No one cares more about your money than you
Everyone else is just trying to figure out how to separate you from it.
I’ve read a lot of stuff lately about how scammers take advantage of other people. (Here, for example, is a brief summary of seven psychological tricks con artist use.) It’s easy to think that those who lose their money are just unfortunate suckers. That’s not always true. Often they’re folks just like me and you who get talked into thinking somebody else knows more than they do.
- Bing: Mortgage scams
On some level, the same thing happens all the time with bankers and brokers and real estate agents and even with friends and family. These folks may not be con artists, but we’ve all allowed these other people to tell us what we ought to do with our money. We let ourselves believe that they’re able to make better decisions about our financial situation than we are.
Sometimes they can -- but mostly, they can’t. Or won’t. Because the truth is, your money just isn’t as important to anyone else as it is to yourself.
One of the most powerful lessons you can learn is that nobody cares more about your money than you do. When you realize this, when you take responsibility for making your own financial decisions (instead of letting others make them for you), it can bring a tremendous sense of power and control to your life.
Trust no one
If your real estate agent says you can afford a particular house, don’t just take her word for it. Run the numbers yourself. Set your own budget for a mortgage, don’t just trust the mortgage broker or the bank. Of course they think you can afford more -- they have commissions riding on it!
If your insurance salesman tells you that whole life is better than term, don’t just take his word for it. Do your own research. Find out what’s right for your situation. (Hint: It’s probably term.) Of course he wants you to buy whole life -- he’ll make five to 10 times more than he would if you bought term.
If your lawyer tells you to create a living trust in addition to a simple will, don’t just take her word for it. Dig a little deeper. Learn what a living trust is. Find out why people use them. Ask yourself if this makes sense in your circumstances. You may very well decide to have your lawyer create a living trust -- or you may decide that $800 is better spent elsewhere.
If the salesman at the Mega Mart argues that you should take out an extended warranty on your new 180-inch deluxe dilithium-drive television, don’t just take his word for it. He has zero motivation to give you advice that’s in your best interest. His advice is based on what’s in his best interest, which means more money in his pocket.
If your favorite personal-finance blogger urges you to invest in index funds, don’t just take her word for it. Read up on the subject yourself. Though it’s unlikely that a blogger is going to profit from your investment choices, it’s very possible that her investment goals and your investment goals are different. Maybe she’s well off and merely wants to match market returns. Maybe you’re young and would like a little more risk. Use the blogger’s advice as a starting point, but do your own reading, your own planning, and make your own investment decisions.
When you see an ad on television or on a blog or in a magazine, don’t just believe what the marketing copy tells you. Of course the latest Thneeds are the best! That’s what all ads say, right? Big corporations don’t have your best interest at heart. All they care about is the bottom line. To get the facts on quality and performance, check out impartial reviews through Amazon and Consumer Reports -- and your friends.
The truth is out there
Don’t get me wrong. I’m not saying that it’s bad to talk to a financial planner or to use a real estate agent to buy a house. You should absolutely have a team of financial advisers. Heed the advice of experts. Listen to what they have to say. But don’t follow their recommendations blindly.
The advice that others give you is almost always in their best interest -- which may or may not be the same as your best interest. Never forget this. Don’t do what other people tell you just because they have authority or because they have a silver tongue.
Read. Research options. Understand the pros and cons of every choice. (Because every choice will have its pros and cons.) Don’t become obsessed with perfect, and be willing to make mistakes. Realize that what’s right for one person may not be right for you.
And, especially, never make a financial decision under time pressure. If somebody tells you this is a limited-time offer and you need to act fast or you’ll miss out, then miss out. It’s almost always the best choice. (Creating time pressure is one of the oldest tricks in the book, and an easy way to get people to go against their own best interest.)
Know what’s important to you and why. Use this knowledge to set goals. And use those goals to direct your choices. When you have a why, it’s easier to trust your own judgment.
Do these things, and you’ll appreciate that nobody cares more about your money than you do.
This is the 12th of a 14-part series that explores my financial philosophy. These are the core tenets of Get Rich Slowly. Previous parts included:
- Tenet No.1: Money is more about mind than it is about math
- Tenet No. 2: Goals are the gateway to financial success
- Tenet No. 3: Spend less than you earn
- Tenet No. 4: Pay yourself first
- Tenet No. 5: Small amounts matter
- Tenet No. 6: Large amounts matter, too
- Tenet No. 7: Do what works for you
- Tenet No. 8: Slow and steady wins the race
- Tenet No. 9: The perfect is the enemy of the good
- Tenet No. 10: Failure is OK
- Tenet No. 11: Financial balance lets you enjoy tomorrow and today
- Tenet No. 12: Nobody cares more about your money than you do
Look for a new installment in this series every Monday through the end of the year.
Related reading at Get Rich Slowly:
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
State Farm says cost of deer-strike repairs up 14 percent, and drivers' odds of hitting one have increased as well.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'