Free Tools Available to Manage the Personal Finances
Many errors in personal finance can be prevented. But first, people need to understand what they ought to do”, says the Nobel Prize Winner and economist Robert Shiller. It is true that many people bet in markets and do investments that they do not understand. They follow the advice of friends that boost about their expertise. How could it happen that so many prominent personalities have got trapped in the Madoff case? They just handed him over their assets because they heard from others saying that it must be a safe and profitable investment.
Education and common sense are needed
The People need to be able to make up their mind independently. They should learn about the basics in financial markets, personal finance and investments. Why? Independent and competent advice is rare. The big rating agencies have failed. They have valuated the assets that have turned out to be toxic with a Triple A. They are not independent because they are paid by the borrower of the money, not by the lenders. The clients also may not rely on the advice of their banker, even if they know him for years. The portfolio adviser at the bank is not independent. His target is not to make the bankers client rich. He has at first to achieve the turnover targets of the bank. His bosses tell him which and how much securities he has to sell to his customers.
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Tags: personal finance