Posted by siteadmin on Wednesday 7th August 2019.
One of my favourite quotes is from the American investing legend Warren Buffett. The Sage of Omaha as he’s been dubbed due to his financial wisdom said, ‘Risk comes from not knowing what you’re doing’.
Given his track record of decades of success, he’s not someone I’m going to argue with. He invests billions into businesses, which could be viewed as a very risky thing to do. But he clearly knows what he’s doing and so the risk is as a result, greatly reduced.
It’s the same thing when planning your financial future.
Over the twenty-eight years or so that I’ve been in this business, I’ve seen both ends of the scale of people’s approach to risks.
Some people are so cautious that they won’t even think about planning ahead as they consider it ‘too risky’.
Fear is a real factor at this end of the scale. Fear of loss. Fear of change. Fear of slipping out of a comfort zone. Fear of the unknown perhaps.
Others are so gung-ho that they want to plough ahead with very risky strategies without undertaking any form of due diligence or research. For this group, it’s often a fear of missing out and quite frankly, a fear of investing in professional help or even doing the hard yards of research.
The key as with most things in life is to strike a happy balance. Not taking any action is a bigger risk to your financial wellbeing. As is being blindly optimistic.
There is a risk to everything we do. Even crossing the road.
For someone like me with limited do it yourself know-how or patience, even putting up a shelf would be considered risky in my household! That’s why I call in professionals who have that know-how and expertise.
Knowing what you are doing, or at least working with someone who knows, greatly reduces risks. And boosts your chances of success. Just ask Warren Buffett.