10 Smart Money Rules
10 Smart Money Tips
By D.S. Mitchell
Here are 10 truisms for investing and life. Allan Roth, a long time financial planner and writer, states the following 10 things must be considered before you open your wallet.
10 Smart Money Suggestions
Suggestion 1: Always remember sales people, whether at your local Walmart electronics department, or at the Mercedes dealership, are trained to manipulate your emotions. Let your emotions cool before deciding to buy that luxury car, or that new 60 inch screen television.
Suggestion 2: Never buy an investments you do not completely understand. There’s a lot of hype out there for all variety of investment vehicles. It is critical you understand what you’re buying, how much it costs, and why it is the right for you.
Suggestion 3: Nothing is free. You probably at some point in your life have received an invitation to a free lunch so you can learn about a new way to increase your wealth, or buy a timeshare. It is a sales trick to market expensive products for juicy profits. Stay away.
Suggestion 4: Put yourself in the seller’s shoes before buying before making a purchase. You can protect yourself by reflecting on two key questions. 1) What’s in it for the person selling the product? 2) How does the company behind the product make money? Reverse roles and consider how someone is profiting from your purchase. Why does that free subscription, for example, require a credit card number unless the seller expects that you’ll forget to cancel at the end of the free trial period.
Suggestion 5: Temper your ego. Never believe you are too smart to fall for a bad investment(s). Realize from the start anyone can be tricked, swindled, or convinced to buy a bad investment. Going back to suggestion 1, sales people are trained to play you like a fiddle. Sir Isaac Newton, an intellectual genius, lost his fortune by investing in a hot stock of the day.
Suggestion 6: Get it in writing. During a sales pitch, promises are often made; a refundable deposit, cancel at any time, but if you didn’t get it in writing you probably have no recourse. Always read the disclosure statement, does it match what the salesman told you? Even an email promise from a salesperson can give you potential recourse.
Suggestion 7: When it sounds too good to be true, it most likely is. Greed however often overrides our native common sense. You’ve seen the free phone, free tablet, free wrist phone-most of those offers require a contract, if you leave the contract you pay for those freebies.
Suggestion 8: Avoid limited time offers. The limited time offer is designed to trigger your instinct for action before the logic part of your brain kicks in. Beware of that ticking clock-it is a powerful sales tool.
Suggestion 9: Regulators rarely order a consumer be reimbursed for losses. It is better to make the right investment choice to begin with than counting on a watchdog to bail you out.
Suggestion 10: Never forget that other people want to separate you from your money.