A few weeks back I saw a movie called Money Monster starring George Clooney and Julia Roberts and it resonated with me because it was about a money host on a TV program called Money Monster.
It was clearly a play on words by the writer or the film’s producer because the host, we later discover, had form in the monster department. However, the story and two incidents this week have made me ask: Who is the Money Monster? Is it the TV tipster? The financial adviser? Or you, the investor, who wants to be rich or richer but you aren’t prepared to do the hard work to make it happen? Or maybe you aren’t prepared to do the homework to find a trustworthy adviser to help you make it happen.
So what are the two eye-opening incidents of this week?
First, a viewer of my show asked me what three stocks I would recommend for someone who wanted to play the stock market. The second, was a TV finance friend who worries that well-heeled family and friends come to her to ask advice on what they should do with their money.
Her reply to them is “I’m not an adviser”, but you should seek some financial help from an adviser. However, she then threw in, “but who can you trust?”
She implied that advisers have a money monster tag, which for the vast number of advisers I have met, is an unfair slag. But there have been some bad eggs and institutions that have not helped the public’s perception of the sector.
(She also forgot I have a financial advice business, which says something about my poor marketing to my friends!)
Earlier this week, I spoke to a 1000 people at a conference and asked who preferred to be rich rather than poor. Everyone, unsurprisingly, put their hand up for rich over poor and then I teased them and posed the question, why don’t they watch the Switzer TV program that is primarily designed to make investors and business owners wealthier?
This question was consistent with the theme of my speech about how someone can turn a good business into a great business.
There are many stand out characteristics of great business builders like Richard Branson, Steve Jobs, Mark Bouris, Janine Allis, etc., but the biggest stand out one is a commitment to their goal.
That’s why I think a lot of people who think they want to be rich end up missing out.
Great business builders are like the great wealth builders — and they are often one in the same person! — as they have a goal, they have a huge focus on it, they are committed to making it happen and they will spend all of the time and money to make sure they succeed.
They would watch Switzer over My Kitchen Rules every time. They would go to www.switzer.com.au for their daily chance to get a competitive edge rather than some silly news website that pedals bad news and stupid gossip stories.
So many other people have a half-hearted approach to building wealth and their results show it. They are monstering their own goals to make money and that’s why I think they are the greatest money monsters in their own lives.
Sure some money advisers have done monstering too, and regulators, as well as governments, need some pretty big kicks up the pants. But as with all things in the transactional world, it has to be “caveat emptor”, let the buyer beware!
As a TV money host, I don’t tip, but I do say what I like and I do say what I’m doing. For example, when the S&P/ASX 200 index was around 4,700 in February this year, I was saying that I would be buying this dip believing stocks will rise, and they have. There’s been a 16.7% gain, but I did not accurately tell everyone that the market would fall from 5,995 to 4,700, and that’s because market predictions are hard — very hard.
My advice of buying the dips and buying quality companies are examples of good strategies, but I’m not God. I don’t know the money world’s future but I can set up good strategies to cope with the ups and downs of markets.
That’s what I want my advisers to do to help their clients, and for my own super fund, I have designed it so the flow of income from stocks in particular is pretty consistent for when I retire, but my capital will go up and down with the stock market. This doesn’t worry me because I have great companies in my portfolio — at least 20 — that pay solid dividends and I have a good cash buffer account to make up for any really bad years when dividends disappoint. That said, they haven't disappointed to date!
People who want to know three good shares only are potentially their own money monsters. When it comes to money, you need to be committed and focused. You need a goal and you might need advice, but you shouldn’t be too passive.
Know what your adviser is doing. Get him or her to educate you because what I have always advised is: “Anything worth doing, is worth doing for money.”
Tonight on the show I will answer the viewer’s question and I hope I can teach him a great lesson.
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