Pick Your Mentors WIsely

It has been many years since I began my financial education journey. I had scoured my world for the best books and speakers who could enlighten me on the " money mysteries" that I needed to learn.

Little did I know that my search would yield such a huge bounty....a bounty that I did not realize I needed to 

cautiously sort through.

Not all gurus, especially the financial ones, are operating out of a spirit of kindness or wisdom.

Most guru's or financial educators, teach about what worked well for THEM, and that my friends, is not necessarily what would work for you.

Yes, there are some general principles which most folks can adhere to, which will help them in their financial journey but there are some HUGE differences in approaches which can mean utter ruin, if you follow a path that is not intended to be YOUR path.

Well, let me just spit it out. There are some financial educators that have a HUGE appetite and willingness to handle risk. They may even advocate taking out your credit card and using cash advances to invest in real estate or some other entrepreneurial activity.

They don't realize that telling someone who does not handle risk very well, to use a credit card in that manner is not wise, and NOT good advice.

There are casualties of bad financial advice all over the world. Folks have been eager to learn and bow down submissively to financial speakers who are full of ego and pride. They followed their advice and wound up broke and near bankruptcy.

Be aware, my cyber friends across the world, that you need to filter through your financial mentors until you find one that suits your personality and risk tolerance. You don't need to accept some loud person on Youtube to become your financial mentor. Be cautious and slow to follow risky advice. Pray and think first before taking financial steps. Ask trusted folks with experience and a wise personality for good advice before you proceed on a new financial path.

I used to be intimidated by those who were very ultra confident. But just because someone is confident, and has a best selling book or seminar series, does not mean that teacher is the right teacher for you!!!!

Be good to yourself friends, and use your good sleuthing and discerning skills to figure out good teachers from the pompous fools. Ask God to give you wisdom in your searching.

God is the Father of wisdom and He delights to lead you into paths of righteousness and prosperity.

Perhaps some of the following financial thinkers would appeal to you.... Let me know in the comments what you feel about their teachings. Are they wise? Do they take reasonable amounts of risk?

examples:

Robert Chilton....( Canadian advice)

Derek Foster....( also Canadian advice....his website is https://stopworking.ca/

The Richest Man in Babylon by George S. Clason

Think and Grow Rich by Napoleon Hill

Well, that's all for today.  Be empowered, friends, with your ability to choose your own teachers in your self led learning journey. 

Peace,

Carla

Let's Chat About Mutual Funds

In Robert Kiyosaki's book entitled "Unfair Advantage--The Power of Financial Education", the author and some of his advisors discuss the pros and cons of buying/selling mutual funds versus other paper assets.

To be frank, Robert is pretty brutal in his analysis of the weaknesses inherent in owning mutual funds.

The common local Canadian-ish thinking in favor of mutual funds is, in essence somewhat patronizing because many folks invest in mutual funds simply because they don't trust themselves to pick their own stocks, bonds or other paper assets.
The idea behind giving your hard earned money into a mutual fund manager's control is because the investor "hopes"  that the fund manager understands the stock market better than the average Jane/Joe ........thus minimizing risk and hopefully steering your money into a nice blend of "safety and growth."

One alarming paragraph that I am going to quote directly from his book "Unfair Advantage--The Power of Financial Education" is from page 134, third paragraph from the bottom of the page:
"Today, there are more mutual-fund companies than there are publicly traded companies. This is how insane diversification has become."

That sentence above speaks volumes as to the state of affairs in the mutual fund industry. Perhaps it is EASIER to set up a mutual fund company than to set up an actual "profitable" publicly traded business. Or is it that mutual funds are just so much easier to SELL to the fearful and "ignorant" public than REAL products and services???

And yes, Robert, I do get the point. I do appreciate Robert's honesty. There is perhaps more potential in gains for those who control the mutual fund companies, than for those who actually invest in the mutual fund companies by purchasing mutual funds units. The fund managers are paid well through fees collected internally from within the fund and these fees are known as the "Management Expense Ratio" or "MER" for short. So even if the mutual fund, as a whole, loses money, the managers may still walk away with millions of dollars gleaned in fees.

Another frightening aspect which Robert's advisor Tom Wheelwright mentions in the same book at the top of page 130 , is that mutual funds are taxed twice. I am hoping this refers just to American investors, but I will have to do some more research as it applies to us Canadians. Robert says that mutual fund investors are taxed when they sell their mutual fund unit due to capital gains tax, BUT he also said that mutual fund investors are ALSO taxed whenever the fund managers generate capital gains within the fund even if it doesn't reflect in a price increase in the value of your mutual fund units. So, theoretically, Robert exclaims, it's possible to pay capital gains tax based on what your mutual fund manager decides to sell from within the fund, even if your actual mutual fund units have LOST value after the date you purchased them. I might also add, that we would also be taxed for any distributions that the mutual fund pays out to the owners.....so that would potentially be a third form of taxation. I wonder if there are any safeguards in that taxation dilemma?And again, just how does this apply to Canadian mutual funds??? 

It seems to me that fear and a lack of confidence play a big part in the investments many folks decide to ultimately choose. Robert is certainly right on this one point....namely that"ignorance is NOT bliss" when it comes to financial knowledge, and that the time and effort it takes to educate ourselves financially is time WELL SPENT.

If you are a financial guru, accountant, financial planner, or just like to pretend you're a financial/investment expert, I welcome your comments to my blog. Let's have a lively discussion on the good, bad and the ugly/pretty side of mutual funds....and Yes, you mutual fund managers are permitted to have your say too ")

Peaceful productivity.

Carla


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