The Reluctant Investor (and how to avoid becoming him)

The Reluctant Investor (and how to avoid becoming him)


In 1977, a poem was written by Donald M. Weill. Called “The Reluctant Investor’s Lament” the poem was ahead of its time, and stands as one of Jason Hartman’s favorites. For your convenience, we present an abridged version:

I hesitate to make a list
Of all the countless deals I’ve missed;
Bonanzas that were in my grip –
I watched them through my fingers slip;
The windfalls which I should have bought
were lost because I over-thought;
I thought of this, I thought of that,
I could have sworn I smelled a rat,
And while I thought things over twice,
Another grabbed them at the price,
It seemed I always hesitate,
Then make my mind up much too late,
Avery cautious man am I

And that is why I never buy.

When tracts rose high on
Sixth and Third,
The prices asked I felt absurd;
Whole block-fronts bleak and black with soot-
Were priced at thirty bucks a foot!
I wouldn’t even make a bid,
But others did — yes, others did!
When Tucson was cheap desert land,
I could have had a hip of sand;
When Phoenix was the place to buy,
I thought the climate much too dry!
“Invest in Dallas-That’s the spot!”
My sixth sense warned me I should not,
A very prudent man am I

And that is why I never buy.

A corner here, then acres there,
Compounding values year by year,
I chose to think and as I thought,
They bought the deals I should have bought.
The Golden chances I had then
Are lost and will not come again,
Today I can not be enticed
For everything’s so overpriced.
The deals of yesteryear are dead;
The market’s soft — so’s my head!

Last night I had a fearful dream,
I know I wakened with a scream;
Some Indians approached my bed —
For trinkets on the barrelhead,
(In dollar bills worth twenty-four,
And nothing less and nothing more),
They’d sell Manhattan Isle to me,
The most I’d go was twenty-three.
The redman scowled: “Not on a bet!”
And sold to Peter Minuit.

At times a teardrop drowns my eye
For deals I had, but did not buy;
And now life’s saddest words I pen
“If only I’d invested then!”

The poem, which reads relatively contemporary, was written 37 years ago. Weill offers his regrets as a lesson for us—do not be the reluctant investor.

But it is perhaps easier said than done. Following a path of wealth that comes complete with no financial regret can be difficult. But with the right education, attitude, and tools, you begin to establish a financial future that is safe, secure, and fun.

By minimizing risk and maximize return, you’re going to be living the luxurious life you always dreamed of. Put irresponsible government on your side and invest today.

And if you’re still worried about bad investments, they’re easier than you think to avoid.

Avoid bad investments with these rules

Jason Hartman’s team knows that nobody goes out looking for bad investments. Unfortunately, it still happens more than we’d like. It’s easy to get caught up in the allure of those “too good to be true” investments and bite anyway—but follow a few simple rules and keep building your wealth without hassle.

Don’t invest if there are extra charges

While this might be a little bit of a red flag in the beginning, folks are good at convincing you that these fees are really nothing to worry about. But investments with surrender charges (like broker sold annuities and shared mutual funds) limit your ability to be flexible.

If you experience a major life event, you may have get out of or separate your investment. In the case of divorce, you’ll either have to pay to get out or stay involved with each other in some capacity, thanks to your shared investment. It isn’t a great situation.

Or suppose you move or experience poor health and need access to your money in a timely fashion? You certainly don’t want to lose money because you’ve got to sever ties before the investment has deemed it appropriate to do so.

Don’t invest all of your money in one thing

While investments that are not liquid can pay a higher rate of return, they’re more difficult to cash out should you need to. Real estate is a great investment that will bring a lot of long term wealth, but it will be more difficult to cash in. Try some other forms of investment if you’ve got the money (but be aware that many are a bit of a gamble).

Similarly, don’t invest only in one geographical area. In the housing market in particular, this is important in avoiding bad investments. The housing market does different things at different times in different areas, so you are wise to diversify.

Watch out for commissions

Doesn’t the word commission just make your skin crawl a little bit anyway? We totally agree—which is why they should be given some thought if you’re looking to avoid bad investments. Be particularly wary when you’ve got to pay a commission up front. When you’re paying upfront, your investment advisor has very little incentive to continue to provide you with good service.

Of course, there are always exceptions. Paying a commission on a real estate transaction isn’t a bad deal, because your realtor has absolutely no obligation to provide any ongoing service to you or your property. A commission beforehand then makes sense.

Stick to what you know (or can know)

It’s rarely a good idea to invest your money in something you don’t really understand. Luckily, we live in a time of easily accessible information and so you’ll be able to learn anything you set your mind to. Educating yourself is the best way to keep from making a decision that doesn’t make sense or is otherwise illogical.

Good investment advisors will always allow you to ask questions and will provide you with enough knowledge to make your decision. If they don’t, it might be time to walk away from the investment and that advisor.

(photo credit: Old Shoe Woman via photopin cc)

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Why is Financial Literacy Important for Families? 

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The Young Wealth Team