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What’s going on, everybody? I’m AK and welcome to the minority mindset. Now, what if somebody came up to you and said, Listen, buddy, I’m gonna take care of all your finances. You’re not gonna have to worry about it. I’m gonna invest a little in gold. I’m gonna invest some in apple. You could just sit back and relax. Your retirement is in great hands, and all I want in return is just a small fee for my service is would you believe that person? Well, it depends in this video. We’re gonna talk about whether you should hire Financial Advisor or just invest in yourself.
All right, guys, I have to be honest with you. When it comes to financial advisors, I hate them. Most of them are just glorified salesman who don’t know anything about markets. And their only objective is to rip you off. Yeah, leaves a terrible taste in them. But I also got to be honest and say that my best friend is a financial advisor. Plot twist. But don’t worry. He’s actually a good one and threw him.
I’ve learned the good that a financial advisor can actually do for their clients So yes, I have a much more balanced opinion now, so let’s go over the downside in the upside of having a financial advisor. OK, so the downside is basically what I explained already, these guys a lot of times or just salesmen, they don’t have your best interest in mind. The big problem with the financial advising industry is misaligned incentives.
So when you talk to a financial adviser, they’re gonna go through and show you a set of investment products. But each one of those different investment products come with a different bonus for that financial advice. And that’s because a lot of their industry works on commission. So that’s why I call them kind of sales. So what happens is that instead of putting you in something that’s the best for your financial health, there might put you in something that’s gonna give them the biggest bonus misaligned incentives. And these aren’t small bonuses, either.
These air bonuses in the tens of thousands of dollars, so these guys are way more incentivized to put you in something that’s gonna pad their pocket. And that’s why I see so many people in the complete wrong investments that just don’t match their lifestyle or what they should actually be doing. It’s not their fault when they got a bad financial advisor in their ear. And it’s not just financial advisers, either.
Its investment managers in general 401 K money managers make $17 billion in hidden fees each year, and these are the hidden fees. This is on top of the fees that the normal person is already paying that they know about. It’s ridiculous, and these fees over time they can reduce your retirement by as much as 60% and then on top, all these fees and these misaligned incentives. Most of these guys are salesmen. Like I said, right, they don’t know anything about Mark. It’s their only job is to pick a product that’s gonna pay them the most, and then push that to you, make you buy. For example, there is this one financial advisor that I met, who had all his money, his personal money in a small micro cap stock.
It was extremely risky In his whole life. Savings would move up and down every day by swings of 10% 20% 30 and then remember, that’s up and down. It made no sense. And this is the guy who is advising other people how to manage their money. Are you kidding me? But okay. Okay. These are the bad financial advisors. Right? But there are also good ones, like my friend. So Ah, good financial advisor who doesn’t know about markets? They can really help you because their job isn’t just to help manage your money. It’s to educate you two. And that education is gonna help you with one of the most important parts about being in the market.
Emotional control Investing is mostly getting into a company and just holding it. And being patient, there’s gonna be ups and downs. But you hold on. If it’s a good company, that can be very difficult for people. Because the emotions, with your money on the line, they’re not easy to deal with. And they’re especially hard to deal with if you don’t know how markets work. So a good financial advisor can fill that role of your educator and help you with those things. And not only that, but if you talk to my friend, he’s not just these people’s financial advisor.
He’s basically their therapist. They come to him with their finances, but they come to him with everything else to Ah, good financial advisor will also become a quarterback for your finances. Finance gets really tricky, especially with the law’s changing all the time. With Trump changing things, you know, it can be really complicated. So if you have a good financial advisor who is completing that wealth management role for you, they’re able to look at everything and they’re going to stay on top of it. So if some tax law changes and you should actually have your money split across two properties instead of one because of Section one, ABC whatever that your financial advisor should know about that and alert you to it so he can help you protect your money and all these tax strategies, estate planning, accounting all this stuff. It’s a lot.
You need someone to do it like, for example, me. I trade and invest, but I don’t have time to keep up with all that stuff. That’s not really my job. That’s not my expertise. So that’s where a good financial advisor or wealth manager can help with that. So should you get a financial advisor or Should you just learn yourself? Well, what I tell people is that you need to educate yourself enough so that you could actually pick a good financial advisor. Because if you go in knowing nothing, guess what, They’re gonna fleece you.
A lot of these guys might be crooked salesman, but they are very good at being crooked salesman. Most of us don’t have a chance unless we educate ourselves. You need to know the basics about finance so you don’t get screwed over and you could pick someone who’s gonna help you. It’s just like you need to know the basics of health. Like you got to know that you can’t eat cake and ice cream every night, even though it sounds off. Man, that sounds so good.
That’s not gonna work out for you, though. Now, whether you want to go beyond those finance basics, that’s up to you. I mean, some people use financial advisers, Some people do everything themselves, and some people are just in between. They do a bit of both. But when it comes to investing, I usually tell people that unless you want to do it professionally as a career or you want to take it on as a serious, serious hobby to the point where you’re basically semi professional.
You should not be swinging large amounts of your money in the market on your own Now, that doesn’t mean you shouldn’t be investing smaller amounts of money in different accounts because, I mean, you gotta learn right, and maybe you like it. Maybe it’s a side thing that you want to spend an hour or so on a week. That is fine. I’m saying, Don’t take your retirement savings and start throwing it here and there and this stock that stock.
That’s just crazy. Unless you really want to take that dive and truly understand markets like a professional would. It’s just like the medical field. You would trust a doctor to perform surgery on someone, right? But you wouldn’t trust just anyone to do surgery. And serious investing is the same way you can get very complicated, so it helps when you have a professional. Now, those basics about finance that you need to know, regardless of what you decide to do, we’ll be going over that every week in new finance video. Thanks for watching.
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