Kaleem's Blog

Hopefully, you are healthy and working in a job or doing a business. You are earning satisfactorily and generally, have enough for the month. You have some savings for rainy days as well. You are married and have growing kids with growing needs.

You don’t worry much about your routine expenses, although it’s tight. But when it comes to achieving your long-term financial goals e.g. buying a house, if you don’t have one, kid’s education and their marriage, etc, you don’t have a clear vision. You don’t feel as energetic as you used to, in your 30s and 40s. However, your routine expenditures are increasing and your major financial goals are approaching fast.

Understanding what constitutes financial risk and what doesn’t, can be extremely empowering. Many people, while being reckless about money, honestly believe they are taking risk which, in their reckoning, is a prerequisite for winning big. On the other end of the spectrum, it is often confused with volatility, some degree of which is inevitable, rather healthy.

Let’s discuss various dimensions of financial risk.

I have recently retired from a government job. About 5 years ago, as the retirement was nearing, I started thinking about my personal finance and how I should go about planning my retirement. I spent hours reading the material available on the subject. My main source of research was the internet. I keenly observed the financial behavior of people around me. I also looked inwards and critically reviewed my relationship with money. I thought about how I had taken the important financial decisions during my working life. Whether my decisions had stood the test of time or not.

The history of money can be traced back to a time when one of the early humans received a product or service from a fellow human and reciprocated with another product or service. Money continued to change with the evolution of humans up to its present form. It started with a simple barter, passed through various shapes including stones, pieces of metal, stamps, paper, and has now reached fiat and cryptocurrencies.

Whenever you are executing a complex operation e.g. surgery, flying an airplane, or constructing a bridge, it is extremely important to follow a system, a process, or an organized way of going about it. This is what Atul Gawande has outlined in his book: “The Checklist Manifesto”.

Personal financial matters are no different. If you want to avoid financial accidents and want to smoothen the ride through your financial journey, a checklist offers a good solution.