[update & extension of my previous post – a link to a website article, precisely the way I think about this issue of FINANCIAL ADVICE: http://recessionista.com/work/3-typical-pieces-of-financial-expert-advice-debunked/?utm_source=taboola ]
“Stay away from Financial Advisers, do your own research, use your own experience, learn from your own experiences, and be careful with where you put your heard-earned money”. Two ways of loosing money in a Bank: (1) The Bank gets broke and has not enough capital to pay out all of its customers (remember world-wide banking crisis, or entire governments fail), once the big run for it starts. (2) You buy an investment and receive a little bit of interest. And it adds to your overall income and bumps you up into a higher tax rate, and erodes due to inflation. Meaning, money just sits there and does nothing for yourself.
Here in Canada we have another type of instrument – that is the Tax Free Savings Account TFSA. Depending on your Bank, the interest rates paid to you are typically low. If many are taking advantage of this TFSA, then the Government has some money to work with. In fact, it helps the Government more than it helps you because the interest paid is negligible. Other investments are usually more subject to losses, such as Mutual Funds, Trust Funds. Or, be careful, buying any IPO’s – Initial Public Offerings. Wait a little until their value drops.
I did my homework. Had some money in one of those Mutual Funds, a big fund, which in fact is a ‘Fund of Funds’. Dangerous stuff, because one cannot easily find out what type of companies, sectors or financial institutions this fund invests in. I spent one day to get to the bottom of it and found: Several obscure banks – of unknown origin and country – that did not even exist. Now I knew why I lost so much in this FUND OF FUNDS (which by the way had been solicited). Got rid of all my mutual funds. Mutual Funds (like Condominium ownership) work on the principle: We are all in the same boat, the boat goes down, everybody in it does. And my advice to investment advisers: Try not to sell mutual funds to clients who are into their 70s, because those funds are for the long haul.