Why Investment Should Not Be Like a Las Vegas Weekend

Some of my clients know that I hold a Series 65 certification (“Uniform Investment Advisor”) granted by FINRA after a very rigorous study and examination on the laws and technical behavior governing the financial products (“securities”) available for people to buy—in hopes of positive gain. Investment used here is a narrower term than I and other students of economics use. I include investment of time and money into one’s own business (“entrepreneurship”), skills, education, and experience, also in hope of gain in the future.

Let’s call the former “Passive Investment” and the latter “Active Investment.”

My work in this field reinforced for me why I NEVER offer professional advice on either. As I mentioned in my book, Stop Being Poor, a good investment is one you know and can control, to the greatest extent possible, the risk of losing your money. Not to be totally negative, you can also make as much money as you can.

Clearly you can understand and control your self and your business the most, and stocks and mutual funds the least. So where are you putting your money? Not only is it illegal for anyone selling you a security—like those in your IRA or 401(k)—to guarantee they will grow, but also that your money won’t be lost. Wall Street (and those kinds of advisors) get paid either way. If you pursue your own active investment you also have no assurances, but you are in control of your destiny.

The Series 65 is accepted by most states in which one offers himself out as an “investment advisor”, but this does not grant anyone a crystal ball. I joking think of it as someone whispering in your ear as you sit at a gaming table in Las Vegas. It doesn’t really help.

So even though I know the same things they know, I choose not to engage in what they do. What I do is demonstrate objectively where to store and grow your money safely, and the best way to finance the investments and lifestyle purchases you choose. In the end, these selections have a dramatic effect on your financial success. Something you can actually understand and control in an increasingly complex world.