Top 16 Investing Mistakes
This is Top Investing Mistake #16. For the other 15, see below.
Top Investing Mistake #16: Not Taking Responsibility
Have you ever heard someone say the following?
My accountant handles that.
The idea of letting someone else manage a complicated part of our lives is not new. We often use experts in the fields of finance, taxes and health. When we are sick, we go to a doctor. At tax time, we let the tax preparer do the work. And for investing, many people rely on their financial advisor.
Getting great expert advice in these fields is a great idea. But it carries with it a certain danger.
The problem is that people often rely on these experts and never take responsibility for the results. Even when we use an expert to make a specific investment or develop a plan, the results of the investment are always our own responsibility. We can use experts to get information, but we can never assign responsibility for results to them.
Why not? Because they will never care about our finances as much as we do. Many financial advisors are paid on a fee basis. Even when they lose your money, they still get paid. Does that sound like a good deal? Do you think that they are going to pay you back if they lose your money?
The reason that people love to give responsibility to the expert for results is that it makes life easy. We don’t have to feel bad if they lose the money. It’s so much easier to just blame the other person and feel angry at them. Who wants to say, “I lost the money though my own decisions?”
It is always our own choice to use an investment advisor, and we are always responsible for the results. It is easy to blame others for what happened, but we are the ones who have to live with the unpleasant situation. We are the ones who become dependent on social security. We are the ones who spend our whole lives working. The financial advisor simply moves on to the next customer.
So, it’s important to separate advice from responsibility for results. It’s a smart idea to get great advice from the best experts that we can find. And, regardless of the results, win or lose, we are the ones who must take responsibility for what happens.
Here are the other Top 15 Investing Mistakes:
Top Investing Mistake #15: Not Managing your Spending
Top Investing Mistake #14: Not Managing your Effort
Top Investing Mistake #13: Not Managing your Time
Top Investing Mistake #12: Not Connecting to your Highest Goal
Top Investing Mistake #11: Not Deciding to be Rich
Top Investing Mistake #10: Not Finding Your Groove
Top Investing Mistake #9: Not Doing More of What is Working
Top Investing Mistake #8: Not Getting Buy-In from Important People
Top Investing Mistake #7: Not having a Specific Goal
Top Investing Mistake #6: Going Big Too Soon
Top Investing Mistake #5: Not Managing Risk
Top Investing Mistake #4: Not Getting Enough Information
Top Investing Mistake #3: Listening to People who are Totally Unqualified
Top Investing Mistake #2: Failure to Launch
Top Investing Mistake #1: Not Having the Right Mindset
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
I’ll add one more mistake: Listening to the mass media. They will always be at least one step behind were you should be. They will never report on anything but mass-market opportunities. They are beholden to their advertisers to report on stocks, mutual funds, etc. and will only talk about “niche” investments such as real estate, oil & gas, precious metals, etc. when there is a huge boom or a huge bust.
Instead of just listing to and reading the mass media, look for alternatives on the web, in local investment clubs, or by talking to private business owners.
Another thing that you won’t read about is a self-directed IRA. Again, the large financial companies want to tie up all of your money and won’t tell you that you can invest in these alternative investments through your IRA.
David Safeer
dsafeer.blogspot.com
@David Safeer
Hi David,
That’s a good point. Most people don’t know it, but you can choose from a wide variety of investments for an IRA, including real estate.
And yes, I agree that mass media is a aimed at average people, and generates average results (at best). Anyone who wants to succeed in achieving financial success can pretty much ignore the mass media as well as the masses.
George