In my last post, I exposed a philosophy that exists in the financial advising industry – that advisors are paid to sell, not to think; a heinous accusation, to be sure, but one that I directly experienced.
In this post, let's talk about who should be watching your money and why.
I'm going to go out on a limb and say that it's you.
Previous to 1974
, Americans didn't have IRA or 401k accounts because the laws to create them didn't exist yet. People bought stock directly from the companies they liked. People invested in their brother's mill business, or loaned their kids the seed money they needed to start their dry cleaner. People saved their money in safe deposit boxes and tin cans. They converted it to other currencies like gold and silver.
Fifty years ago people were far more connected with their money, and their community. Today we live in a bit of a twilight zone, where some of our actions don't match our other actions.
Here's a common example… (It's common, so don't feel too bad if this is you.)
If you've watched Food, Inc.
or Fast Food Nation
, you may have begun shopping at the local farmer's market
for fresh locally-sourced produce or maybe you even set up a CSA
with a local farm to get your meat from there instead. You just couldn't stand the thought of how chickens and cows were being caged into contained feeding arrangements that left them lame, diseased and dying. The thought of eating that food now makes your stomach turn. So you took action. And you spread the word to others.
I'm willing to wager a bet though – that you never checked your investment portfolio to see if you owned Tyson or Monsanto or any of the multitude of industrialized food companies whose cheap and nutrition-deficient products are directly responsible for the rise in obesity and other health related diseases – and chances are you do.
My colleagues and I have noticed, and are now part of, a groundswell of action that's centered on reconnection. If we want real change, we have to become reacquainted with our money, with our neighbors, with our businesses.
We have to learn how to think with a bigger perspective, especially when it comes to our money. If we abhor the industrialized food companies, then we shouldn't own them in our mutual fund portfolios. If we are concerned about a potential collapse in the global financial systems, then we shouldn't have all our money tied up in those systems.
Why is it your job to be reconnected with your money?
Because no one else cares about your assets as much as you do. I've had a lot of people tell me over the years as I've worked with them, trying to educate them and help them be good stewards of their money, that they simply don't have the time. "That's why I pay you," they say.
I think of money management as the same as working with healthcare professionals. I go to the doctor when I have an ailment, to get their opinion on what they think the cause is. I then do my own research, I read the materials they give me, I may even get a second or third opinion, and I make my own decision about what route to take.
When we go to doctors for an ailment, and they prescribe four medications with a short descriptive sentence on each one and a hefty book of fine print legalese about each one, how many of us would just take the meds and go on with our lives? Yet that's what happens with investments. Clients and advisors alike don't read the fine print. Reconnection starts with you.