Shrink Money Advice: One Thing to NEVER do with Your Money
You work hard for your money. Perhaps you have been fortunate and have sold your overpriced home and moved to our community where a $250,000 house is still possible. Perhaps a previous generation was fortunate as were you and you are now sitting on significant cash.
Most Canadians don’t like to manage their money. It’s likely why we are told that more than half of Canadians if hit with an emergency wouldn’t have enough to cover those sudden expenses not to mention if their jobs suddenly evaporated.
One solution to this problem that we have been lead to believe in is that the government, the local investment advisor at your bank or pension from work will take care of all of this for you. You don’t need to think about it just hand over your money each time you get paid and all will be good.
It’s not true. You should never hand over your money to other people to manage without being totally aware of what will happen to that money when you let it go. You need to learn about and take control of your investments. You need to understand the differences between an investment and a speculation. If you are spending most of your take home pay on the family home you are wasting it. It is not an investment. It is an expense and in my next column I will tell you why.
Thousands of years ago if you worked all summer to raise and grow food for your family you likely wouldn’t have given it to a stranger to store for you to later give back to you when you needed it. You would have fought (and many of our ancestors did) to survive and prevent someone from stealing your ability to stay alive.
For some reason over time we as human beings have put our future financial security and ability to survive in the hands of someone else. You should never let someone else have total control over your money.
I’m not a financial advisor or planner or accountant of any sort. I do understand however the psychological principals that are at play when it comes to how we behave with money. My goal of this column is to help you get confident to ask those important questions to make sure your money is safe, growing and invested properly. What can you do today? Ask for a detailed description from your financial advisor if you have one, of the very detailed boring description of what they have done with your money. The places they are invested and the risks and returns of those investments. You can NEVER let someone else do this for you.
Dr. Henry J. Svec is a clinical psychologist practicing at www.osrclinics.com He is also the author of a regular ITunes podcast and recently released book Shrink Money Advice: From Millennials to Boomers how to Invest Today