Nobody cares more about your money than you do

This article is the 12th of a 14-part series that explores the core tenets of Get Rich Slowly.

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.

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 ten times more than he would if you bought term.

If your lawyer tells you to create an 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″ 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 these 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. Other parts include:

Look for a new installment in this series every Monday through the end of the year.

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Craig Ford
Craig Ford
10 years ago

I think that often times we falsely underestimate our ability to understand the workings of personal finances. As a result too often we seek to outsource financial decisions. As you say that can be a very dangerous decision. We would do well to remember that just because some knows (or claims to know) more about finances does not mean they have any idea about what is best for you to do with your money. Gaining a little financial self confidence opens the door for you to learn and understand important financial concepts.

Rob Bennett
Rob Bennett
10 years ago

The problem is that none of us can possess expertise in all of these different areas. When I was signing papers for the closing of my house, there were all sorts of questions that came to mind. I had to trust the agent to be telling something close to the truth. We just cannot get through life without trusting some people re some things. When it comes to money questions, that’s problematic. You’re absolutely right that those who act in the role of money “experts” often have a financial incentive to push us in one direction or another. That incentive… Read more »

friend
friend
10 years ago

Hi JD — Quick note — I think you may not have meant to use living trust and living will interchangeably. At least in my state, they are different — the living will deals with end-of-life decisions, while the living trust is about your financial estate.

Writers Coin
Writers Coin
10 years ago

The best feeling in the world is when an “expert” tells you something, you research the hell out of it, and come to the same conclusion on your own. To me, that’s how trust is generated. Next time that expert gives me advice, I’ll still research it on my own, but there is some degree of trust there that helps move things along.

lostAnnfound
lostAnnfound
10 years ago

In the past I have fallen for that “limited time offer” on a few occasions. Thankfully I’ve become more educated & understand that rarely is that the case & have learned to say “No thank you” when someone pulls that line on me. I was TOO trusting at one point in time. Now, like you said, I do some research on my own.

Jonasaberg
Jonasaberg
10 years ago

I’ve done both; listened to others and done it their way and done my own research and made decisions on my own.

I was (and still am) much more content with the latter. Even if I’ll lose money I think I’ll be more content with it since it was MY decision, noone elses. It’s MY mess or success, *I* own it. Not sure why that feels great but it does.

Mark Foo | 77SuccessTraits.com
Mark Foo | 77SuccessTraits.com
10 years ago

Take 100% Responsibility for Your Own Financial Well-Being! I agree with you, JD. I never believe in taking somebody’s words just because he/she is an expert. I always believe in doing my own research. Blindly following the advice of the so-called experts was the reason why a lot of people in Singapore lost their life savings when Lehman Brothers fold up last year. All of these investors bought a highly sophisticated structured product without understanding what it is and what kind of risks were involved. They simply chose to blindly follow their advisors’ advice. Alas, tragic ensued… Here’s a great… Read more »

J.D.
J.D.
10 years ago

@friend (#3)
Oops. Thanks for the catch. That was a plain and simple brain fart. I meant to use “living trust” in each instance. I just wrote the estate planning section of the book, so I’m quite clear on the differences, but sometimes my fingers don’t obey my brain. 🙂

Thanks.

Mark Wolfinger
Mark Wolfinger
10 years ago

“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.” This is obviously the best possible advice. But individuals who are unsure of themselves in a given area just trust the ‘professionals’ to know what to do. The fact that this is a very foolish way to act does not change human nature. We trust doctors (ok,… Read more »

Little House
Little House
10 years ago

Great advice. I especially like the thneeds reference from The Lorax. I always read that book to my class on Earth Day. 🙂

I think that too many people trusted others with this whole real estate melt down. In my neighborhood houses exploded to over $500,000, and people still bought them! The houses in my neighborhood are old, small, and need a lot of work. The neighborhood is OK, but not great. These houses have leveled out now to high $200’sK, low $300’sK. I definitely think that research is important before making a big money decision.

