George Carlin made a great observation: most people will admit to being bad at math, but no one wants to own up to being a bad driver. The problem is most of us are much, MUCH worse at math than we even admit to, and it ends up working against us when it comes to investing. I’m not talking about needing some sort of wizardry with a Texas Instruments graphing calculator that will find the next hot stock, I’m talking about simple stuff like our ability to comprehend the basics of compound interest.
Imagine you are standing in line for a rollercoaster at an amusement park. As you’re making your way to the front of the line you see people getting off the ride. Many people are smiling or laughing, and although a few look a little dizzy or sick, overall everyone is fine. Finally, as you embark on your ride and start upwards on the first and largest hill, you start to feel a different emotion than the excitement you felt earlier while watching riders exiting the cars.
Shortly after returning from my missionary service in 2001, I was approached by a man who said he was experiencing some car troubles and needed a ride. I truly learned to love people on my mission, so I happily offered to help.
While I was driving, the man revealed his true “story.” What he really wanted was money. He needed a certain part to fix his car and he knew how much it was, he just didn’t have the money to get it done.
Flipping, wholesaling, syndication, landlording, assigning, lease/options, rehabbing, BRRRR, abandoned properties, probates, auctions, REOs, land, mobile parks, self-storage, single family, multi-family and commercial properties; these are the terms of real estate investing. I’ve been attending my local Real Estate Investor meetups here in the Ti-Cities and I’ve picked up a bit of the lingo in the last few months, can’t you tell.
What you onlythinkyou know can definitely hurt you — and cause you to lose a lot of money in the market.
The reality is most of us do not consistently make excellent financial choices on our own, in a vacuum. Part of the problem is that we’re plagued by misconceptions around money and the market, and we act on faulty information.
In one of my peer groups, a fun poll was posed to us and essentially it asked if our profession (financial advisors) would be more fun if we could reliably beat the market. I got a good chuckle out of it, because, obviously, who doesn't want to beat the market?
Following along with the blogs of financial advisors is a great way to access valuable, educational information about finance — and it doesn’t cost you a thing! Our financial planners love to share their knowledge and help everyone regardless of age or assets.