This weekend, I’m taking Kim Snider‘s class again as a refresher. I love to listen to Kim speak. Her personal history is very interesting, and the knowledge she passes along about “the way the real world works” is absolutely fascinating to me. She made a point this morning that I want everyone to understand:
If you walk up to a Ford dealership to look at cars, you fully expect to be met at the door and be told how one of these fine Ford vehicles will meet your needs. In other words, you would never expect to hear, “you know, I really think a Toyota would be better for you.” This is the exact same situation with the financial services. The people working in that industry are there to SELL you something, not to look after your money with your best interests in mind. The problem is that many people do not understand this! There is the ILLUSION that these “advisors” want to help you, yet they are usually a salesman that are paid on a commission.
All of the mainstream media (the magazines you see on the newsstands, the TV shows) are trying to sell advertisements. The advertisements are for brokerage firms and mutual funds. The TV shows feature people that offer something exciting or controversial or promising. All the hot tips, buy recommendations, predictions, etc should all be taken within context… somebody is trying to sell you something.
This is in stark contrast to the academic world. There are mountains of academic literature published that contrast the mainstream media message. This world has been saying stock prices are a random event and you can’t accurately time the market for about 100 years.
Anyway, the point I want to make is that investing your money is a very important matter. It is one more of these tasks that we are “too busy to do” in our drive-thru lifestyle. If you are blindly trusting someone else for your long term financial stability, then I invite you to listen to Kim’s story. Also remember the situation that the employees at Enron were faced with, or even look at what is about to happen to all the GM union workers that thought they were about to retire with full UAW benefits. Surprise!
A successful investment mechanism is part of getting your own life in order, being responsible for your own family, and being prepared for what your future likely holds. I hope everyone I know and everyone who reads this will take on this responsibility for themselves, because it is probably one of the most important tasks you need to do.