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Highlights from this episode include:

  • The most common, but most financially destructive reason people turn to the internet for advice (2:30)
  • Why the fiduciary standard can prevent the draining of your retirement account and how to make it work for you (5:55)
  • The sneaky way lazy advisors use 1% as an excuse to ignore or mismanage your retirement plan (6:43)
  • How the “wonder twins” of financial decision making sabotage your retirement goals (8:10)
  • Why the desire for anonymity is destabilizing your financial future (10:20)
Read Full Transcript

Do you hate the thought of working past 55 or 60? Do you hate not being able to live the life you deserve today? Do you hate not knowing what your financial future looks like? It's time to stop doing what you hate, here's your host, Mr. Harold Green.

00:19 Hello. Hi everybody. This is Harold Green, Brightree financial and it is time to stop doing what you hate. Today's show. We're going to talk about going to the internet for financial advice. So the title is don't go to the internet or financial advice. I often thought to myself, why is it that people, you go to the internet for financial advice? There's a lot of different reasons that people do that. But before I get into the show, I just want to ask you real quick, how's everybody's week going? Mine is going okay and a kind of up and down. Had some great news, had some not so great news, but that's how life goes. So in my experience in regards to going to the internet for financial advice, I'm often tempted to do just that. We're coming off of Valentine's day and my wife and I, we were celebrating Valentine's day last night and we're in the kitchen and getting things ready and she takes my phone and she says, open up the calculator.

01:19 And I said, okay. I thought we were going to, you know, I thought she had some business stuff to talk about, but what she was actually calculating was how many Valentine's day it has been for us. And it's been about 27 years. And I'll tell you honestly, you do not get through 27 years of Valentines without there being some trust involved. And so one of the reasons why I think people tend to go to the internet because it's put out so much information and people have gotten used to going to the internet or let's say the digital age or financial advice. And sometimes you find good stuff on there. Sometimes you find some not so good stuff on there. So I want to talk about three or four reasons why people go to the internet for financial advice. You guys ready? All right. One, two, three. [inaudible]

02:11 The number one reason why I think people go to the internet for financial advice is, because it's free. It doesn't cost you anything more than what you're already paying, right? It's information you're looking for certain things you don't want to pay for and you're just fact-finding. You're just, you're just data gathering right now. If you're the type of person that is going to the internet for financial advice because you don't trust someone, that's a whole nother ball game, but we're going to get into that. We all like getting stuff for free. Okay? I don't, I don't like wasting my time. I don't like wasting my money and if I know I can get something for free, I'm just going to, I'm going to do just that. I'm just gonna. I'm going to get it for free and then as long as I don't act upon that information before having somebody vet it, I think I'm in pretty good shape.

03:06 But the problem is people are getting financial advice from the internet. It's free. They're not having that information vetted and guess what? A lot of times that information is not in their absolute best interest. I'll give you a situation I I came upon and a client came in and we were talking about investments and things like that. And by the way, I'm just going to go ahead and give you the disclosure now regarding the rapid retire program that I built a few years back. Basically it puts a person in position to retire seven to 10 years sooner than it normally would, but the results of the program are not very user. We're going to talk about investments a little bit and so therefore, past performance is no guarantee of future results. All investments, including real estate, are speculative in nature and involve substantial risk of loss.

03:54 We encourage our investors to invest carefully. We also encourage our investors to get personal advice from their own professional investment advisors and to make independent investigations before acting on any information that we publish. And there in lies the problem. People are acting on information that they find on the internet without doing further investigations. Basically, if you see one or two opinions on the internet, that just kind of makes sense and it jives with the way that you think, then people are inclined to go along with that. And so the client said to me, she said, you know, heroin I found on the internet that you're only supposed to pay your investment advisor 1%. They assets under management. And I said, where'd you get that from? Well, this guy was, and this under internet and so on and so forth. My question was, are they professional money managers?

04:52 Are they ad companies who have something to sell? Are they biased against financial advisors? What's the slant here? Why are they, why are they saying that to you? She, she didn't know. And I said, well, let me break down to you what I charge and why I charge it. And so we went into the fee. We went into all the different software tools that I use to pick the investments and my strategy for watching the investments, my strategy for changing out the investments, my strategy for reporting and all of the different things that goes into professionally managing the client's account. Not only am I a financial advisor, a fiduciary advisor, but I also have the ability to manage money. So under the fiduciary standard, my job is always to give the clients advice that's in their absolute best interest. And when I'm managing their money, I have the same approach.

