We seem to be doing less and less of life's boring jobs. Instead, we turn them over to service providers. But, one service we need to keep at home is money management. It takes a lot of time to manage your financial decisions, but the only one who can make those decisions is you.
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The inner workings of a toilet tank are a wonder of simple, effective engineering. I never thought much about this until I ran into a handyman who didn't understand how the tank worked. I got quite a thrill out of figuring out why the water was coming out where the handle went in, and I've been replacing flappers and floats as needed ever since.
My dad knew how to fix a toilet, and I'm pretty sure all of the men he knew did, too, and maybe even a few of their wives. That doesn't seem to be the case for the generations that have followed. Of course, some of us can fix toilets, but it's hardly a universal skill anymore.
What an amazing time we live in. A fairly typical, middle-class family in this area might employ a housekeeping service, lawn service, handyman, laundry service, tailor, dog walker, baby-sitter, gutter cleaner, and grocery delivery service -- and still pick up dinner at Boston Market twice a week or order pizza.
We do less and less for ourselves and rely more and more on "services." This isn't about the "service industry," though. It's probably a great place to invest, but that's not my concern today. And, it's not about the stress of the two-wage-earner family or the single-parent family -- worthy topics, but even my one friend who doesn't work has a housekeeping service. I rather doubt she changes her own oil either.
Today, I'm thinking about how the moment-to-moment business of life has changed. In a way, today's middle class has achieved the kind of freedom from the mundane that only the wealthy could afford a few generations ago. We don't hire legions of servants, and I have yet to have someone jump up to get me a drink of water (I'm working on getting the kids to fill that role, but the project is running into some difficulties). But, an increasing number of us are happy to pay someone to take over life's less pleasant tasks.
I'm not complaining about this, mind you. I probably wouldn't enjoy fixing a toilet if it weren't something of a novelty in my life. My aim is to be able to afford all of those services I listed above, plus a personal shopper (one who won't mind shopping at Toys "R" Us).
My point is that we are very used to and comfortable with having others do things for us. But, one task is just too important to cede to anyone else. That, of course, is managing your money.
Mutual funds are one way to turn your money over to someone else. The Fool has a pretty well-known position on managed mutual funds. I don't need to beat that drum today. But, there are so many other ways that we let others do our money management for us.
The easiest and most dangerous is that we let salespeople make decisions for us. (I used to get the most heartbreaking letters from victims of annuity sales tactics when I worked in customer service!) Insurance sales, car sales, timeshare sales, and all sorts of financial sales -- from insurance, to seminars, to newsletters, to FoolMart. Selling makes our economy run and we would be lost without it, but we can't lose sight of the fact that the person doing the selling is more likely to be concerned about his or her profit from the sale than your profit from the purchase.
Selling -- the profit motive -- is human nature, capitalism, the way things work, and I have no better system to offer. I've been there, done that, and it can be a perfectly honorable and respectable profession. Except when it isn't. But, the problem isn't so much the duplicity of salespeople, as it is the gullibility of customers. Let yourself be convinced that you look good in plaid stretch pants if you must, but don't take anyone's word for what you should do with your money.
Don't take anyone's word, but take in everyone's. Sales reps can be excellent sources of information about the good aspects of their own products and the bad aspects of their competitor's products. So, talk to both sides and you'll have a better picture of how the product might suit your needs.
The more money at stake, the more likely it is that the person doing the selling will be highly motivated by the prospects of a commission. And, here's the real kicker, the more money that is at stake, the more likely the salesperson is to appear knowledgeable, trustworthy, and completely concerned about your welfare. Those are skills that can be learned, and people who learn them well gravitate toward the big-ticket items.
It's far, far easier to just trust someone than to get into all of the mundane details about rates of return, expense ratios, commissions, cancellation provisions, risks, and alternatives. It takes time -- a lot of time. A lot of boring time.
But then, you don't have to clean out the gutters, clean the bathrooms, mow the lawn, hem those pants, or change your oil, right?
Fool on and prosper!