Wednesday, May 08, 2013

What Are You Reading: Who Took My Money?

Who Took My Money? Why Slow Investors Lose and Fast Money Wins!
by Robert Kiyosaki

If you have, lets say, $10,000 to invest. Where should you invest it? Simple question, unfortunately the answer is not as easy. For one, you would have to take in consideration your comfort level and time commitment. The problem is, you may not like the answer. If you are currently investing in mutual funds. It as been my experience most people would like to get a specific fund for that answer. Not, get out of mutual funds. Did you know that most financial advisers are first and foremost sales people. They are selling a product, mutual funds. They will never advise for you to invest in anything else but mutual funds, because that is where they make their money.

I remember when we met with a representative of Primerica. His advise was to combine all of our debts into one mortgage against our house. Then amortise for 35 years and make payments as if it was amortised for 25 years. It would leave us with a massive payment that would take up all of our spare money, but we would be debt free in 15-20 years. "Doesn't that sound great?" he asked. He was a little shocked when I didn't agree. That would only work if we where done accumulating debt. But I had two small children, we where already outgrowing our house and our vehicles where on the verge of needing to be replaced.

I lost further trust in the company when the representative kept asking me to join the Primerica group and become a financial adviser. I explained that I knew nothing about that, but he assured me not to worry that it would only take a weekend course and an easy test. Really?!?? That's all it took him to advise me what I should be doing with my money to get ahead? No kidding I didn't like the answers I was getting.

If you are wondering if your financial adviser is a sales person, ask this; when do they get paid? When they sale you a mutual fund product or when they make you money?

I also find very funny that they suggest you be diversified when all they offer is a product that only makes money one way, when the market goes up. That is not being diversified. Wouldn't it make more sense that if you are to be in the market, that you diversify yourself so that you can make money when it moves up or down? And that to further diversify yourself by investing out of the market as well?

That was my personal opinion. If you want to hear more about why and where you should invest your money, read Who Took My Money?