Are those Financial Guys just Talking Mumbo Jumbo?

After watching those financial shows and listening to a few financial “advisors”, I have come to the conclusion that they don’t really know what they are talking about. Yes, it’s true that the words are pieced together to creates some meaning, but there is no value.

Here’s a clip from Stock Watch.

Most of the time, they say something like, “If this happens, then that will happen.” And I think, “OK, that’s nice. But it doesn’t really help me.”

What if someone told you,

If it is cold and cloudy, then it will probably rain.

That’s nice to know, but what is the chance that it is going to rain? That’s where the real value is.

Using a ton of jargon and gibberish to make themselves feel good does not create value. And it serves a very destructive purpose. It makes people who don’t know the jargon think that finances are too difficult or complicated to understand.

I think quite the opposite is true. Finance is very easy to understand. The problem is that more graduate and business school degrees make it complicated and difficult to understand. But the concepts are simple. They are simply obscured by jargon and unnecessary math.

The destructive part is that when people don’t understand how to manage their finances, they turn to “experts” who are there to make money for themselves, not their client. Then they use the jargon on the client to confuse them. Once the client is confused, they will go along with pretty much whatever the “expert” recommends. I have seen this happen first hand.

Why is this such a bad deal? Most advisors recommend mutual funds for their clients. Why? Because they pay the highest commissions to the advisor. The advisor makes money and never bothers to tell the client what a terrible investment they have just bought. Mutual funds take 80% of the profits from their clients through fees and commissions.

Ultimately, we are each responsible for our own finances. I think the only solution is to get educated and find out for ourselves what happens when you buy a mutual fund. Don’t take my word for it. I encourage you to do you own research and make your own decisions.