Most of my clients at one point or another ask me about investing. First, I tell them that legally, I can not advise as to what they should or shouldn’t invest in. However, I do offer some valuable, common sense advise.
First and foremost, never give your money to someone else and say “invest it for me and make me a lot of money.” You must always make sure you are educated and understand the risks of what your money is being invested in. You and you alone are responsible for giving the go ahead in any investment. You are the only one who really cares about your money. Giving someone else full control over your money voids your risk comfort level. With that said, it is not a bad idea to work with licensed investment professionals. But you must make sure you know who it is you are working with and what their qualifications are as well as their own portfolio. Again, do you want to invest with someone who is in debt and struggling financially or with someone who is debt free, and making good returns on their own investments?
Interview several different people, get recommendations from successful investors as to who is good and successful to work with. You should never choose an investment broker based on relationship, I hear this a lot, “oh, my brother-in-law is my broker” and when I ask how they made that choice, I usually get an answer something on the lines of “well, he asked, and I just couldn’t say no, he is family” or “he was just starting out and I wanted to help him out a little bit” then they go on to complain about how much money they have lost. Now, don’t get me wrong, if your brother-in-law has a proven success record then that is one thing….but then again, do you really want to mix money into family matters, not a recommendation I would make.
This is your money we are talking about, would you choose to be the first open heart patient of a doctor who was just out of med school and who had never performed the surgery before? Of course not. So why would you choose a investment broker based on relationship rather than experience and a proven track record? Interview many different people, don’t just pick the first one you come by.
During your interview process, if you don’t 100% understand what the broker is telling you, or talking about, or if you don’t feel comfortable with them, then they are not the right choice. You must completely understand how they work, and how they will be bringing recommendations to you. Remember, it is your money, keep control of how it is invested and understand every step.
Never invest more than you are willing to loose. Lets face it, investing is risking, and risk varies depending on what you are investing in. You and only you know what your risk comfort level is. You are responsible for the investments that are made, take accountability for your choice. You can’t blame your broker if you just hand over money to him or her, and they make a bad choice and you loose it all. You can’t even blame them if you tell them what to invest in and then you loose it all. Bottom line is you and you alone are responsible for the choices you make in all aspects of your money, from spending to investing. If you make money you can pat yourself on the back, and if you loose money you have no one to blame but yourself because you and you alone made the choice as to what to invest in based on how you educated yourself. Take responsibility!
