by Jim Stovall
I have worked in and around the financial and investment industry for my entire career. I began by running my own office with a New York Stock Exchange member firm, then went into financial planning, and now, through my books, movies, speeches, and these columns, I advise people around the world on the attitudes that will make their money work as hard for them as they worked for their money.
I’m a firm believer that even if you work with a money manager, broker, estate planner, or other financial professional, you need to manage your own money. The most common reaction I receive to that statement is, “I don’t understand it, so I let someone else handle it.” I don’t disagree with letting someone else handle it, and I even find it advisable to have professionals on your team, but I reject the notion that people who are smart enough to earn money aren’t smart enough to manage it or invest it.
Too many people in the financial service industry and other professions believe their career is more valid if they somehow make their profession more mysterious and confusing. In this way, these misguided individuals feel that you will trust them to handle it because they understand it and you don’t. This is counterproductive and a recipe for disaster.
Confusion creates doubt, and doubt creates procrastination. Procrastination is the enemy of any investment or financial plan. Time is your ally, and if you don’t use all of it to your benefit, you won’t be as successful as you otherwise could be.
If your doctor, lawyer, car mechanic, or financial professional can’t explain things to you so that you can be a part of the decision-making process, there’s nothing wrong with you, it’s just that they are not a true professional. A great physician should be able to explain your diagnosis and treatment in terms that you understand. You shouldn’t have to go to medical school or law school to communicate with the professionals you hire to assist you in succeeding.
Warren Buffett, whom I consider among the world’s greatest investors, relies upon a series of criteria he has developed as an investor for over half-a-century. Among Mr. Buffett’s criteria is “don’t invest in things you don’t understand.” One of the greatest upward moves in the world’s equity markets has come to be known as “the dot com boom of the 1990s.” Many investors’ portfolios benefited greatly from the rapid growth of hardware and software corporations around the world. Warren Buffett predominantly ignored these high-tech opportunities because he simply didn’t feel he understood them. Buffett continued to successfully invest in railroads, airlines, energy companies, and other opportunities he understood and that made him a multi-billionaire.
If you are a professional in any area of endeavor, it’s your job to make complex concepts simple to those you serve, and you need to make sure that those who serve you do the same.
As you go through your day today, eliminate complexity and succeed through simplicity.
Today’s the day!
Jim Stovall is the president of Narrative Television Network, as well as a published author of many books including The Ultimate Gift. He is also a columnist and motivational speaker. He may be reached by email at Jim@JimStovall.com; on Facebook at www.facebook.com/jimstovallauthor; or follow Jim on Twitter @StovallAuthor.