Are You A Smart Investor?

If you know financial basics, you can be a smart investor.   Those basics include knowledge about money, spending and investing.

#1 – Debt Knowledge

You are a smart investor if you know that debt is a curse.  You understand that debt dilutes any effort you make to invest.   Debt puts you behind financially and never ahead.  You get it, debt is a waste of good money. You will have more money to invest if you stay out of debt.

You are a smart investor if you stay out of debt to begin with.  If you are in debt you make paying down your debt a financial priority.  You stay out of debt by following a budget.  If you need debt management assistance, you get it.

#2 – Spending Knowledge

You are a smart investor if you understand that investing your money vs spending it is the only way to achieve wealth.   You find as much money to invest as you can by living below your means.   You understand the damage you cause to your investment power when you spend more money than you earn.

You are a smart investor if you base your spending on needs vs wants.  You understand the difference between those things you need to live on and those things you just want.    You stay away from the bad habit of confusing wants with needs because you know that leads to eventually make everything a need.

#3 – Financial Planner Knowledge

Smart investor and good financial plannerYou are a smart investor when you understand that you may not know it all and may need help with your financial planning.  When you do need help you seek the assistance of a financial planner.

You know how to pick out a good financial planner.   You work hard for your money so want a financial planner you can trust with your money.     You want a financial planner who will guide you to make the right financial decisions.

You want a financial planner with some experience in investments, retirement planning, taxes and estate planning.   But you also understand that experience does not necessarily mean they will give good financial advice or exercise good financial judgement.

You know that a financial planner is there to address your financial concerns not sell you a product to address your financial concerns.  You do not want someone who just talks a good game.

Sometimes the best financial planners come from referrals; just make sure you trust the individual who is giving you the referral.   You want to interview the planner yourself.   You should interview a few planners to make sure they can perform according to your requests.