Ben
Ben
10 years ago

Art of nonconformity recently posted something related. He felt pressure to hire a VA for the work he didn’t want to do. While not all, a lot of folks who hire professionals to take care of all their money issues: bookeepers, lawyers, financial planners, CPAs are doing it to avoid doing it themselves not because they need professional help. This isn’t always the case and professional guidance may need to be a part of anyone’s financial plan depending on one’s circumstances but unwillingness to take ownership of your finances is part of it. We need to care about our own… Read more »

Tomas Stonkus
Tomas Stonkus
10 years ago

@ Mark Wolfinger: If you don’t mind I have a suggestion for people that still follow others blindly. If you or your friends fall pray to this trap, then at the very least find the best people out there with a proven track record of putting your interests before theirs. Of course that will take some time to find, but in the end you should be able to rest easier. @ J.D.: Nobody cares about your money more than you do. That is true. And like many of the things that you suggest in the article such as doing your… Read more »

Dustin | Engaged Marriage
Dustin | Engaged Marriage
10 years ago

This is great advice and a good reminder. I find that those giving the advice are not necessarily trying to choose their interests over your own. In some cases, they really don’t know better and other times they have started to believe their own hype to the extent that they really feel their product or service is the only way to go. Frankly, the same could be said of relationships…nobody cares more about your marriage than you do. I love to give what I feel is high-quality advice on that topic, but I suppose I can at times get narrow-minded… Read more »

George
George
10 years ago

Great point. In the financial industry people think that they are receiving advice. But actually they are just getting a sales pitch. It is super critical to keep in mind who is going to take the loss if the “advice” doesn’t work out. It’s always the buyer, never the salesperson.

Suzanne
Suzanne
10 years ago

My family is a stunning example of this. One of my parents is a dependent person (I won’t go into detail) and my grandfather left money in trust to take care of that parent. My sibling and I didn’t know what to do with the money, so we hired a financial planner who had all of the best credentials and references, even having a show on the local NPR station. Fast forward 18 months (this was in 2000-2001)and that planner lost 40% of the money entrusted to him to care for someone who could not care for themselves. Fortunately we… Read more »

Gary
Gary
10 years ago

A very good article. I research everything prior to purchasing and it seems like I still get caught by every scammer out there. Sometimes it seems that only scammers advertise, and if there are any reliable sources, it is impossible to locate them or there are so few they are hidden in the mass unethical.

John Paul
John Paul
10 years ago

I agree with writers coin. Once you the advice, do your own reserach, the net has an unlimited supply of information. If your research mathces the advice you were given then it is safe to think that person has your best interest at heart.

getagrip
getagrip
10 years ago

My biggest problems came when I was fresh out of college and had my first decent job. Went to get a car and heard “oh you can afford that payment per month”, got a second car for the spouse, “oh, no problem with making that payment”, got the house, “you can easily afford the monthly payment”. The point is not one of those people lied or was trying to rip me off. I could afford it all provided I stayed employed. I just couldn’t afford all of that and eating out most nights, taking expensive (or even not so expensive)… Read more »

John DeFlumeri Jr
John DeFlumeri Jr
10 years ago

I meet people often who are extremely careless with their money and their identity. It always shocks the hell out of me!

john DeFlumeri Jr

Aaron @ Clarifinancial
Aaron @ Clarifinancial
10 years ago

So, so, so true. “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.”

Advice always carries biases with it, even if it is made out of ignorance. Take time to understand those biases and consider other viewpoints. Figure out your purpose, set your goals, and be steadfast.

Shara
Shara
10 years ago

What’s funny is how this relates to the paralysis of choice. Many people TRY to do exactly what you recommend and then wind up overwhelmed by information. And sometimes deals ARE limited time only. If you see a house you want to make an offer on and the real estate agent tells you to make an offer ASAP, she might not be blowing smoke to put the pressure on. Now if she tells you to make an offer on the first house you see you should be skeptical, but if you really like a house she would be remiss in… Read more »

Investor Junkie
Investor Junkie
10 years ago

Without question one of the basic rules of money and in-fact have this as my “Rules of Wisdom”:

http://investorjunkie.com/rules-of-wisdom

Con-artist or otherwise, it’s YOUR money make sure it’s being invested wisely.

