Top 5 reasons you should not listen to finance professionals
When managing your finances its very tempting to take advice from finance professionals. Its easy just to blindly apply their advice and not think about your money. This is a very common attitude towards personal finance matters. However, I think this is wrong, everybody should think about their own money because no one else will do that! Here is the top 5 reasons why:
5) Only you know your life situation
Financial advisers rarely have the time or interest to really get to know your life situation, spending habit etc. This causes the advice they give often be substandard and not really optimized to your life.
4) What they really want is to make money for their companies, not you.
All financial services companies are there for profit, they are not charitable institutions. Whatever happens they will have their profits one way or the other. Mostly their profits come from the small fees and interests. What is wrong is that these fees will really cut into your money. Warren Buffet uses the term "friction" for these small recurring costs that slowly eat into your capital.
3) Finance professionals rarely give a honest view of the whole industry
Financial companies always try to promote their own products before recommending a competitors product. If you always listen to them you will probably not get the best deal there is. Do some research yourself and get offers from at least a couple of companies when applying for a loan for example.
2) Handling your own finances is a great learning process
Taking responsibility for your own finances is a great learning experience, it forces you to study. Its simply good for your brain!
1) Its not their money!
Its clear you will be more passionate about your money than anyone else ever will. For financial professionals handling money is just a job. This is the most important point: Its not their money!
2 kommenttia:
I am amazed at some of the whoppers I hear from people who tell me what their financial consultants tell them.
One young couple was even told to put their money into a 2% savings account instead of investments! I had to triple check the latest inflation numbers again after I heard that one.
hi Joe, thanks for the comment. I have to agree inflation is not something people often think when managing their finances. Often inflation is kind of automatically taken care of because people have most of their money invested in their houses which then appreciate in value over time.
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