Measure to earn, analyse to earn more

There’s a high price to pay for not paying attention

- Dhirendra Kumar

Business guru Peter Drucker has been quoted as saying, “What you cannot measure, you cannot manage.” Of course, Drucker is a consultant for big business, and in contrast to what he says, many small and medium-sized businesses do very well based just on the strength of the entrepreneurs’ instincts. For running a small business, instinct is just a different way of measuring, but in the subconscious.

Be that as it may, I’m quite sure that this instinctive way of operating does not work with investing, at least not for the ordinary saver. In investing, it’s always true – without exception – that what you cannot measure, you cannot manage. Put simply, if you don’t have a fairly precise understanding of your various investments and assets, it becomes very difficult to meet your life’s financial goals. What’s worse is that you won’t know whether you will meet them or if you have systematically thought through those goals.