Kevin
Kevin
10 years ago

Great article. I think this rule, along with the “Spend less than you earn” rule, are the two most important pieces of money advice a young adult can ever hear.

Thirtysomething Finance
Thirtysomething Finance
10 years ago

Part of the problem (ironically) is that there is just SO much information out there — sometimes it’s difficult to process it all into making the best decisions. Cass Sunstein and Richard Thaler discuss this problem in support of their philosophy of libertarian paternalism in their book “Nudge,” which I highly recommend and intend to review on my blog.

Richard
Richard
10 years ago

It is good to NOT trust anyone, however cynicism can backfire and leave us wondering why we can’t find that ten bagger. I think, and agree, that research is the greatest tool we have on our side. While we don’t need to trust everyone, we do need the tools to research what we are being told. The Net is rich with information and there are no excuses for parting with our money to scammers.

JenK
JenK
10 years ago

My biggest problems came when I was fresh out of college and had my first decent job. Went to get a car and heard “oh you can afford that payment per month”, got a second car for the spouse, “oh, no problem with making that payment”, got the house, “you can easily afford the monthly payment”. The point is not one of those people lied or was trying to rip me off. I could afford it all provided I stayed employed. GetaGrip – Ah, but you see, you’re supposed to be frugal in every OTHER way. Just like how in… Read more »

Tyler Karaszewski
Tyler Karaszewski
10 years ago

“If your favorite personal-finance blogger urges you to invest in index funds, don’t just take her word for it.”

This is the most blatantly wrong use of this feminine generic personal pronoun thing that I’ve seen yet. In this sentence specifically, it should be ‘he’. 😉

ami | 40daystochange
ami | 40daystochange
10 years ago

Yes, do your own research. But don’t let fear of not having the perfect answer stymy your goal of getting into the market. Set a time or resource (# of blogs or books or advisors to consult) limit or figure out what your objective is in doing the research and stick to it. When you hit that time/resource/other limit, get in there and DO. Invest, try, risk. You can limit your risk by reducing the amount of money involved, but you won’t really learn what works for you until you get out there.

Craig
Craig
10 years ago

So true, people may give their two cents but everyones situation is different and only you really know or care about your own situation. No one cares, they don’t have the time to.

Wojciech Kulicki
Wojciech Kulicki
10 years ago

Loved the link to 7 psychological strategies. I’ve felt like I’ve been conned a few times in my life, and without a doubt–one or many of those strategies were in play each time.

It’s hard to pull yourself away from the situation, but sometimes the best strategy is just not get started with it in the first place. That’s where blogs like this come in handy so we know all the places these cons are hiding.

Cathy
Cathy
10 years ago

A salesperson’s job is to part you with your money. They want as much of it as possible. They have incentives to do so. So you’ve got to hold tightly onto your money. Because everyone wants it. I was looking at buying condos a couple of years ago. It would have been at the peak of the bubble, but of course we didn’t know that then. The realtor was a very nice lady that I trusted, but she was pressuring me to make a decision. Not because she was slimely, because she certainly wasn’t. She just had a financial incentive… Read more »

LiveCheap.com
LiveCheap.com
10 years ago

JD, Spot on with this one. Nobody cares about your money and your well being like you do. Almost everyone that you find out there has an angle and knowing what that is helps you work with them. People underestimate their ability to handle their own stuff because they think they can’t be competent. It doesn’t take that much research to be competent in something. I work with many, many different professionals and unfortunately, many of them border on incompetence. They mean well but they are often blinded by what’s best for them and not for you. Real Estate agents,… Read more »

Rick Francis
Rick Francis
10 years ago

>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. If you want better than the entire market invest in small cap and/or value index funds. I made the mistake of trying to beat the market when I was younger- it’s REALLY hard to do in the long term. That is why most professional managers don’t beat the market. Even if you are the next Warren Buffett you need half a million dollars to make picking individual stocks… Read more »

James from Tech for the Masses
James from Tech for the Masses
10 years ago

Great tenet. Why the addition for an extra one again? Heck I imagine, over time, you’ll need more then 14!

