R-I-S-K -- thanks to the economic crisis, we have new respect for those four simple letters.
The ability to effectively manage financial risk has only one basic prerequisite: You must acknowledge that there is a chance something will happen and its financial impact is not something you can accept or afford. That's it? What's the big deal? The big deal is that we rarely, consciously, acknowledge the financial risks in our lives or the tools we use to protect ourselves from them.