Consider also, all those brave men (and women)AbundanceWith Money Reviewwho volunteered to serve in many of the wars we have witnessed over the last century. Would all those who volunteered to become combat pilots in WW1 have done so if they had known their life expectancy was about 17.5 minutes?
More than likely, they didn’t have access to that information, because if they had, they would be able to make a more informed decision. I’m not sure so many would have volunteered knowing they only had an average time of 17.5 minutes to live while in combat. And isn’t that what decision making is all about? Having all or enough information to make an informed decision?
When it comes to finances and investments, how many of us are fully informed through appropriate financial education before making an investment decision. Many rely on media reports or the advice of financial advisers to provide the information necessary in making an informed decision. To make a successful decision requires being fully informed and for most of us that means being educated. And to quote an unknown source, ‘if you think financial education is expensive, try ignorance’.
Financial education is the foundation needed for life. It’s the catalyst for making informed decisions about your financial future. Success comes by making more informed decisions throughout life and that means not relying on others to make decisions for you. Why do financial advisers promote diversification as the solution to reducing risk? Does diversification really reduce risk or is it an easy way out for them to minimise losses? In the words of Warren Buffett “diversification is a protection against ignorance. It makes little sense for those who know what they are doing.”