Have you ever seen a shepherd or a sheep herder? A shepherd knows his sheep, he can distinguish one from another, though, to us all look the same. He understands their individual needs, giving different treatments to different sheep and there by make them follow him.
This is a story told by my leader at work, he once visited rural Colorado, and closely watched a shepherd and a sheep herder. As he narrated, that shepherd boy spoke to his sheep, he knew which sheep to control and which sheep to let loose, even if at times those sheep were a bit way-ward. He conversed with his folks, in different tones and frequencies. He was fully aware of each one of his 500 odd sheep. He could tell which one is sick, which one has injury.
A sheep herder, on contrary, looked in to his sheep as a mass, he had his dogs to help me keeping the order, he was always yelling and shouting to control them. He was ferocious in his task of discipline.
My leader narrated the story in context of leadership, to impart the importance of knowing and caring the people we lead as against of dominating them.
To me, the story is equally relevant to our money. Your money is your own resource, working for you, working for your future needs, comfort and, may be power. You want to hold on to it, the question is by being a shepherd or a sheep herder?
If we think the contrast of behaviors between the two, it is obvious that the sheep herder works and earns his money by taking the sheep to grazing and safely returning them back to the owner.
A shepherd, on the other hand, earns his money and living by selling their wool and probably selling his sheep for meat, he raises his sheep, he breeds them, he takes care of them. Sheep obey their keeper on their own, not out of fear.
How this story applies to your money?
Simply putting, we all need to be a shepherd to our money. Your professional certified adviser is nothing but a sheep herder. He probably knows better than you on various investing strategies, he had seen many investment successes and failures in the past, way more than you did.
It’s advisable to seek a financial adviser’s help time to time, but your need, your wage, your priorities and the market conditions change too often to hire an expert every time. But your money deserves shepherd’s treatment!
To maximize your money’s potential, you need to keep up with it. You should know everything about each one of them. If you had invested in a mutual fund, you need to know how the MF is doing in this market, you need to know main constituents of the fund, whether the companies still makes good profits. You need to know what is latest Morningstar rating of the fund, you need time to analyze fund’s past performance as well.
You can’t fully utilize money’s potential unless you are aware of these things. Because, only when you are informed about all these, you can make decision to buy more or sell of or hold on to that particular investment.
Even if your investment is doing great, you should still look at its competitors, are they doing better? I had a savings account with HSBC, but I got better rate from American Express, I switched my entire amount over to AMEX. I still, am looking for even better rates than what AMEX is giving to me.
Start with understanding what you need to manage about your money
The very first step is to know where you are and where you want to go. I put together few tentative points, every one should consider to start with in their money management journey.
Once you complete these steps, you know where you are and where you want to go with your money. Now, at this point, comes the hardest part, where you should be determining how you will meet your money goals. This is where the skill and experience comes in to play.
Few points on what ideally be your next steps.
More money you save, more investment you can make, more secure will be your future and post-retirement life. Remember, in retirement, that steady flow of money through your paycheck won’t be coming!
Unless you know your money now, you will probably have no clue on where your money is going, and where you will be in future, you won’t know where you can pull the strings and prevent the out flow.
when I started putting efforts to understand my financial health, so many ideas on saving money and making it grow at a higher rate started pouring in to my head., that I was really confused where to start and what should be my priority, but now I am in full control of my money.
You don’t need to read for hours on tips and techniques to save money, or invest wisely, all you need to know is how you are spending your every cent., and how your investments are growing. Tips and tricks naturally occurs once you start monitoring your spending and investing patterns.