Saturday, October 8, 2011

Poor Budget Balancing

I mentioned in a previous video and want to talk about it here...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Education and knowledge seems to be the big key here. If one is lacking in these two then they will only see a few choices and they can well be all poor options available. But when one is more aware, it opens up

When presented with a choice we need to keep in mind that not only will it give an immediate answer to whatever problem we are needing to overcome but it can also open and close further choices down the road. This simulation person maxed out their credit cards and made some poor choices while they were middle class. That made their life in the poor class be that much harder.

That carries over into investing and trading too. If you are putting 50% of your account into a trade then you might win big. Or you might lose big and when you do you now have a drastically smaller account and you realize you made a poor choice both figuratively and literally. Your available options and choices of how to proceed in future trades could be changed and reduced. One example is blowing up your account and losing enough so that you cannot meet the margin requirement of whatever you are wanting to trade. For dividend investing it could be having all or too much of your portfolio in one stock. That dividend gets cut, now you have to sell shares and live of capital gains to pay your bills making next month's pressure upon dividend income harder to achieve.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others.
I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

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