It's the year 2021, and it's guaranteed that your portfolio is not your grandpa's portfolio.
There have been many sweeping changes to the financial industry in the past several years, with new technologies coming out and morphing into even newer technologies all the time.
This means, by definition, that your grandpa's financial strategies are also going to need a serious overhaul if you hope to keep on top of things in 2021.
While some tried-and-true principles may never change, others have been seriously disrupted recently already and may change again and again in the (near) foreseeable future. This means that, at the meta level, some things need to change in order to be and stay successful in today's financial world.
Formulate an "agile" investment strategy
The "agile method" has been catching on in many different industries. It's very simple at the conceptual level, actually.
In a nutshell, you pick a reasonable starting point for investing (meaning, you formulate an initial plan), without overthinking it. You start executing that plan, but here's the key point: at regular intervals (perhaps weekly or bi-weekly in this case), you continue to analyze and iterate.
This requires, naturally, lots of commitment on your part, but it's actually not as time-intensive as it sounds. Since you are constantly on top of things, each analysis can be minimal.
Always have an emergency fund
It's a disruptive world out there, and most people are sorely underprepared for any bumps in their road to financial success. Avoid being counted among those people.
It's, of course, impossible to plan for every contingency or unexpected expense that may come up in the natural course of things. That's why it's important to be prepared.
Ideally, you will put at least 20 percent of everything that comes in after taxes and other deductions towards an emergency fund. Aslo, ideally, this will be an ongoing tradition. You will find that the more financially successful you get to be, the bigger the potential emergencies will be.
Automatically track your portfolio
One good piece of news about the current environment for investing is that we have access to tools our grandpas couldn't even have been able to dream of. These days, there's more than one great solution for staying on top of what's going on with your personal finances.
A good portfolio manager should feature the following:
- Real-time tracking of assets
- Integration of DeFi and cryptocurrency
- Multiple currency support and real-time conversion
- The ability to manually enter values if needed
- State of the art privacy and security (this is not data you want public, of course)
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