Delving into the world of personal finance is a complicated thing.
Like starting anything in my life, I have the tendency to dive in head first and sort out the details later. By definition, I guess that makes me an impetuous person. I like to think of it as reaping benefit as soon as possible.
But personal finance is like another beast. Jumping in full force landed me surrounded in confusion. One thing I've noticed over my few months of reading is the seemingly never-ending list of acronyms. IRA! 401K! IPO! CD! Then add in the relative subject of healthcare and you toss in things like PPO and HMO to the list. It's enough to confuse even the most deductive of people.
All in all, if you're a completely green coming into this personal finance game, it can seem somewhat daunting. Finance forums are littered with topics such as "How should I diversify my 401k? How safe are small cap international stocks?" It's like drowning in the ocean while you're trying to figure out what water is.
Anyways, I think my point is, personal finance is important. And it takes time. I've been reading for months and I'm just now starting to get the foggiest idea of what people are talking about. If you were to ask me something basic like the difference between a Roth IRA and a 401k - or even something like a high yield savings account vs. a CD, I probably would have to make something up to make myself sound smart and hope you don't catch me in my moment of deception.
Thinking about this makes me wonder - how many people in this country actually DO understand personal finances? Or do they just hand over their accounts to financial advisors and let them have at it?
Acronyms and Such
December 12th, 2007 at 03:41 pm
December 12th, 2007 at 04:24 pm 1197476651
December 12th, 2007 at 04:39 pm 1197477574
December 12th, 2007 at 05:38 pm 1197481121
However, it would be good to be a little careful and not be too hasty in your financial decisions. To me, this is more like a game of chess (except it's not a game). You want to consider all the possibilities before making a deliberate move.
Of course, I say this while admitting that I too am an impatient person.
Investopedia.com is a good place to go looking up a term you're not sure of. You can search the terms out, and it explains it using everyday words.
December 13th, 2007 at 03:56 am 1197518214
Use your questioning to your advantage. You have a great BS detector. Invest or use a financial product only when you understand it. If someone's explaining a "product" to you and its not clear to you, assume they are the problem and not you.