Financial Decision Making

I find it fascinating how much the media and general trends affect our decision making processes. I often see this clearly exemplified on the ASX (Australian Stock Exchange) where retail investors often follow the trends, and one media article can cause a huge swing in buying and selling behaviours.

I understand that when it concerns their hard earned cash people get scared. They may be wanting to follow the crowd if they're feeling nervous about loosing money, or worrying that they might be missing out on a huge opportunity if they don't act quickly. The funny thing is that sometimes these trends are purely based on speculation and rumours, and could potentially be fake news spread around so someone could make a profit.

We saw this with the Telstra (ASX: TLS) share price recently. Although there were in this case some cold hard facts regarding a dividend reduction and lower than expected annual report profits, everyone suddenly went scrambling to get Telstra shares off of there hands as quickly as possible. This resulted in a very noticeable drop in share price, which in turn prompted others to sell, often at a loss.

While this was happening plenty of online sites were spreading speculation that the share would never be the same again, which further added to the growing alarm towards the future for Telstra shareholders. I don't know what will happen with Telstra, but I do know the good financial decision making is now more important than ever.

It's important when making any financial decisions that you fully understand the implications of what you're doing, and are comfortable with the risks involved. Don't just sign a contract because your friend recommended the product without doing your own research first. Similarly if you're putting money into an investment, make sure you understand who is holding your money, and whether they are regulated or not.

Here are some important points to consider when making a financial decision:

  • What are the risks, and do they outweigh the potential rewards?
  • What a the management and performance fees (if any)?
  • Is the company regulated by APRA or ASIC?
  • Where are the funds held, and what security do you have over them?
  • How and when can you get your money back?
  • What will be the tax implications of any gains made?
  • Does it sound to good to be true?

All the best, 


June 2017 Letter

Hello Again,

Well, it has been another action packed month, full of new beginnings and exciting changes. I’m working hard to keep everything balanced and making sure I don’t neglect things that I’ve committed to. So in the spirit of learning and personal development, I have a lot of interesting articles to share, that may be of some interest to you.

How I Use Ambition Mapping To Navigate The Labyrinth Of Life - Zak Slayback

"When you’re playing with a magazine, you can throw the game down and walk away, but when you are playing in life, if you walk away, you stay the course with the path you are on."

Apple CEO Time Cook’s Secrets to Success and Happiness - FEE

“Measure your impact on humanity not in lights, but on the lives you touch. Not in popularity, but in the people you serve.”

The Essential Education: If You Had 10 Years To Learn Anything, What Would You Do? - Scott H. Young

"So in this I’d like to engage in a speculative fantasy. If you had ten years, with the ability to support yourself on a modest stipend, how would you give yourself the best self-education in the world?"

You Don’t Know What I’m Going Through (and vice-versa) - Jaquelle Crowe

"Compassion says: I see your life, but I know I don't have the whole story."

Top Investors Share What They Love (and Hate!) About Your Startup Pitches - Foundr

"For many entrepreneurs, there will come a time when they must stand up in a boardroom filled with investors, and convince them all that their startup pitch is so clever, their plan so tightly crafted, that it is worthy of a stack of cold, hard cash."

What It Means To Be Educated - Blake Boles

"We leave school, and few of us go back. We forget the bad experiences and glorify the good ones. And then, after 10 or 20 years of adult life, we decide that it’s time to send our own kids to school. But if we are to clearly assess the reality of school, we must see clearly. And to do this, it helps to listen to those who have worked on the inside."

Professional Side Projects VS Resume - Praxis

97 Actions You Should Take To Become The Person Companies Want To Hire - College Info Geek

Yes, It Is A Virtue To Reject Charity -

"Don’t craft your life around the idea that everyone or anyone is morally obligated to help you when you encounter misfortune."

12 Ways To Repurpose Your Content To Generate More Leads With Half The Work - Allie Decker (Foundr Magazine)

"Content is the present and future of marketing. It’s the spearhead of inbound marketing, and it’s a strategy that continues to beat out traditional marketing efforts in both efficiency and effectiveness."

I’m 17 - Kate Simonds TedTalk

“Think in years, work in months, and live in days,” as leadership expert Peter Voogd puts it.

As always, I’d love to hear from you, so feel free to throw me a line.

Yours Faithfully,