Take charge of your financial future today

There’s little that’s greater

than the right kind of data

To help us on our way


To make decisions that’ll save our day

When we no longer earn

so we don’t live forlorn

But what’s best and what holds true

I just don’t know what to do …

This week I was involved with a mega-conference on big data. Sounds so very drab and dry, doesn’t it?

Far from it. It was about life. About our planet. It was Eye On Earth – a global forum that’s delving into what information is usable, credible, being gathered, or not, and how to bring it all together in a way that makes sense and helps us with decisions about our health, our lives, about how we interact with Mother Earth. Of course I’m simplifying.

So if you think your life is complicated, then think about the task facing the people dealing with all this.

I’m sharing this because I’d like us to think about the issue of our own data – information that feeds directly into our financial well-being.

Our future financial security and peace of mind depends on things we decide – starting today.

What information are you gathering about your life, habits and spending? What to invest in and what not.

What are you doing with it?

You see, data is only as good as the intelligence we glean from it. And that’s only as valuable as what we act upon.

I once met someone who showed me – with great pride – the app that he was using to track his spending. He had been doing it for two years in fact. But he had done nothing with it.

What’s the point of that?

It’s really important to have the right sort of facts available. And then to use them in a way that leads us to informed decisions that we actually make.

Many of us make poor decisions, or no decisions. This can be because of too little or too much information – decision underload and overload respectively. We all know that when we’re overloaded, we’re overwhelmed, and what many of us want to do is just curl up in a corner until it’s safe to come out. We are paralysed. Not having enough information also robs us of our ability to make decisions too – because we just don’t know what we should or could do, so we do nothing.

What we need is information that’s easy to use, and for it to be used.

So if both too little and too much is bad for our financial health, what’s the “right” amount?

That’s a difficult one.

It depends on you and what you already know. It depends on your priorities and life objectives. But here are a few general pointers:

Research: find out sources of information that are right for you – this will depend on your level of financial and investment knowledge.

Differentiate: between fact and opinion. Don’t take on board what other people say – especially when it comes to forecasting. Did you know that so called “financial gurus” get their predictions wrong more times than if you’d tossed a coin to make a decision? CXO Advisory Group, an independent market research firm, studied predictions made by 68 respected, well-known self-proclaimed stock market forecasting gurus – and looked at how often they were correct. It was 47 per cent of the time if you averaged them together. So when it doubt, do nothing – or toss a coin.

Be methodical: write down your objectives. Prioritise them. Write down choices. Measure them against your objectives and priorities – every time you want or need to make a money decision.

Make a decision: one of the problems is that we’re living in a world where financial tools were created primarily from the perspective of marketing departments geared towards selling products – rather than to provide us with the best financial solutions for each of our unique lives. If you don’t understand what you’re being told or offered, ask again. If you still can’t make sense of it, walk away.

What we need to navigate is this:

– Data does not equal information.

– Information does not mean knowledge.

– Having knowledge doesn’t mean we know what to do with it.

– The right kind of data gives us opportunity and new perspectives.

– For us to reach our full potential, we need the right kind of data, that we can measure and act upon.

– We act upon what we value. And we value what we measure.

I realise I haven’t helped with a list of, say, specific financial information that should or could be gathered, a lot of that depends on what your aim is and how you plan to get there. But the foundation of all this is most certainly keeping a chunk of the money you earn, and knowing how your financial decisions are serving your longer term plan.

The right information at the right time – to make the right choice – for you.

Nima Abu Wardeh is the founder of the personal finance website cashy.me. You can reach her at nima@cashy.me and find her on Twitter at @nimaabuwardeh.

Follow us on Twitter @TheNationalPF

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