At a recent workshop hosted at Workland Vabaduse, a financial expert Kristi Saare shared invaluable insights on mastering financial wellness to a full house of eager learners. From the correlation between financial stability and overall happiness to essential pre-investment steps, Kristi's knowledge provided attendees with actionable strategies to take control of their financial futures. Here’s a breakdown of the key takeaways and insights she shared during the workshop.
Why Everyone Should Prioritize Financial Wellbeing
Kristi emphasizes the profound correlation between financial stability and overall happiness, health, and longevity. With conventional retirement systems facing challenges and personal responsibility for financial security on the rise, it's necessary to set meaningful goals and understand the components of success within reach.
Kristi says, "There is a pretty big correlation between the state of your finances and your level of happiness, your health and life expectancy."
Essential Pre-Investment Steps
Before diving into the world of investing, it's crucial to lay a solid foundation:
1. Debt Management: Prioritize paying off high-interest debt to avoid financial setbacks.
2. Emergency Fund: Build a safety net to cover unexpected expenses.
3. Education: Invest in learning about financial markets, investment vehicles, and personal finance management.
4. Budgeting: Conduct an inventory of your financial situation and establish a sustainable budget.
5. Habit Formation: Cultivate healthy financial habits that support your long-term goals.
Kristi gives more food for thought, “It’s essential to ponder about different questions – if money wasn’t an issue, what would you do differently in your life? What is more important to you, more time or more money? What’s the definition of rich for you? There are several components to success - which ones can you impact the most?"
Navigating Investment Options
Pension funds serve as a reliable starting point for many investors due to their tax efficiency and long-term benefits. However, selecting the right funds is crucial to maximizing returns.
Kristi highlights, "The number 1 investment return killer is taxes! Retirement funds, obligatory and voluntary, are usually the most tax efficient investment vehicles since governments want to support long term pension savings!"
For retail investors, the default strategy often involves investing in low-fee global index funds consistently over a prolonged period. While this approach may seem straightforward, it’s essential to consider individual risk tolerance and long-term goals.
Balancing Risk and Reward
While investing offers the potential for financial growth, it’s not without risks. Kristi emphasizes the importance of distinguishing between bad investments and bad decisions and the necessity of acquiring knowledge and experience to navigate various investment opportunities successfully.
She wisely states, "The more hands-on you wish to be, the more time and knowledge is needed to get good results. This applies to all – stocks, funds, real estate, loans, bonds, land, wine, gold, diamonds."
If you want to get a peek of her own portfolio and speak Estonian, then look here!
Closing Thoughts
Kristi leaves us with a powerful reminder: "I have yet to see anyone regret getting their finances in order. Everyone regrets not having started earlier."
In conclusion, investing in financial literacy and adopting sound financial practices is not only empowering but essential for long-term financial security and overall wellbeing. By incorporating Kristi Saare's insights and advice into our financial journey, we can confidently navigate the complexities of investing and pave the way toward a brighter financial future. Remember, the key to financial success lies in education, discipline, and a long-term perspective. Start today, and reap the rewards tomorrow.
