Why Investors Need To Think Like Politicians
According to Sari Holtz, investors should start adopting the thinking process of politicians. In this article, we are going to break down her analogy and tell you why is she absolutely right! Let’s get started!
Politicians Are Great Decision Makers
Politicians are truly great decision-makers. They often need to encounter tough situations at work and have to make hard decisions. They cannot make these decisions unless they know the impact that their choices may create. Also, they have a flair for assessing the outcomes of their actions and go with the need for the hour.
Politicians Take Accountability Seriously
When their decisions and outcomes go haywire, politicians take accountability and move on. They focus more on mitigating what went wrong and take corrective actions. You can adopt a similar attitude when you are in credit card debt. More often than not, you will find yourself in this situation when you spend more than you can afford. The only way forward is to accept that you made the wrong decisions and make a plan to come out of this debt. You may have to take some immediate steps like curbing your expenses and avoid more credit to live a debt-free life.
Politicians Are Always Prepare For Unlikely Events
The presidential elections of 2016 threw a surprise when Trump won the polls. Needless to say, most politicians were not expecting this rather unusual result. Trump, known for his economic expertise, was chosen for his radical ideas and policy suggestions. Investors had to rethink their investment choices in the stock market. Trump advocated lesser imports, and thus ingenious domestic companies saw a rise in their share prices. Stock market investors should always be prepared for extraordinary situations. The market is dominated by both external and internal events. Investors must always have a plan B to cushion themselves from losses. Another option is to invest in mutual funds. They are managed by experts who have an in-depth knowledge of the market.
Politicians Know How To Great A Great Plan
Every leader who runs for a significant office has strong beliefs. She prepares a list of policy changes that define how her term is going to be. Smart investors also chart out a financial plan for their future needs. The best is to list down your immediate and future financial goals. For instance, your five-year goal could be to buy a house. Retirement should always be a priority for your long term goals. Once you figure these goals, start accumulating money for them. Also, saving alone is not going to create wealth. You will have to consider investment options to account for your best returns.
Politicians Are Great At Negotiating And Persuading
One of the most crucial abilities of a successful politician is her ability to negotiate with her colleagues. At times, politicians also have to negotiate with their international counterparts for favorable outcomes. You will be surprised at how negotiations can get you desirable results in your own life. For instance, you can negotiate with lenders for better interest rates when you want to avail of loans. More lenders would agree for lower rates if you have a positive credit score. Negotiation can save you a few thousand in certain cases like a home loan. Similarly, you can negotiate for a lower interest rate if you are unable to repay your loans.
This brings us to the end of this discussion on why investors need to start thinking like politicians. Now, let us know about your thoughts on the same.
