Last week’s US Presidential election produced one of the biggest political shocks in living memory when political novice (and noted loose canon!) Donald Trump claimed victory over his rival, Hillary Clinton.
While the economic fallout from his surprise victory remains uncertain, there are two clear lessons from the election result that can be applied to how you manage your money:
1. Emotional decisions are not rational decisions.
Taking into account the political experience, personal history and behaviour of the two Presidential candidates, few would argue that Donald Trump was the rational choice to lead the world’s largest economy. Voters seem to have made their decision based on emotion (fear, frustration, disappointment, anger).
Unfortunately many of us also rely on emotion rather than logic when it comes to money, whether it’s deciding how we spend it (buying things that we don’t need, or to keep up with the neighbours), or how we invest it (selling investments based on short term fears about the market).
Always think before you act – just like an election, knee-jerk decisions on financial matters can have long-lasting consequences.
2. Complacency is not your friend.
Mrs Clinton and the Democratic Party seem to have seriously underestimated the mood of the American people and the ability of Mr Trump to succeed. Whether you are running for President, running a business, or simply managing your money, complacency is not your friend.
Knowing your numbers, examining your options and having a clear plan will provide you with the best opportunity for long-term financial security. The less you leave to chance, the more certainty and control you have over reaching your financial goals.
Do you want to make the most of your money but aren't sure where to start?
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