Before you reach that point, it’s helpful to get a sense of your overall risk tolerance. No matter what you do in your financial life, there is always the possibility of losing some money. How comfortable are you with this possibility? The following questions are meant to get you thinking about your general attitude toward risk:
- Do you get bored easily? Are you usually looking for a new challenge, or do you like to stick with what you know?
- Do you feel confident that you can handle whatever comes your way, or do you tend to worry?
- When you lose something valuable, do you get anxious and obsess about it, or are you able to accept the loss and move on?
- How easily can you turn important matters over to others? Do you trust experts to act on your behalf, or do you prefer to handle everything yourself?
Knowing how to manage risk is one of the prerequisites of financial literacy. Once you’ve fulfilled all the prerequisites and become fully literate, does financial freedom follow? Not necessarily. Certain personal obstacles can prevent even the most financially literate from developing abundant wealth. Despite all their knowledge, they’ll continue working full time just to pay the bills instead of living the life they dream. By learning to recognize these personal obstacles, you can overcome them. What are they?
- Fear
- Cynicism
- Laziness
- Bad habits
- Arrogance
- Disappointment
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