Inspired finance: investing in turbulent times

On a day to day basis very little seems to change when it comes to our ‘financial health”, and yet we are bombarded with news about what is going in the world. Recently we have been inundated with comment about Greece having to borrow money to pay back debt. Prime Minister Cameron, the prime minister of Britain, has warned that times could be tough. President Obama of the USA has had to institute measures to stop a major crisis. 

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How does this affect each of us? Firstly, we must accept that the world is facing massive financial challenges and the risk of economic fallout is higher than we have seen in many years. But so what, there is nothing we can do about it. Whilst few of us are able to alter the “big picture” each of us can make sure we manage our own affairs correctly.

If you are in the fortunate position of having disposable income, that is, money left over after having paid all expenses, the best way of spending the balance is to pay off debt. Pay off the credit card, the account at your clothing retailer, and if possible, pay off your mortgage bond. Getting rid of debt is the best savings you can make. Imagine waking up every morning knowing that you do not owe anybody anything, what an amazing feeling of independence. If you are able to have no debt then the events in the economy have very little influence on your lifestyle and well being.

Once you have paid off your debt the next step is to invest your money. The way to make money in the markets is to buy low and sell high. That means that one should take advantage of opportunities that occur when there is turmoil in the world economies and markets are under pressure. Every time one reads the newspaper or watches TV and hears how bad things are we should be content that that is the best time to invest. There is so much “noise” being broadcast that the real situation is often ignored. If you have disposable income and have reduced your debt take advantage of the opportunities that present themselves when markets come under pressure. In a few years time you will look back and say “if only I had invested more."