You work hard for your money. Very hard. And so the last thing you want to do is hand it over to the wrong person. Today, Susan Fujii explains how to choose the right people to trust with your money.
Craig Ballantyne
"The best investment you will ever make is your steady increase of knowledge. Invest in yourself. Thirty minutes of study per day eventually makes you an expert in any subject - but only if you apply that knowledge. Study alone is no substitute for experience. Education is always painfully slow." - Kekich #93
People Power: Whom Do You Trust with Your Money?
By Susan Fujii
In today's technology-driven world, you can easily go for days without needing to speak face-to-face with another human being.
Need to get gas? No attendant necessary, just pay at the pump.
Groceries? Use the self-checkout lane.
Need some cash? Stop by the nearest ATM.
Hungry? Place your order online and have it delivered.
I could go on for several paragraphs, but I'm sure you get the idea. It's rare today that we take the time to speak with the
people behind these businesses.
Growing up when I did (ahem, many years ago) in a small, rural American town, this wasn't always the case. I knew all of the bank tellers by name and they knew me. I exchanged smiles and face-to-face pleasantries with the gas attendants and supermarket check out clerks, and personally knew the owners and the staff of every business in town.
I, of course, completely took this for granted and never gave it much thought...
Until a recent conversation I had with a fellow investor friend who was interested in my opinion of a popular investment newsletter.
I immediately told him, "It is absolutely worth your money--I know the chairman and the editor to the specific letter you're thinking of personally and they are wonderful, ethical human beings in addition to having a great track record."
My investor friend appreciated my recommendation, but was surprised that I personally knew the people who wrote the newsletter (this, by the way is very easy to do--I am not famous, but if you go to any investing conference where the person in question is speaking, you can just about always meet them in person and get a true sense of who they are and what they believe.)
This one simple rule has contributed immensely to my financial success and I am positive it will help you, too:
Know the people behind the business.
I am so thankful for my conversation with my friend because I had taken this principle for granted for years, but I firmly believe that adding this "secret" weapon to your investing arsenal will help you become a much better investor.
It astonishes me how many well-meaning investors do some or all of the following:
- Buy a share of stock in a company without knowing who the CEO or Chairman of the Board is.
- Subscribe to an investment newsletter without knowing who publishes it and what their beliefs, values, and track records are.
- Hire a financial advisor to manage their investments without knowing whether the advisor successfully manages his or her own investments.
If I am going to trust someone with my hard-earned dollars, whether it's a company whose stock I am buying or a high-priced newsletter I'm considering subscribing to, I want to know whom I am dealing with...who is the person behind the business?
This is because I don't do business with businesses--I do business with people. (And you should, too!)
This holds particularly true in the investing world where most newsletters, financial advisors, and brokers are not well-established household name brands with 50-year proven track records of ethical behavior and success.
Just who exactly is this newsletter person promising to tell me the secret of "How the strange disappearance of element '107' could make me a fortune next week" or promising to "Double My Money in 2011 Guaranteed..."?
I am inherently skeptical and actually go find out, and I hope you will, too.
Bruce Lee was a famous skeptic, saying,
"There are lots of guys around the world that are lazy. They have big fat guts. They talk about chi power and things they can do, but don't believe it." -- Bruce Lee
Exactly.
A healthy dose of skepticism, particularly when entrusting your money to someone, is a good thing.
Your job is to do the hard work of sorting out the wheat from the chaff, the Bruce Lee's of finance from the Bernie Madoff's, or as they say in Texas, those with cattle from those with "all hat, no cattle".
And
focusing on people is an important part of that equation. When I look into the "person behind the newsletter" I get a very, very good idea of the entire newsletter empire.
Even if you cannot meet the editor in question in person, the beauty (and the curse) of the Internet is that there is a vast array of information available on any person whom you wish to find out about.
A quick Google search will provide you with volumes of information about someone. Many times these authors have been interviewed by text or even better on audio or video so you can get a real sense of who they are as a person.
You can ferret out what they believe in, whether or not they know what they are talking about, whether or not they have similar values to you, and whether or not they are ethical. You can also find out their track record and history and learn what other people think of them.
Important questions to ask before forking over your money are:
- Who is this person?
- What is their background?
- What are they trying to sell me?
- What is their bias?
- What is their track record?
- Will they take the time to educate me or do they only care about selling newsletters?
- Do I believe they are ethical?
- What can I glean about their personal values and beliefs?
- Does anyone whom I trust or know personally endorse them or think well of them?
That may sound like a lot, but truly, with the Internet you can find out volumes about a person in just a few minutes.
The sad truth, though, is that many people will never bother to do so!
Please don't be one of them...
Before you hand over your hard-earned money to someone, first see what you can find out about them and meet them in person if you can.
It's not that hard (it's even fun!) and your wallet will thank you tremendously!
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Ed. Note. Susan Fujii won the I Dare You leadership award back in high school and though the monetary award was tiny, the impact on her life has been huge. To this day she recommends William H. Danforth's book, "I Dare You!" You can learn more about Susan and receive her personal finance wisdom for free at
www.KungFuFinance.com]
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