Understand Money – How to Manage Money

It always amazed me growing up how much my father knew about money and finances. Even to this day when he is nearing retirement, he knows more than almost every person I’ve met. He is still planning and evaluating his portfolio, always tweaking and always adjusting. He’s continues to make regular contributions to his retirement fund and never misses or is late with paying his bills. He knows how to manage money.

Part of me thinks that my interest in proper money management stems from his passion for it. When I was younger I would continually probe him for information from his past. I asked him how he knew when to change certain funds from low risk to high risk and vise versa. Before the market crash in the late 1980’s he successfully avoided a loss by adjusting his portfolio a few months before everything hit the fan. He did so in early 2000 and again before this most recent downslide. When tens of thousands of people were losing half of their savings and losing their homes he managed to protect all of his portfolio and pay off his mortgage in 15 years.

Is it luck that my father has always avoided losing money during these tough times? He isn’t an investment advisor or a banker nor does he work as a stock broker. In fact his career for close to 40 years was as a manager for a department store. How has he always known when to make changes at the right time? He has either been going to the only fortune teller that isn’t lying or he knows more than the average Joe. I’m guessing the later.

My father’s financial interests began when he worked as a teller at a bank when he was a teenager. The job required him to read enough about how to manage money so he could properly answer any questions that customers would have. He only worked there for about five years before changing careers. What he learned in that short amount of time he carried with him for the rest of his life. He made some mistakes along the way but because of what he knew, he understood how to fix those mistakes and minimize the damages.

Since the time that my father changed careers over 40 years ago, I don’t think he has picked up a book on finances. Having said that I’m certain he read more in that half decade than most people read in 20 years. The beauty about personal finance basics is that they really don’t change. The simple formula’s involved with interest or inflation or the dividends have remained the same for ages. The more you read the more you will know how to manage money.

Knowledge is everything. By reading as much as you can or even just a little you will learn how to manage money. If you spend a couple hours a week informing yourself with this blog and by reading some recommended books you will understand the trends involved with investing and will avoid the devastating losses. There aren’t too many things more important than making sure your finances are always in order. The more you know the more you will save.

Check out these books. I would highly recommend them to apply to your financial life.

“The Wealthy Barber” – Written By: David Chilton

“Automatic Wealth” – Written By: Michael Masterson

“Think and Grow Rich” – Written By: Napoleon Hill

“The Automatic Millionaire” – Written By: David Bach

Happy Reading!

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