It’s totally true that no one is more interested in your money then you. Although not everyone is a con-artist even people you hire to help you still won’t feel the brunt of losing your money like you will.

Lili
Lili
10 years ago

We made the mistake of listening to our mortgage broker, who had been a friend of mine for over 20 years. He suggested we only put 15% down on the home we purchased in 2007, and use a 5% 2nd loan for the rest. (This would allow us to keep some cash in savings which was earmarked for our child’s private school tuition.) Well, I got sick and couldn’t work, we tried to sell but the market was careening downward faster than we could keep up. Now we’re entrenched in the short sale process, which is made worse by that… Read more »

San Diego Attorney
San Diego Attorney
10 years ago

Any “expert” who pushes a sale on you is not someone you should trust. Get multiple opinions and ask questions. If you feel pressured to make a decision, that person or business is not right for you. As was said many times, “no one is more interested in your money than you.”

Ken
Ken
10 years ago

Great advice. We best research our own choices. We alone are accountable for them afterwards. People need to check references of these ‘experts’ as well.

David/Yourfinances101
David/Yourfinances101
10 years ago

The title of the post says it all-nothing else needs to be said. When you say no one, I think you really mean NO ONE.

Take this one to heart!

Rosa
Rosa
10 years ago

I worked in sales a long time, sales support, advertising sales – the thing about salespeople, even when they’re honest, is that the *best* salespeople really believe in what they’re selling. They can be completely misled (because they tend to be optimistic, people-liking people who think they’re smarter than the average bear) and then sincerely, with great verve, steer you completely wrong with no ill will at all. A family member with an MBA keeps losing money on high-fee investments sold to him by friends, and trying to get me to buy into the same stuff he’s into – even… Read more »

Kate Rookes
Kate Rookes
10 years ago

As a real estate agent I tell my clients to listen to their agent’s advice, but make their own decisions. As I have their best interests in mind, and I try to be the “head” in the transaction, while they buy on emotion using their “heart”. Ultimately, only they truly know how much they’re comfortable paying on a mortgage each month, or the minimum amount they can actually accept for their property.

mythago
mythago
10 years ago

This is an excellent point, but what I’m surprised not to see is an admonition to ask “why”. Sure, you can smile and nod and just go do the research on your own, instead of asking the professional you are paying “Why is choice X for me better than choice Y?” or “What is the reason you recommend I do Z?” If you absolutely cannot trust a professional you hire, then why are you bothering to hire them? You’re no better off than if you’d done all the research yourself, except you’re also out the fees for paying a professional… Read more »

Aaron @ Clarifinancial
Aaron @ Clarifinancial
10 years ago

@mythago I have to disagree with you. You don’t hire experts to tell you what to do. Believing the argument of someone else could be expensive and dangerous, especially if that person is not a fiduciary. People who make sales or give advice for a living have significantly more experience dealing with the subject matter at hand. If their client raises an objection because of other research they did, it should be easy for that expert to refute – it’s their job after all. And being an expert means they naturally have the power of asymmetric knowledge on their side.… Read more »

Ryan
Ryan
10 years ago

As I read this post the acronym A.R.M. popped in my head!

If only you would’ve been able to teach this to those who blindly listened to their mortgage brokers when they said they “could afford the house… and oh, by the way, their payments might move up in a few years.”

Thinking critically is what separates average from great and is a shield from making stupid choices.

Ryan @ Plantingdollars

Dennis Gravitt
Dennis Gravitt
10 years ago

Great article JD!!! You were on target. What a travesty it is that “Financial Advice” is so often contingent on the sale of a product. It has created a financial system full of flaws and loopholes. Sadly, we have an entire retirement planning platform that not only encourages, but also rewards predatory practices.

I am the owner of a Registered Investment Advisory firm, and agree wholeheartedly with JD’s perspective. I wrote a blog back in January discussing this topic:

http://www.longrunfinancial.com/blog/page/2/

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