Bank of America report says Americans are feeling more Financially Secure
What is Financial Security?
Before I give you a definition of financial security, I honestly think there is enough vocabulary out there to confuse the average investor and things should be a lot simpler. This is where you need to realize why financial education is so important. With so much financial vocabulary, or as I prefer mumbo jumbo, it gives financial advisors and financial planners a great way to confuse the public so that they can easily take money out of the hands of financially uneducated people.
Financial security is simply measuring if you are in state where you don’t have to worry too much about money. When you sit down at the end of the day and think about your investments, do you feel secure with what you have? While the markets can definitely have an affect on your confidence (the Lehman shock definitely hurt the confidence of many), are you financially responsible enough to not have to worry about your finances and investments? Do you have enough money in your high interest savings accounts, mutual funds, stock market portfolio, bonds, and other investment? Are you secure in terms of insurance, estate planning, and other emergencies?
A recent Merrill Lynch Affluent Insights Quarterly found that 41 percent with investable assets of over $250,000 said they were better off than last year. The stock market helps as we’ve seen positive gains the past couple years after the market plummeted in 2007. Sure the market has recovered and is doing quite well in my opinion, considering how our economies worldwide are still struggling.
What you can do to feel Financially Secure
Becoming financially secure cannot be done overnight unless you win the lottery or get a nice inheritance. It requires planning and discipline. In addition, you need to review and adjust your plan according to needs and how the economy and your life are going. You could always seek out a reputable financial advisor or financial planner to help you out, but they will charge a fee, take commissions from your investments, or a percentage of the assets that they manage for you.
This is often ok since their expertise will sometimes outweigh the fees, but it could also backfire. If you can and have the time, learn how to take care of your own investments and financial planning so that you can be in full control of what happens. But remember, this means that you can’t blame other people for the mistakes that you make. Tomorrow we’ll take a look at some of the steps that you can take to become financially secure. This is by no means a complete plan but is a good start.
Rainbow Bridge, Japan photo by J.Loov on Flickr.
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03 November 2010
