Sunday, May 6, 2012

Asking the right person for advise


You would think it was obvious, but people ask the wrong people for advice all the time.  I’ve been a stockbroker, and I am a real estate investor.  I believe that I have a decent understanding of both markets, but I'm not an expert in any field.  I probably never will be.  Why?  It isn't the type of person that I am.  I like to learn new things and would rather have knowledge in many areas.  If I don't know something about a particular area...I would consult with an expert in that field.  Some people thrive on being an expert, however this isn't the type of person that I am.

I also know a good deal about bonds.  I spoke with a captain in the Air Force a few weeks ago and we talked about EE and I bonds as well as TIPS and Treasury notes.  He seemed excited about investing in them from what he told me about his risk tolerance and tax reduction he was looking for.  A week later he said he wasn’t sure about investing in bonds.  He said he spoke with his broker about these types of investments.  Of course, the broker didn’t like them, and managed to discourage him from purchasing them.

I told him that you wouldn’t talk to your stockbroker and ask whether buying an apartment building would be a good way to diversify would you?  If you did...they would probably tell you to invest in a Real Estate Investment Trust (REIT).  So, why are you talking to your stockbroker about Savings or Treasury bonds?  They cannot make money off you if you invest in them.

Remember who you are talking to about your investments.  Many brokers have a vested interest to steer you clear of anything that will reduce their assets.  That is right...their assets.  You gave up your assets as soon as you forked your money over to them.  Some brokerage firms are only interested in making themselves wealthy.  Sure they hope you don't lose money, but the broker's top priority is figure out a way to make sure you do not withdraw your money and move it somewhere else.  Smoke and mirrors is the name of the game when it comes to many of these sales people.

I’ve been studying for the CPA since late February.   I took an auditing course last year in preparation for taking the CPA.  In auditing, they drive home the importance of independence.  This holds true when looking for help with your investments.  Finding someone who is impartial can be a huge advantage, but they are very rare.  Which is why managing your own finances is a skill that is critical to becoming a Military or Civilian Millionaire.

After failing my first CPA exam by one point I needed to rethink why I am doing this.  Why am I wanting to get my CPA?  After all...this studying is taking time away from other things I would rather be doing.  My kids are going up so fast.  I really want to help my oldest daughter to play basketball better.  The weather is getting nicer, and we all enjoy going for a swim.  So, I wanted to be sure that getting my CPA is something that is important enough to obtain while putting aside some of the things possibly more important to me.

I decided that continuing the journey regardless of how horrible...must be completed.  In a previous article I talked about getting a CPA was a goal I set in high school.  But why?  Why put myself through this punishment when it isn't even required in my field of work?

I decided that getting my CPA would be important for my kids.  The knowledge that I can share with my kids and experiences that I am going through will help them in the future.  If they saw that dad quit, then I cannot argue with them if they wanted to do the same.  Having something this challenging is worth doing.

Sometime in the future I want to start a CPA firm.  Some people are counting on me to get this certification.  I think I can help create some jobs in the area, and more importantly it can be a family based business.  I would have a home office, and would charge less than my competitors.  Instead of investing in Wall Street, and can invest locally.  A large percentage of people would much rather work for themselves than someone else, but I think a major hurdle that people face is health care.

I'll end this article with one of my favorite quotes, "Remember that free advice...is sometimes the most expensive."

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