Monday, August 25, 1997
Wise Advice From
Your Average Bear
by
[email protected]
Like most people moving to a higher income, I was bombarded about two years ago by lots of eager "financial advisors" who were all too willing to help me manage my money. They work full-time on this stuff and could let me think about more important things while they sorted through the "complex" world of investment issues for me. At that time I knew very little about the "market" or about other investment and money-management concerns. One thing I did know, however, was to be wary of anything anyone tries that hard to sell you. So I steered clear of all these eager helpers, and set out to learn it on my own. (It was not too long until I met up with the Fool).
One of the most eager of these people was particularly persistent in trying to win me over as a client. We will call him Yogi, with absolutely no offense intended to any baseball managers or cartoon bears. Yogi was wildly successful, drove a brand new beamer which he traded in every couple years for an even brand-newer one, and was determined to "build a lasting relationship" with me. He would call me at home, call me at work, set up meetings with me, and even offered to take me out on his boat. (Yes, I did note the positive and negative implications of him owning a rather large boat).
One of the nice things Yogi was willing to do for me, when I finally did agree to set up a meeting with him, was to supply me with a rather large pile of papers detailing all the various investment opportunities he could and would make available to me. "Read through these when you get a chance," said Yogi, "and don't worry if you don't understand everything or if it seems too complicated." You see, Yogi was so good at what he does, he could understand all this stuff, even if it was too complex for me. He could decipher all this stuff, and I would benefit in the form of vast riches and years of financial security. This huge pile of various and sundry prospectuses, annual reports, and brochures was, of course, intended to impress upon me the sheer complexity of the financial world. It was supposed to convince me of just how badly I needed to be guided by someone as financially Wise as Yogi.
Well I never read his pile of information. I did, however, read a whole lot of other things. I read the magazines, I read some books, I read the newspaper, and of course, I read the Fool! Now two years or so later, I feel I have at least a decent command of all those scary and complex issues Yogi was willing to help me get through.
Recently, I was going through some old files, throwing away things, when I happened upon Yogi's pile of material. I recalled first looking through it and thinking that it was indeed quite complex, and that I did not understand the majority of what I read (although I did not read much of it). Now, all the more Foolish, I read through this once-imposing pile. It turned out to be a series of financial products and their brochures, prospectuses, and reports: a few average money market funds, numerous mediocre and (surprise, surprise) heavily loaded mutual funds, some rather expensive universal life policies riddled with miscellaneous charges, and a super-duper brokerage IRA which charged about the highest maintenance and transaction fees I've ever seen!
It was great to see how easily understood and transparent all the various things Yogi was trying to sell me actually are! Now don't get me wrong. I respect the fact that Yogi is just trying to eke out a living like the rest of us. I don't fault him for selling his product any more than I fault any other "salesmen." Furthermore, his type of financial advising is probably good for some people who have not found the subject as interesting as have I. But it sure is great to see how much I've learned in the past two years! And of course my returns these first two years have far exceeded those I would have gotten using Yogi's "pile." Fool On!