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As long as we live from hand to mouth, we will never gain control over our money and will not be able to plan for the future. In addition to that, the temptation of spending money that we haven’t earned makes good money management almost impossible.
The salary we earn should first be saved then spent on essential needs before the non-essential wants. We should aim at having a surplus of money left after paying off our needs and wants which we can save for rainy days. We should avoid spending more than we earn.
Incurring liabilities should be done responsibly for long term assets and we should ensure that we still possess the assets even after paying off the debt.
It can be very difficult for someone not having the right knowledge to keep up with the rapidly changing financial products or services, laws and economic changes in general.
We can get information on finance from various sources: the internet, newspaper articles, radio, television and advertisements, but this information does not always relate to our personal financial situation.
Professional advice is most valuable when one is going through a big life event like starting a family or purchasing a house. Professional advice is also essential if, for example, one is taking out a mortgage, or planning for retirement.
Seeking financial advice can be important, but not every situation calls for comprehensive, ongoing financial advice. When purchasing a financial product or service, one may ask the financial service provider for factual information about different products and strategies to make an informed decision according to one’s needs.
For example, if someone is buying an insurance cover, he may ask the salesperson/ broker/ agent for the relevant information. Similarly, if someone is buying shares, he may ask the investment dealer/ adviser for specific advice. The information one gets can be useful and sometimes free of charge depending on the situation, but it can also contain an element of bias as the service provider might only give information which is relevant to him. This is why it might also be important to seek independent financial advice according to one’s situation or project, but this can entail additional costs.
General advice does not take into account someone’s particular circumstances, such as his objectives, financial situation and needs. For example, if an adviser gives him information about a product that might be suitable for him, but does not take into account his overall financial goals or actually recommends him to take up the product, it is a general advice.
One may additionally wish to seek advice from an investment advisor licensed by the FSC Mauritius for specific information but must ensure that the service provider is duly licensed by the FSC. A register of licensees can be found on the FSC’s website www.fscmauritius.org.
If someone wants a recommendation that takes his personal situation into account, he may need personal advice.
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