They leave a message for me to call them back, but I never call them back. Normally, their message would be something like this:
So, this is one of the calls I got yesterday, I get very similar calls from the other two of my brokerages. The messages are pretty much the same, they are desperate to build a relationship with me and introduce me to other products and even help me manage my portfolio.
They sound very friendly, almost like if they are my friend or want to be my friend. I get at least one call either on my cell or home number about once a week or two. Sometimes they would call my home and I would hear the answering machine record the message and then 10 seconds later my cell phone would ring and the same guy leaves the same message.
I could simply pick up the phone and talk to them and listen to what they have to say. But I choose not to even answer the phone. Why is that?
Well there are couple of reasons apart from I don't like to waste my time:
1. I like managing my own money and investments
I like managing my own money and investments. It's like part of my life chores, like eating, sleeping, exercising etc. Taking care of my own money is as if I'm taking care of something important that has consequences on my life and well being. Yes money is that important as it allows me to live a good and satisfying life. So, why wouldn't I take care of it myself? Why would I trust someone else to take care of something that can affect my life in a very personal way?
An investment advisor or a consultant working for a big investment company or a brokerage, their first most job is to bring more business to their firm and earn high commissions. The way they may do this is by selling you high cost investment products or managing your investments and then charging you some percent of your portfolio's value or assets under management.
They may make money for you, but it would be at a much higher cost than if you had done it yourself. This added cost eats into your returns which adds up over time and becomes a much bigger drag for your overall return. This is probably one of the main reasons why active management has lagged low cost index passive investing for the past several years.
I need my money to work for me as hard as it can. And the only way it can work that hard is if I take charge of it and cut down investing cost to bare minimum by investing it myself. This is the only way I can maximize my returns. Think of investing cost/fees as friction that eats into your returns and over time this friction only gets bigger.
2. Nobody would care more about my money than myself.
That is a fact. If I can't take care of my own investments or money and instead pay someone else to manage it for me then I'm simply telling myself that I can't be trusted with my own money and it would be better if someone else manages it for me, even though they may not have my best interest at heart.
3. I've worked very hard for the past 25 years (including college years of low paying manual labor jobs) to earn and save the money that I have now, and I look at this money a result of my hard labor of all those years and it is therefore have become a very valuable resource that now buys me options in life.
Option to live where I want, option to provide a good life for myself and my family, option to quit my job and do whatever I want (which I did last year), option to not answer to anyone or be a slave to a paycheck, option to have an even better future, and many many more great options.
So why would I outsource management of such an important resource to some stranger who doesn't even know me, let alone pretends to have my best interest? Would you let some stranger manage your life and your future and then also pay them a hefty fee for that? Think about it!
Having someone else manage your money is like handing over control of the most important resource in your life that you worked so hard to accumulate over many years and possibly decades.
As long as I'm capable and have the brain power to do simple math, I can manage my own investments and money matters, and so can you.
4. They say they have years of experience in financial matters. I'm sure they do. It is not their expertise that I have an issue with. It is their intent that I don't trust.
Also a reasonable level of expertise in financial or investment matters can be achieved by anyone, it simply takes some time and effort to learn the fundamentals of various investment vehicles and how to best use them for your benefit. We live in an information age where we can learn about anything we want by accessing thousands of documents and books on the subject and at our finger tips. Heck you don't even have to go to college to become an expert in something. So, what is it that keeps us from learning about money or investments?
Almost everyone seems to be good at and enjoys spending money, but when it comes to managing their money or investments, they freeze. They say they don't like thinking about money. Well they like spending it, so what's so hard about paying attention to what they are doing with it?
I think it has to do with lack of motivation, drive, and discipline. Fear of losing money may also be at play here, but I think in many cases it's simply the first three things I mentioned: motivation, drive, and discipline. Fear can be overcomed with better understanding and some hard work. But, if you don't have the first three things (motivation, drive, and discipline), then yeah, you are better off handing over your money to a stranger or spending it all before you lose it.
5. I hate to be dependent on others, especially when it comes to money matters.
Sure, there are times when we all need some help or have to be dependent on our family and friends to get us through life. But that is different from handing over your hard earned money or investments to some consultant at a big firm who is pretending to be your best friend.
Yes, money helps enable the future you want, it is a fact. If you don't believe me, just look around you. How did you buy that nice house, that nice car, or that vacation in Bahamas, or that college tuition for your kids? It's all bought or paid by money that you earned over the years. Similarly, what you earn and save or invest now will provide for your future 10, 15, or 20 years from now when you can't earn anymore. .
How did you earn money or accumulate all those things you have that you enjoy? You went to school/college, you busted your rear end in measly starter jobs, you learned new skills by putting in late nights at work, you sacrificed your personal and family life, you built a career. You did all that to earn money, so you can buy all that stuff that makes your lifestyle and potentially pays for future lifestyle. And finally now, you have your own TV remote control. Without money you wouldn't have any of that, including that TV remote control.
Money matters and life without it can be quite miserable, ask anyone who is doing two or even three jobs just to make ends meet.
|Nobody is taking my remote from me|
So why the hell would you give control of the most valuable resource in your life to someone else? Why wouldn't you spend a few hours to learn how to manage money, how to spend wisely, and how to invest?
If you say you don't have discipline or time or inclination then you are simply saying you don't care enough about your future or your family's future and would rather not worry about it. You would rather drift through the financial abyss, not understanding what's going on with your money/investments or who is taking advantage of you. That is fine as long as you understand and accept the results that would be handed to you by a stranger many years from now.
As for investment advisors and consultants, I'm sure they are good people and they have to make a living too. Though, I am not too worried about them making money as they will have ample opportunities to serve people, especially the ones who can't handle money/investments or simply refuse to learn to manage it themselves.
It's just that these advisors won't be making any money from me or taking my financial control, I can guarantee that. They will keep getting my answering machine or voicemail in the foreseeable future and I will continue to ignore them.
P.S: If you absolutely need help with your money or investments, then look for an advisor or expert that is not tied to any bank or investment/brokerage firm. An independent or a fee based advisor will charge you an upfront fee for his/her unbiased advice, but even then ask them whether they earn any commission based on your investments as that would be a measure of how unbiased they are in their advice.