05:51 Putting investments in these portfolios that I know are going to be in the best interest of the client. When I get technical data that suggests otherwise. And, and I do my research and I do my due diligence and then I, I make those moves. And frankly, you can't do all of that for 1% asset under management. And so I shared with her that, Hey, if I wanted to just charge you 1% and put you on a bunch of mutual funds and send you an email every six or seven months checking in on you, I could do that. That's what some guys do. Quite frankly. It's a lot easier to do that. But when you begin to look at some of these returns on these mutual funds, it's basically in, in some cases, I call it professionals clotting because you're collecting the client's money, charging them 1% and you're not really doing anything.

06:40 You're just picking the mutual funds and you're letting us sit there and you're lighting a ride up and down, up and down. So yeah, anybody can do that for 1% but based on everything that we talked about, based on your goals, based on your desires, based on the planning that we put in place, I'm sorry, I just can't do that for 1% so that you can stay with my plan or you're free to leave and take your money in. Put it somewhere else where they're only gonna charge you 1% so I know for sure that if she would have taken that advice, that would not have been in her absolute best interest. So just because you're getting information for free, you have to vet that information and make sure it is right for you. I know the stuff I'm saying to you guys, it's just plain old common sense.

07:25 But when people make decisions, there are two major factors that go into making those decisions. Number one, fear of loss. Okay? Number two, greed for more. I'm going to say that again and we're one, you fear loss and so you'll make a decision that you think is going to prevent you from losing. Number two, greed for more or the desire to have more. You're going to make that decision based on whether or not you think it's going to provide you with more of what you want. Okay, so fear and greed. I call them the wonder twins and they can wreck a person's financial life and I'm going to do a show later on down the road. Call fear and greed. The wonder twins. Okay. All right. Other reasons why people go to the internet or financial advice is because it can be done from anywhere, right?

08:15 You're sitting in an airport waiting on the plane. What do you do? You're on your phone, you're in the doctor's office. What do you do if you're on your phone, you're in charge in some cases, what do you do? You guys are phoned on your lap and you, you checking stuff on the internet. It can be done from absolutely anywhere in the convenience, in your home or your home or the comfort of your anywhere. It can be done from absolutely anywhere and so I think it's a great convenience to be able to, to find information and check information, but again, it's the source, right? We're talking about getting information from the internet. Number three, I think one of the biggest reasons why people go the internet for financial advice is because they do not have to reveal their personal information. And I see this a lot when it comes to people looking for financial aid advice on the internet, or they're going to the colleges websites and they're plugging in their financial information because number one, they're afraid.

09:16 They're afraid that they can't afford college. And so they're looking for every bit of comfort that they can find and they're looking on the internet for that information. So they go to the college's website and they plug in their data and they're looking at these cost calculators and they, you know, sometimes they don't plug everything in. And then sometimes the schools don't tell them the whole story. It's just based on a sample of information that they plug in and they bring this stuff in and we run our own numbers because we have our own software that's way more detailed than that. And we tell them, Hey look, you know, we got that. You got that advice for free. But guess what? It's not accurate. It's incomplete based on everything we see here. This is what is really going to cost you for college. So therefore we need to plan and figure out how to protect your assets so that you can get yourself to and through college without going broke and spending down your entire life savings and still be able to save for retirement, but revealing personal information.

10:16 That's a, that's a very important thing, especially in this day and age where, I mean you can be hacked or cyber attacks and different things like that, ransomware and and so on and so forth, but I do think it's a good idea to be able to search for information without having to reveal your personal information, but again, you have to be able to vet that source of information and make sure they are not trying to sell you something. I'll talk about that in a minute. Another major reason why people go to the internet for financial advice is because they don't trust traditional financial advisors. They don't trust traditional financial advisors and financial planners. I think there was a survey done a while back and it was about titles, titles that people hate the most, and financial advisor planner. Those titles had some of the highest unsatisfaction marks when it comes to, what do people think when they hear the term financial advisor?

