Drizzt: The Money Diary deals with tips and strategies to make better decisions with your money. It also deals with caveats/pitfalls in managing personal assets, debts, income and expenses.
Most of us are often not trained to provide financial advice or understand financial planning from the on start. That is why we turn to a financial advisor to provide us so that we can gain clarity to make better financial decisions.
While I often do not hear of financial advisors falling into debts and not coming out of it, or financial advisors going bankrupt, I am not sure if poor financial decisions takes place even among those we least expect from happening.
Here is an article I cam across in the New York Times where a financial planner and author shares his deep shit story of how he lost his house. From this article, we can learn a few things:
- The ramification of bad financial decisions can be very lasting, and affects the well being of your family, yourself physically and mentally.
- If you make a bunch of bad decisions, came to terms with them, make sense of them, you can go on and write a book about them.
- Some financial advisors get into the industry not knowing much about financial planning and through the system teaches them about selling more than anything.
- Having a nice income makes you fall into the zone where you think you can afford a lot of things.
- When the crowd is doing a prevailing thing such as making dangerous financial decisions, you tend to irrationally follow the crowd, because it is safer to be with the crowd.
- Borrowing 100% and not thinking about the terms of the loan and what are the pitfalls.
- Borrowing against the house to finance their lifestyle.
- Their lifestyle exploded and on the hindsight, he thinks a lot of that lifestyle can be foregone.
- Projecting current price growth as the long term average growth.
- Risk is an arbitrary concept, until you experience it.
- Evaluate more the consequences of a decision you make rather than the probability of it happening.
I embed the article here for all. I am probably not the guy with the most financial planner friends but have you guys hear similar stories of bad financial decisions made by people that really are in the business of providing these advices?
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