The ways to succeed with money – Part I

Left to my own devices, I will often hunker down with a book and bury myself in the midst of the invented worlds, the science of the body, or the life of an interesting person.  While I may wish to be out with friends and community, I will default to where I am most comfortable, in my own head.  Therein lies the problem.  Without the interaction of other souls, without the input of those that I care about, I will tend to be myopic and – while comfortable – I do not grow.

And, your money, how does this apply?

I know that my clients are intelligent, caring and perceptive.  They will use the knowledge that they are given by mutual fund companies, their 401ks, and what they read in books and on the internet.  They take what is available and use it to the best of their abilities.   And, ofttimes, they do not succeed.  Why might this be?

There are many reasons why they might not succeed, and I’ll lay out a few of them and how you might overcome these issues.

1.  Information Overload :  Have you seen the plethora of information available out there?  From the internet to every self-help money book to the myriad of white pages and prospectuses that every mutual fund company and retirement plan sponsor will provide?  The amount of information that is shoved at you every moment is fairly overwhelming.  Have I mentioned that it can also be conflicting, as well?  You can read a newspaper article one minute, and the next something said on the news is telling you the exact opposite opinion or information.

WHAT DO YOU DO? Find a few trusted sources of information and stick with them.  And, ignore the rest of the hype.  Do you realize that the stock market is not run on facts, but on emotions?  It is true.  It is not the FACTS that a company publishes that changes the markets, but the reaction to those facts.

For example, say XYZ Widget Company says that they have developed a doodad that will eradicate cancer.  The stock of that company will start soaring, even though the doodad is not yet in production and has not had the opportunity to affect the profits of the company.  What if, the next week, the XYZ Widget Company now declares that it was a mistake, that the doodad was faulty and will not be produced?  Now, the stock of the company starts to plummet – again, without anything having actually happened.

The markets are run on fear and greed, not fact.  So, ignore the hype and pay attention to the few sources that you have determined are trustworthy and reliable.

2.  Not all the information:  Most people do not realize that there are more available options in which to invest than just stocks, bonds and cash.  There are products that are available only when you work with a licensed financial advisor, and are never discussed on CNN or Bloomberg.  There are investments that will provide stability or diversity to any portfolio, and will not be discussed by the sources that bring you information.

Many of the sources of your financial information have a vested interest in ensuring that you purchase their products.  With your 401k, your insurance agent, your broker – they are all aligned against you.  Yes, I said it – against you.  Their job is to sell you their product.  I am not saying that there are not some great people in all of different industries, for there are.  However, their boss [the insurance company or the wirehouse] is adamant that they sell you their products, so that they can be profitable and survive.  There is nothing wrong with being profitable, unless it comes at your expense.

WHAT DO YOU DO?  Your guide to money should be aligned with you.  That person should have a philosophy of caring for the client first and themselves second.  How do you know?  Ask them, read their propaganda, follow your gut instinct.  See, they must care first about how you are helped and how you thrive before they care about how much money they make.  If the person in front of you seems slick and makes you a little uncomfortable – you know that “icky” factor – then thank them, leave and interview another advisor.

What else makes it so that you might not succeed?  There are a few more pieces of this that are still missing, and I’ll discuss them in my next blog.  Until next time, dear readers.

May you be happy, healthy and full of the abundance of this life.

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