How To Make Money Without A Financial Guy
When it comes to your money, it seems like there’s always someone trying to take it. No matter what you buy, it seems like everyone has their hands in the pot to get a cut, which costs you dearly in the end. But that’s just how life goes. That’s just part of it, right?
Heck no. When did it become okay for everyone else to get a piece of your money? News flash: That’s never been okay. It’s just become so common we don’t ask the hard questions or dig deeper to put an end to it or find a new solution.
Let’s Break It Down
Let me give you an example. Your financial guy (or girl), the person you rely on to take your money and turn it into more money, the person you expect to know everything about money and how to make it work for you, that person is lying to you by using technicalities you probably miss.
I’m talking about the average rate of return vs. the actual rate of return on your invested money. Before choosing your go-to financial guru, you talk to a few to see who’s the best of the best. You want to answer the question, “Who can do the best job with my money?”
The person you decide to go with tells you that his typical average rate of return for his clients in a 4 year span is 25%. That implies an upward trend and you may be thinking, “Okay, that looks pretty good. Maybe I’ll let my money sit with his company.”
But hold on a minute. You question him. “Were there any losses?” Your financial guru explains that yes, there were ups and downs in the market, but the 25% average rate of return still stands. And in comparison to other financial guys, 25% is not so easy to come by. So you take the plunge and invest $2,500 with his company.
A Deeper Look At The Numbers
But let’s take a look at the math here: By the end of year 1, your $2,500 investment is down 50% leaving you with $1,250. But you don’t check your quarterly statements so you don’t even notice. Then, in year 2, your investment makes a 100% upswing, getting you back to that initial $2500 investment. But, in year 3, you take another 50% hit. And then in year 4, you come across another 100% increase.
So what does this mean? It means that your financial guru was right. Overall, the average rate of return over the last 4 years is 25%. But that doesn’t necessarily mean you made anything. You actually are back right where you began, less all the taxes and management fees you owe to the financial company regardless of what happens to your money. That is what’s called the actual rate of return–what you actually made.
The lesson here
Stop giving your money out to other people. It’s your money. At the end of the day your financial guy isn’t worried about making you money. He’s too worried about making himself money. You should be in control of your money so you can also be in control of your future.
When you’re ready to make a move that keeps money in your pocket and in your family, you need to be thinking “The Money Multiplier Method.” It puts you in control of your money from day 1. No more hands in the pot. What’s yours is yours. It’s time you took a stand, and with the New Year comes a fresh start–A chance to do things differently. (See how Ray Kroc did it differently when he started McDonald’s.)
