Learn How To Manage Your Own Money
I hope that no one takes offense to this, but I sometimes can't believe how flippant people are with their life savings.
When most people buy a new car, they do hours upon hours of research and drive from dealership to dealership to get the best deal.
When most people buy a new home, they will agonize over the decision, making sure that they get the absolute best deal. Most people have a long checklist of the things that they want in a home, and won't be satisfied until every need is fulfilled.
There is a wealth of information available on the Internet, and people take full advantage when they are buying a new car or house or any other major asset.
So why then do many people not to take the managing of their life savings as seriously?
I've lost count of the number of times that I've asked somebody how their investments are doing and they just shrug their shoulders. "I don't know", they'll say, "my broker is hard to reach and I don't really want to bother him."
What's in your portfolio, I'll ask. What companies and funds are you invested in? What kind of risk are you exposed to?
I'll usually be met with a blank look. "I have no idea", they'll usually say.
These are people who have entrusted their life savings with a complete stranger, and they aren't even following along to find out what they own? I really can't believe it.
"It's boring", they'll say. "The stock market doesn't interest me".
Give me a break. We're not going to the circus here - we're managing our money. Going to the gym isn't really "fun" either, but it allows us to get into better shape and live longer, more healthier lives. Why should learning about your investments be any different?
I'm very confident that any person can become more than capable of managing their own money with the information that is available today. There is a wealth of useful info right at your fingertips - information that will allow you to manage your own investments with confidence.
If you have a broker that has done well for you, then by all means keep them.
Having said that, most brokers know much less than you think they know. Most brokers are interested in one thing - commissions.
Many brokers do not take your best interests into consideration.
Many brokers are hard to contact, and almost seem annoyed when someone dares try to get into touch with them with a question.
You wouldn't put up with this with almost any other service. However, brokers seem to rely on the fact that the stock market "seems" difficult and hard-to-understand for most.
The fact is - it really isn't.
Investing is about figuring out your tolerance for risk and finding investment vehicles that fit your profile. There are many great sites out there that will bring you right up to speed.
The great thing about the Internet is that there are instant answers to all of your questions.
Any question that you have has been asked before. All you have to do is type the question into Google and you'll have a response.
Plus, you will always know exactly how your portfolio is doing. No need to wait for a statement every three months from your broker. Instead, simply log into your online brokerage account and check your statement yourself.
This isn't a slam of all stock brokers - there are definitely some great ones out there who care a great deal about their clients.
That being said, you can fare just as well or better than most brokers out there with a bit of research and some belief in yourself. Take the managing of your finances seriously and put in the work, and you just might surprise yourself.
Filed under: Stock Market Education