Kelvinwright's Blog

postmodern thoughts

Father’s Day – what advice did your Dad give you about money and finance?

On Father’s Day it seems that we could all learn a little from our Father’s generation: Work hard, save, and diversify our savings. A lesson that it seems everybody from speculators, business leaders, bank directors, even country leaders seem to have either forgotten or ignored.

 

An article in the Wall Street Journal today (http://online.wsj.com/article/SB10001424052702303822204577464383029488856.html)

states some simple advice from business leaders and what they learned from their Fathers (using the word simple loosely here, given the rather big hole that many countries have dug themselves into).

 

Never get into debt. (It seems that many people, companies, and countries threw this one right of the window).

Money doesn’t grow on trees – you have to work for it and save. This goes hand in hand with the previous advice on debt. Why bother saving when everybody offers you quick credit?

Invest in education. As a Learning & Development expert, this one is true to my own heart. It could be said that this philosophy applies equally to parents investing in their own children’s education; young adults training themselves, choosing their vocation, and becoming responsible for their own learning; companies seeking to develop their talent; and countries investing in education, from schools to universities.

Diversify savings – don’t put all your eggs in one basket; be that basket the stock market, a bank account, a house, a holiday home, or under the bed. A lesson that Spain suffered when people took on mortgages they could never pay off, all in the hope that their investment would provide a fast return and quick riches with minimum effort. For some it worked, for many it didn’t. It all ties back to the first rule on debt and the second one on saving rather than borrowing.

Hard work is necessary. It’s a shame that many people have forgotten the work ethic. The idea of get rich quick and speculation does not fit in with this advice.

 

So there we have it, not so much the answer to get us out of this fine mess, but the solution to make sure it never happens again, assuming that is that we get another opportunity.

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June 17, 2012 - Posted by | Uncategorized |

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