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Is it really simple to get rich? May 6, 2008

Posted by shaferfinancial in Uncategorized.
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One of the interesting phenomenons in the finance world is the ability of Wall Street to get people to hold two opposing but simultaneous opinions.  Over the years Wall Street has engendered many articles and even books that tell us that it is simple to get rich.  Simply invest monthly into mutual funds and “whala” you are rich.  Of course they supply their sales people with charts and statistics that demonstrate this simple fact to you.  Then with a sleight of hand they take that simple away from you and tell you to get a “professional” to advice you.  So simple you need a stock/mutual fund salesperson to advice you so you stay out of trouble?  So simple that they need to tell you all about their money manager’s pedigree?  So simple that they tell you to get a “check up” annually so changes can be made?  Hmmmm…..is there something in your brain telling you that maybe it isn’t that simple?  Can you look around and see all those folks who became rich because of mutual funds?  Is there any study of rich folks who document their wealth as a result of investing in mutual funds monthly?  

There is an interesting chart in the back of “The Millionaire Next Door,” which documents their study of folks by occupation that are overachievers and underachievers when it comes to building wealth.  In other words, have they built more wealth than expected given their income or less.  Financial Services Professionals come in as less.  Are they not taking their own advice?  Or are they?  Maybe they are spending to much on trying to impress their clients and not enough on investing?  But, the bottom line is if they were so “expert” in investing surely they would do better than the average folks in building wealth, wouldn’t they?

I have documented the results many times before.  I have pointed out the faulty assumptions before.  I have strongly suggested, if you are concerned about your retirement, that you not only take a look at my website www.shaferwealthacademy.com but you fill in the contact information so we can have a discussion about wealth building.  Is your brain telling you it is not so simple as Wall Street has propagandized?  Are you willing to admit that you might need a little help?  Are you going to continue to do what Wall Street wants you to do? Or are you ready to take control of your destiny? Because it really is more complicated than putting a few hundred dollars a month into a mutual fund! 


1. BawldGuy Talking - May 6, 2008

Human nature never ceases to amaze, does it? Great stuff, David.

Folks hear what they wanna hear, then do what they wanted to do in the first place. Then it’s the other guy’s fault for not having the pot of gold at the end of the non-existent rainbow.

2. David - October 15, 2008

Great post! When I first got into this business (and it still happens
from time to time) I can’t tell you how many times I’ve walked out of a
“potential client’s” home because they insisted that the way they were
going to “get rich” was by dollar cost averaging with American Funds, or
some other “hot” mutual fund…

…many of those people I wager paid a stiff price post 2000…and they
are probably paying an even more severe price now.

3. gregturn - May 20, 2012

I feel like I’ve turned a major corner because I no longer have a big chunk of money sitting in mutual funds. I don’t sweat market drops except where they impact my company stock option. No more praying that my 401K doesn’t become a 201K (what my uncle called his fund after 2008). Sadly a small piece is locked up in my current company’s fund since they offer no early withdrawals while I continue working there.

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