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Personal Financial Lessons We Can Learn From Greece Impact / Grexit

Posted By ravikumarnama 1077 days ago on Finance

http://www.myinvestmentspub.com - Greece!!! A great country with rich history, with lot of international tourist spots, with beautiful crystalline seas is now struggling with economic disaster. Greece joined Euro club in 2001 with full of confidence in economic boom in their country. But after 2008 financial crisis, everything is changed for Greece. It is now one of the poorest and most indebted countries in the world. Greece has now left with €315b worth of debt to international creditors, unemployment at 28% and -ve growth GDP. What are the reasons for Greece debt crisis? What financial lessons one can learn from Greece Impact / Grexit??Reasons for Greek financial crisis:1. Because of the member of Euro club, got loans at cheaper rates and borrowed huge money to manage country's finances.2. Economic reforms were totally ignored and used the total money on public spending3. Huge corruption and Tax evasion4. Maintaining single currency, Euro and the monetary policy is not under control of Greece, but shared with rest of Europe.Financial Lessons We should Learn from Greece Crisis:Lesson 1: Don't bite more than you can chewThe first lesson that every one should learn is don't spend more than your earnings. Suppose you earn two hundred bucks a week. Would you spend 600 that weekend? Probably not. You need to spend within your earning limits, lest you accumulate billions of dollars in debt like Greece. Spending more than earning is always dangerous.Lesson 2: Budget wiselyWhen budgeting, make sure that your total savings for investment should be at least 25% of your earnings and your total expenditure should not be more than 50% of your earning. Before investing, you should clearly identify your short-term and long-term financial goals and attach an appropriate investment product with each financial goal. Taking financial expert's advise would make your budget more accurate with your financial needs.Lesson 3: Regular Monitoring of Your InvestmentsYou should keep an eye on your investments and you should make a review at least once in 6 months. Continue with good performing assets, get rid of with bad performing assets and replace them with good assets. Diversify your portfolio on basis of your fixed income, returns and risks.Lesson 4: Avoid Reckless BorrowingThis is applicable to both Individual and Companies. Many Banks and NBFCs are lending personal loans with less documentation and quick delivery. This flexibility luring the people to take the personal loans or Credit card loans for un-necessary things. As long as you are getting regular income, there will be no problem. But once you are defaulted on any month, the interests will be piled up and finally you will be end up with huge debts like Greece.Lesson 5: Be Your Own AdviserThis is one of the Warren Buffett's top 10 successful mantra to Investors and a best Personal lesson we can learn from Greece tragedy. Many people make investment decisions based on other people’s opinions. This kind of an investment is the most risky investment and we are not even considering the inherent risk of the option chosen here. The investment option chosen by a friend may be best suited for their lifestyle and future plans. But that does not necessarily make that option a good fit for you. So think for yourself, seek clarity on your goals and then make a wise investment choice.Conclusion:There are some really great lessons to be learned from Greece's economic downfall. Most of these seem pretty simple and like common sense, but I am sure there are ways that make these hard to grasp and implement. Just look at everything Greece has done or is doing, you can find what we should do and what we should not do in your financial life. Live with your means.

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