expenses could be luxuries which you could honestly do without. An alternative is to think of ways to increase your monthly income, possibly working part time on weekends or further educating yourself which should enable you to earn a higher monthly salary. Do you have liabilities? If so, make a plan to pay them off quicker than expected.

We have zero control over what the market does but we do have control over what we do with our finances. Start focusing more on your own economy and stop worrying about the global one.

Andrew Padoa
Andrew Padoa works in the Private Client’s division at Consolidated Financial Planning. His area of expertise is investments, estate planning, retirement planning and portfolio benchmarking. He has had numerous articles published in the media on a number of topics related to personal financial management. Andrew is passionate about educating people and has given several financial literacy talks to both schools and corporates. His objective is to use his abilities and knowledge to help others achieve their financial goals. Visit www.consolidated.co.za for more information