11:24 And it's like, Oh, you know, that guy's just going to take my money, or, Oh, that guy just has something to sell me. And so you go to the internet and you're getting advice from the internet because number one, they don't have anything to sell you per se. But here's the thing, you got to understand when you're reading these articles on the internet and they're giving you financial advice, you have to understand what their slant is. What are they trying to do? Is it a blog of another advisor that's, that's a, it's a paid type of where this person paid money to get in that spot on the internet. And so therefore they're saying things in their, in their article to get you to come their way. Is that what's going on? You have to understand that and you have to vet that information and make sure they don't have anything to sell you.

12:10 And another thing I think is that people hate, they hate the sales process. Right? You know you're not ready to go through that process where someone, they get you in their office and now you know they're asking you all these things and trying to take you through all these things to see if number one there is something you're afraid of. Or number two you have greed for more because if, if there's a way they could, you know, get you to buy their product based on fear or greed, they have you right there and that's not in your best interest. I'll tell you something that happened to me. We live in a condo and we have central AC and when you have central AC basically there is a fan coil unit and then on top of the building there's a chiller. And so the chiller sends the cold water down to your fan coil unit and the fan call is basically a big fan that blows out cold air through your entire unit.

13:03 And so our drain pan at the bottom of it there, the condensation began to build on the drain pan. And so the service guys came into service the machine and we said to them, I said to them, I said, Hey, why is there so much condensation on the bottom of this pain? And when we bought this place, you, you read it, the system here, we had no problems. I said, all of a sudden it's been about five or six years that we've had maybe seven that we've had the place and now we're starting to see all these problems. And to be honest with you guys, they could not give me a straight answer. They said, maybe you got to do this, maybe you've got to change out your system. Maybe the system is getting old. And I'm like, wait a minute, that doesn't sound right. I am not about to pay $10,000 to change out the system.

13:49 And so what I think is going on is something with the building itself and how they're trying to cut costs. And so they're lessening the efficiency of the system. It's not working as well as it should in order to cut costs because they're probably changing the power settings on it. And so on and so forth. And we're getting that condensation inside. And so my wife and I, we took a trip to Japan and they had electronics and electronic sales going. I think it was what they call their Japanese black Friday. And that's before coronavirus. And so we picked up a couple of different things. Number one, we picked up a Japanese dehumidifier and I think it was about a couple of hundred bucks and we brought this stuff home and we plugged it in. And next thing you know, we have, we have no more issues with our fan call unit.

14:33 The problem was the air intake was bringing in too much hot air from the outside. And I feel the people that were coming in and servicing the machine, you know, they've been doing this for since the building was built 20 something years ago. That's information that, that's information that they knew or they should have known. However, I feel that they were not acting in my best interest. And so when you're out there getting information from the internet, I'm going to encourage you guys to do a couple of different things. Number one, you have to make sure that you sit down with a person that you can trust and vet that information through them. You know, if you've been burned by somebody before and you've been taken advantage of, I feel myself apologizing for those types of situations a lot. And one of us, I find a client that comes in and they've been taken advantage of for whatever particular reason.

15:30 I do my best to either work with them in some kind of way or the other to recuperate the things that they've lost. Okay? And so my job again is to make sure that I'm always doing things that are in their absolute best interest. And so that's, that's my main thing. And number two, you have to be aware when somebody is trying to sell you something, take a, take a deep breath, take a step back at the information that you need from a professional. Take a step back. And if you've never hired anyone before to help you, the first thing you have to make sure is that they're creating a long term plan that's in your absolute absolute best interest, okay? You take that information, you go home and you sleep on it. If you want to do some research, you can do some research on that, but don't go to the internet looking for ways to debunk what you're being told, okay?

16:18 If I were you, I would maybe go sit with another advisor. The problem is lack of trust. The reason why people go from advisor to advisor to advisor is because of a lack of trust, okay? So make sure you're vetting your information, all right? And make sure that it's in your absolute best interest. And if you like me to take a look at your situation to help you stop doing some of the things that you hate, do me a big favor. Go to retire now, retire well.com download my rapid retire brochure, click on the game changer form. Fill out the information, submit it, and then I will be in touch with you. Just start doing some of the things that you hate. So again, people go to the internet for advice because it's free. It can be done anywhere. You don't have to reveal your information, which is pretty cool. And then the other reason is why they don't trust it. Financial, traditional financial advisors. I want to give you a reason to trust again. Have you been burned and taken advantage of? I want to be the one to come in and help you make those things right. So download the information and get in contact with me and I will help you stop doing the things that you hate. Until next time you guys, one, two, three. Let's get it.

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