“My Neighbor’s a Financial Guru”
My neighbor is not really a financial guru, but he is a (retired) whiz bang mechanic. I’ve watched him work and the things he can do amaze me. He can diagnose what’s wrong with my car and he can fix it. When he talks cars, I listen. When it comes to my cars, I trust him implicitly. However, I wouldn’t trust him to invest my IRA or my grandchildren’s college money.
Yet, surprisingly enough, a big mistake a lot of people make is acting on financial “tips” they receive from neighbors, co-workers and even family members. I’m not saying that all tips you might receive from people you know are bad. Some may very well turn out to be good, but the point here is that the mistake lies in not researching the tip before you invest in it. Or in not seeking competent advice on the tip.
I can remember a specific incident where a couple asked me if I would look over some “legal looking” papers they got from one of their investments. When we met, I reviewed the documents briefly and asked them how much they had invested in this company and how they happened to choose it for an investment. Apparently, a neighbor had recommended it to them and told them it was a sure hit. They had invested almost half of their savings. They had been in the investment for a couple of years and now they got all these papers. The paperwork was not happy news. It was notification that the company was going through bankruptcy proceedings, and it was unlikely any stockholders would receive any portion of their investment back. A sad story, but one that happens with regularity.
Not everyone needs professional financial advice because some people have the knowledge, ability and time to manage their own investments, but to those that don’t, I ask you to chew on this analogy:
As a financial advisor, I’m like the pilot on an airplane. My job is to get you to your destination safely and on time. There may be times when I ask you to look out the window and witness some beautiful scenery. There may be times when I have to alter our course because of storms up ahead. There may even be times when I tell you that the ride is going to get bumpy and to fasten your seat belt. But my job as the pilot is to get you to your destination safely and on time. You are now at the airport, and you have a choice: There are two planes at the gate. Both are fueled up and ready to go. They are both taking off at the same time and heading to the same destination. One plane has a pilot and the other plane you fly by yourself. Which plane do you get on?
These are the opinions of Legacy Wealth Management, LLC and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.
Mike Berry is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.
Copyright ©2022 Mike Berry. All Rights reserved. Commercial copying, duplication or reproduction is prohibited.
