I was reading a back article from USATODAY (Nov. 5 The Pitch/The Catch) about how some Baby Boomers are losing their retirement money because of questionable advice from financial representatives who seem to be more interested in making big commissions than doing what is best for their clients. It seems that some so-called advisors have been trolling companies with large numbers of near-retirement workers and claiming that they can "guarantee" returns of as much as 15% on investments. The article gives several examples of people who were told they could retire early, put their retirement into the rep's suggested portfolio, and live on the interest for as long as they wanted, never touching the principal. Sadly, reality stepped in and the "unlimited" interest became extremely limited, forcing almost all of the retirees back into the job market - usually at much lower paying jobs than they had retired from.
Well, first of all, if you ever have someone "guarantee" any kind of returns, particularly anything as high as 15%, you need to kick that person out of your home or walk out of the presentation right away. No honest, ethical representative will ever guarantee any return because, for one thing it's unethical and for another you can't predict what the markets will ever do. The most any rep can really do is to give historical examples of how the market or particular funds have done in the past, and use this as an indicator of what could (but might not) do in the future. So why, you might ask, would someone let a stranger talk them into taking an early retirement and putting all their money into a high-risk portfolio? Because most people have no idea what they should do with their retirement money in order to make it last, and because most of these shyster (can I say that here?) "advisors" are very good at convincing people that they want to help them. Sad to say, but the only ones they are interested in helping is themselves.
What do you do then? Well, having had some experience in the financial field (I won't say which company, because that would not be ethical), I can tell you that an ethical, honest advisor will spend a great deal of time finding out what your current and future needs are, what your goals are, and how comfortable you might be with different levels of investment risk. An ethical, honest advisor will NOT spend most of the time telling you how wonderful the investment is, how much you will make at the "guaranteed" rate, or blow off your questions or concerns. You want someone who is committed to doing what's right for you, every time.
Well, that's my rant for now. All of you remember to ask lots of questions of anyone who says he/she wants to invest your money.
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