Creating sustainable long-term wealth is really about how to go from where we are today to where we truly want to be in the future. It's about increasing the quality of our financial future by developing the one fundamental skill that the vast majority of people 50+ have never developed: financial awareness.
The need to be financially aware and literate is often overlooked yet an increasingly important task for all of us. We can never feel confidence about our investment portfolio as long as we lack financial awareness. Our deficiency in this capacity works at a deep level to undermine our financial well-being. This isn’t “woo-woo” stuff: it’s just how awareness works.
Very few people choose to make financial awareness their priority, and that’s why so few people succeed financially. Unfortunately, most people believe this is something we pay our broker or financial advisor to do for us. With this viewpoint, we can never be in charge of our own financial future. The good news is that it's not too late for most of us to take back ownership and begin to develop financial awareness to change our situation for the better.
In our view, financial awareness is the make-or-break ability that determines whether our financial activities will be wasted, or rewarded. If we don't understand how we will make money on investments and we can't see the risks, we certainly will not be able to create sustainable longterm wealth. Without awareness, we always put our personal finance at high risk. One of the fastest ways to lose money is to start investing our money into things we don't really understand.
Financial awareness is the appreciation and understanding of how finance and investment works in the world, and the ability to use this knowledge and skill to effectively manage financial resources efficiently at a personal-level. Our longterm wealth is determined by our awareness, choice, and action. With financial awareness, we know what action we need to take to have an income for life and to able to survive and thrive in any market condition. It’s one thing to know what to do, and it’s something else entirely to get it done. That’s why the capacity to take conscious action with enough consistency and to manage money with awareness are so critical.
In our next blog, we cover examples of the types of investments we are talking about, and having a future orientated mindset.