It is easy to answer. The common factor that all these investors share is failure, and a missing common factor that predicts success. The common thread that unites them is their desire to find an easy way to make wealth. Placement of their money in the hands of others to manage, purchase of newsletters to give them stock picks, and greed driven gambling in speculative investments. Their failure to take personal responsibility for managing their money is the common ingredient.
Answer: Learn a proper investment system and take responsibility for your financial future.
There are no viable alternatives. We are here to tell you why. We have compiled 101 reasons why managing your own money is the fastest way to build wealth.
(1) Your portfolio’s performance is the most important thing to a financial advisor or investment firm. Because they clarify reason (1), reasons (2) and (3) can be quite long. best laptops for digital marketing
(2) This is the second most important reason. Many people don’t realize that many financial consultants are just glorified salespeople and saleswomen. Even if they work for a high-profile investment firm, most people do not know this. I don’t know the exact statistics, but ask your branch manager for information about the five highest-paid financial consultants within his office over the past five years. Ask him to show you the returns of the top five financial consultants within the office that have made the highest returns for clients in the past five years. The branch manager should not be able to answer all your questions. Instead, ask for the annual returns of five top money managers (internal or external). The answer does not address your question. It is unlikely that top producers will hire the five top-performing money managers every year. Every major global investment firm employs hundreds of money managers.
This means that financial consultants don’t make any decisions about which stocks will be purchased with the money you provide them. This is done by hiring either external or internal money managers. Based on the number of money managers they have hired for their clients, you can find out the annual returns that the five highest-paid employees in your office make. You should ask why a branch manager won’t divulge this information. You have to wonder why branch managers refuse to divulge this information. Why is it so important for the firm to know what kind of returns top producers make for clients?
If they do know but refuse to tell you, then why wouldn’t they release the information? Why shouldn’t the highest-paid financial consultants be earning their clients the highest returns year after years? If so, then why is their compensation so high? If you are honest about these questions, the answers will reveal that top salespeople are paid very well by their companies while financial consultants earn almost no premium for their ability to make great returns for clients.
(3) Following on from point (2), many investors will say, “OK, I’ll find the financial consultant who falls within the top 0.5% of all the consultants that truly know their stuff and hire them.” This is where they get it wrong again. Most people don’t take the time necessary to learn how to invest properly. They are unable to understand the strategies of the experts. This inability to understand, despite all efforts by the consultant to educate, leads to endless questioning about the actions and strategies of the consultants. This can quickly become very tiring.
In the past, large accounts were lost due to meddling and stupid behavior by clients who had lots of money. The only way to be a true consultant is to spend 3-4 hours explaining the basics. If you’ve been taught nonsense by global investment firms for years, you won’t get it. Great consultants know that many commonly held beliefs about investing are false and will continue to fight for their clients who believe the nonsense. These clients are unlikely to be retained over the long-term.
Even if one does find a rare consultant who truly knows what they are doing and has outperformed markets year after year, fear will still be present. These consultants invest differently from the status quo. Fear is a natural human reaction. Fear leads to incessant questioning and badgering, which can lead to incessant fear-mongering. This behavior will eventually cause a great financial advisor to end a client relationship.
Great consultants are able to outperform the rest by taking decisions that are not in line with what 99% of financial consultants do. This makes it difficult to build a long-lasting relationship with them. Even if one does not want to manage their own money, and even if they are able to find a 1 in 1000 financial consultant who really knows what he/she is doing, it is still important to have a solid understanding of how to invest to keep a good relationship with them. This is why it is important to learn how to manage your money.
(4) Global investment companies always promote trust in their advertisements. But what about the historical performance that warrants this trust? 6% to 10% per year
Wealth building is not possible with a salary of 6% to 10%. It is essential that you earn at least 15% to 25% per year. It will take you nine years to increase $250,000 to $500,000, and 18 years for $250,000 to $1,000,000 in non-taxable accounts. This does not include the inflation erosion. It will take less than seven years to turn $250,000 into $1,000,000 in a nontaxable account. This is the difference between wealth creation and wealth preservation. You can preserve your wealth by investing 6% to 10% per year, and not building it.
(6) You will never find the best stocks on the global market from major global firms and keep them in your portfolio.
Reason (4) holds true because the coverage by major firms of micro and small cap stocks is shockingly limited. To please their clients, firms must cover large cap stocks, the Genentechs and the IBMs. The future Microsofts are microcap stocks and small cap stocks. Wealth cannot be built by buying and holding the IBMS in the global stock market.
(8) With the advancement of information technology and the flattening world of the information, it is now easier than ever to become a financial advisor for any major investment firm.
(9) Financial consultants are motivated by the commission-based system that determines their salaries. This is not always in your best interests.
(10) Investors who have built wealth by investing such as Warren Buffett, George Soros and even Mark Cuban have all managed their money. Money managers are often employed by investors who have amassed great wealth. This should give you an idea of what it takes to build wealth.
(11) Large global investment firms only have the resources and time to monitor approximately 1,500 stocks. Globally, there are approximately 75,000 stocks. Investors are looking for coverage of the most widely traded stocks in their country. This means that large-cap domestic stocks make up the majority of stocks that analysts cover. Many times, I was unable to purchase stocks in China that I wanted. These stocks, which had triple-digit returns within a year, were not covered by a Wall Street investment firm. If you want to own the most desirable stocks in the world, then you must manage your money. If you give your money away to be managed by someone else, chances are that you won’t own the best stocks or opportunities anywhere in the world.
(12) Statistics show that 3% of people own 95% of all wealth. This is true regardless of where you live. These 3% have taken the time to learn how money management works and are now wealthy. You don’t need to rely on your financial advisor for your returns. Manage your money yourself. How many times have you asked your financial advisor if you would like to invest or in dollars declining funds or in Chinese markets? Only to be told by your financial consultant that the best way to invest is what I am doing right now.
This anecdotal tale was told to me once. One of the top financial consultants at his firm asked a wealthy client why he didn’t have any stocks on the Chinese stock exchange. He said that he would get a list of stocks for you to purchase if you give him some time. The list included the American-based Chinese restaurant chain P.F. Changs stock. This is the type of advice that a top producer would give. You may wonder how he can be such a great producer. This list will show you how simple it is to have these kinds of situations at top investment companies.
This list has 101 reasons. However, it is not possible to list all 101 reasons. Please follow the link to see the rest of the “101 Reasons” list.