Essential financial management personality traits

In managing our finances to create wealth for ourselves and our communities, we need to develop certain essential personality traits. These traits are like habits; as we continue repeating the associated behaviours, they become a part of our personality. Good habits can be learned, and bad habits unlearned.

The most important trait is optimism, a positive outlook on life. An inner assurance that things would get better if we apply the right mix of wisdom, skills and diligence. To invest sufficient time and resources in wealth management, we need the optimism that our efforts will deliver the desired results.

Next is ambition. If we do not have ambition, we would not be motivated to change our status. Ambition is not a lack of contentment, it is not greed. An ambitious person knows that she can do better than what she’s doing now. Instead of settling for mediocrity, she is thankful for what she has but diligently pursues a better tomorrow. However, we must be careful not to become over-ambitious. Once we start sacrifices our values, relationships and priorities in the pursuit of wealth, we have crossed over into greed and materialism.

We also need patience, otherwise we become victims of get-rich-quick schemes. We must realise that building lasting wealth takes time. Foundations must be laid to develop multiple streams of income that would continue to deliver consistent dividends even after we are dead. Lottery earnings averagely last less than five years because they are not built on any foundation.

In building our wealth, we must be deliberate. Poverty is the default setting of human beings. Anyone who wants to be blessed and be a blessing must have concrete plans to achieve this. Budgeting, financial planning, investment planning must be done regularly. This involves being organised with one’s finances, keeping good records and being up to date with news affecting our investments. Certificates, title documents, contracts and tax records should be filed appropriately for ease of referencing.

The next essential virtue is diligence. In order for us to have wealth to manage, we must be working hard to create the revenue streams. Even passive or residual incomes require initial hard work. Diligence is an essential part of wealth management. To apply diligence, we need passion. Not all of us are blessed enough to enjoy the work that we do, but I have learnt that if we think deeply and appreciate the value our work adds to society, enjoying it becomes easier.

Wealth managers must be disciplined. Savings for instance, requires that we are disciplined in sticking to our budgets and financial goals. It demands that we sacrifice today’s pleasures for a better tomorrow. Discipline is under-girded by optimism. A person who does not believe she can achieve financial freedom in the future would not be motivated to sacrifice today’s pleasures.

Walking hand-in-hand with discipline is prudence. Exercising due diligence before making purchases, making price negotiations a lifestyle routine, always ensuring we receive value for money by paying only what a product or service is worth, are essential behaviours for any prudent steward of resources. Extravagance is only permitted when giving to charity or honouring loved ones.

For wealth to be created and profitably managed, we must be risk takers. But no risk-taking should take away our sleep. If we have investments that give us sleepless night, we have moved outside our risk appetite zone and should probably divest from such investments. Remember, “the higher the risk, the higher the return” and “nothing ventured, nothing gained”.  So, let’s take educated risks properly undergirded by effective risks management.

In order to take calculated risks, we need to be well informed and skilled. Therefore, we must keep ourselves updated with relevant information and be well equipped with tools for effective personal finance management. We do not need to know everything. We do not need to become experts (even though that is not such a bad idea). But we do need to have sufficient knowledge of the investments we are making personally. We should acquire the necessary personal finance management tools and software to make a good success of ourselves.

Most importantly, we need humility. No man is an island. We need the input and support of others to achieve our financial goals. Therefore, we must maintain a humble attitude and deal with people with respect and dignity always.