Shakespeare's Hamlet has one of the best father-son speeches of all time. Maybe not as great as some of the humdingers my dad delivered on the farm, but the bard's words are at least printable. I even forgive Polonius's "neither a borrower, nor a lender be" since that is still good advice for those in danger of borrowing just to eat bon bons. But the reason I like this speech so much is because its final directive "to thine own self be true" is the key to financial freedom.
Individuals who are self-reliant, resourceful, and conscientious can create, build and maintain wealth and abundance in their lives. And these investors discover that:
- a bad economy doesn't hurt their wealth-building,
- neither insiders nor pundits can mess up their investments,
- they shouldn't pay extraneous fees that dampen rates of return,
- the reliability of social security is irrelevant.
And so, no, Shakespeare, or at least his character Polonius, would not have relied on Social Security. In fact, trusting the government was about as responsible back then as handing money over to a wealth manager is today. Yes, that's right, I'm saying it, batten down your hatches if you can't take it. ... I advocate against trusting your money mindlessly to others, whether the government or a mutual fund.
This isn't personal. I believe that when FDR created the Social Security Act of 1935 he did so with the best of intentions and the brightest of ideals. And I'm sure many money managers only want world peace like the best of beauty queens. But the systems in which the government and money managers reside are, as we all know, flawed. And yet, to my continued amazement, too many people choose to trust their futures to these systems.
Now, you might say, what's so bad about trust? Well, as we've seen in the last few years - a lot. But it's not your fault that you've been a trusting, "let the experts do for me what I can't do for myself" kind of person. You've been conditioned that way for years, by generations before you and the very skilled advertising agencies that work for the financial institutions.
I'm here to make you a little less comfortable with that decision.
I'm clear it's not kind to make anyone uncomfortable when they're in pain from a bad economy. But, from what I've observed, too many people have already forgiven the causes of the current economic consequences. Investors seem ready to pour money back into mutual funds or build up 401Ks. It's as if we want to treat the financial misdeeds of the last few years like some kind of "bad stage" those Wall Street kids went through, a temporary teenage attitude adjustment like purple hair or a pierced forehead.
But it's not a stage. And it is imperative that we stop trusting our money to others and start being true to thine selves.
If you'd like to fast forward to financial freedom, consider these five TIPS FOR BEING TRUE TO THINE SELF:
SAY NO TO LAYERS. Sure, it's good to layer on a hike in the Appalachians, but when it comes to the middlemen of money there are too many layers between you and your returns. When you give (and that's the word) your money to a money manager, big bites come out of your return in the form of fees and expenses. If the mess of mixed mystery funds didn't scare you away, the fees should.
INVEST DIRECTLY. Cut out the middlemen. Find assets that interest you, do the research, talk to experienced investors, and invest in one thing at a time. Whether it's real estate, private ventures/businesses, or even individual stocks and bonds, buy the asset directly from the seller and stay away from the emotions and confusion of the markets.
BECOME A VALUE INVESTOR. A bad economy can become a fire sale. But how do you buy smart and cheap? During the 1930's Ben Graham and David Dodd developed an approach to investing at a discount. Graham's book The Intelligent Investor, which Warren Buffet called "the best book on investing ever written" and about which you can read more here, is a must-read for basic valuation techniques steeped in fundamentals, not hype.
BECOME AN ENTREPRENEUR. This country was built on the sweat and savvy of entrepreneurs. You have what it takes to seed the dream of owning your own business and building real wealth. Make this a legal entity to retain more of what you make and take away your reliance on Social Security. And to ensure it's legitimate ...
CREATE A CASH MACHINE™. This is a plan to start a revenue generating business quickly. You can bring in $500 to $1,000 extra cash a month. And that's just to start. Audio excerpts of my new book Put More Cash In Your Pocket are available free here.
I'd like to hear your thoughts. Call in to the Loral Langemeier Show at 877-777-7713, Monday through Friday, 7 a.m. Pacific, 8 a.m. Mountain, 9:00 a.m. Central, 10:00 a.m. Eastern. Or listen to the podcasts at LoralRadio.com.