While there are plenty of people willing to give you financial advice, the ones you should actually listen to are few and far between. It's good practice to listen to accredited financial advisors when it comes to money matters. However, that doesn’t mean you can’t learn a thing or two from people outside the financial world.
For clarity, we’re not saying the following tips are any form of financial advice you should act on. They’re simply nuggets of information that could help you make better financial decisions. So, who are these financial advisors and what ideas of theirs are worth thinking about?
1. Gamblers: Manage Risk
All experienced gamblers live by one fundamental rule: bankroll management. In layman’s terms, they bet specific amounts based on the size of their bankroll. Let’s say someone wants to play Slingo games for real money. They log into a popular online casino such as Paddy Power and scroll through the list of options.
They settle on Slingo Fire & Ice and have £500 in their bankroll. General wisdom states that you shouldn’t bet more than 5% of that money in a single session. So, based on this, they can ante up with £25. The game’s betting options start at £0.20, which is a good place to start because it allows you to make 125 bets.
Experienced gamblers stick to the tenets of bankroll management to account for something known as variance. Put simply, results fluctuate. Therefore, to account for the ups and downs, gamblers use bankroll management to ensure they're always betting conservatively. You can adopt the same approach to spending in everyday life because you never know what's around the corner.
2. Mathematicians: Run the Numbers
Mathematicians can teach us a lot when it comes to finance. In fact, virtually every salient financial concept out there is based on mathematical principles. Understanding percentages and compounding is important if you’re investing. However, one concept that we can use in everyday life is statistics.
Specifically, being able to analyse statistics can help you make better decisions. As noted by FCA-regulated RockWealth, statistical analysis of historical data can help you “assess the probability of adverse outcomes”. In simple terms, looking at historical trends can help you avoid future mistakes.
3. Politicians: Invest in Knowledge
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The final financial outsiders we could learn a thing or two from are politicians. Yes, we know that people are often sceptical when politicians speak, but there are times they say something smart. One politician who said something smart about money was Benjamin Franklin. His financial insights have extra weight because he was also a polymath, scientist and inventor. Basically, his ideas were based on logic.
That’s why we can take from his famous quote, “an investment in knowledge pays the best interest”. Essentially, the more you know, the better your chances of making sound decisions. Knowledge is power, particularly when it comes to money. That’s why you should educate yourself, consider as many variables as possible and get advice from trusted sources. Do this, and you’ll have a better chance of making money work for you.