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The Right Person to Look After Your MoneyBy
Monday, July 15, 2013
This is one of life's biggest questions...
Answer this question right, and you could live a life of peace and happiness as your wealth steadily grows.
Answer this question wrong, and you could end up broke, like the victims you see every night on CNBC's American Greed.
He didn't make many bad decisions in his incredible life. But I questioned one decision he made when I'd just graduated from college...
You see, right after college, I became a stockbroker... And after a few months on the job, my dad transferred a good portion of his financial net worth over to me to look after.
I didn't understand my dad's decision...
I was flattered that he trusted me like this... But I was overwhelmed. I didn't want to do anything wrong. Also, I knew there were more experienced people at my firm who should have been able to do a better job for him. So why me?
I didn't get it decades ago... but I get it today...
In short, today's headline is a bit of a trick.
The right person to look out for your money is YOU.
The longer it takes for you to figure this out, the more money you will lose.
Nobody cares more about your money than you do. And nobody will look after it better than you.
When I say that YOU are the right person to look out for your money, I don't mean that you have to do all the research and trading. You can work with brokers and insurance agents. You need to rely on experts, of course. What I mean is this:
You can't give up knowing what's going on with your money.
My dad didn't just turn over his money to me blindly. He was very active with me. It was fun. We discussed every decision... every trade. We talked about the markets regularly. We talked about every single thing we did before we did it.
That's the way to do it... you don't just do things blind, because someone says so. That's how you end up getting hurt.
You see it every day... In the news, you hear about pro athletes and rap stars going broke because they weren't looking out for their own money. It's their fault – they made a choice to not be responsible. They made a choice to pay someone to handle their money for them. And too many times, giving up responsibility cost them everything they have.
Instead, you should do your research and talk about this stuff. Don't just throw your hands up and give up responsibility.
My dad didn't give up his responsibility. He knew what was going on with his money. He made good decisions about his advisors. And he stayed on top of what they were doing. (We really learned this when he died suddenly. He had his act together, with excellent records and paperwork... That's something I need to do a better job of for my family.)
Not all of his money decisions were great, of course. He had a bit of a speculative streak, and my mom would give him a hard time about the ones that didn't work out. (He deserved it!) But that's fine... because in the long run, my dad made the only "right" decision that he really needed to make with his money.
He knew that the only right person to look after his money was him. And he knew that that didn't mean he had to do everything himself...
What it means is, you can't ever give up knowing what's going on with your money. Nobody will look out for your money better than YOU. Don't forget that...
Good investing,
Steve
Further Reading:
If you're going to look out for your own money, there are some important rules to understand about the market. "Learning first – and not doing anything stupid with your money" – is exactly what new investors should do, Steve writes. And every investor – experienced and novice – should learn these nine rules. Find out what you NEED to know to be a successful investor here.
Porter Stansberry says most folks "will never make money in the stock market." The problem is that few investors know anything about valuing a stock or bond. "If you don't know more about the value of something than the person who is selling it to you," Porter writes, "the chances of you profiting from the transaction are extremely close to zero." Learn more here.
Market NotesNEW HIGHS OF NOTE LAST WEEK
Cigna (CI)… insurance
Progressive (PGR)… insurance
Johnson & Johnson (JNJ)… Big Pharma
CVS Caremark (CVS)… drug store
Cisco (CSCO)… networking giant
Adobe Systems (ADBE)… software
Microsoft (MSFT)… software
UPS (UPS)… freight delivery
MasterCard (MA)… credit cards
Discover Financial Services (DFS)… credit cards
Pool Corp. (POOL)… swimming-pool supplier
Target (TGT)… retail
Macy's (M)… department store
Lowe's (LOW)… home improvement store
AutoZone (AZO)… auto parts
1-800 Flowers (FLWS)… flowers
Netflix (NFLX)… movie rentals
La-Z-Boy (LZB)… furniture
Starbucks (SBUX)… coffee
Hershey (HSY)… chocolate
Pepsi (PEP)… soda
Krispy Kreme (KKD)… doughnuts
Tyson Foods (TSN)… meat
Buffalo Wild Wings (BWLD)… beer and wings
Domino's Pizza (DPZ)… pizza
Crude oil
NEW LOWS OF NOTE LAST WEEK
Hatteras Financial (HTS)… virtual bank
China Southern Airlines (ZNH)… giant Chinese airline
Teck Resources (TCK)… diversified mining
Newmont Mining (NEM)… gold stock
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