Don't Play the Sucker Bet of Conventional Wisdom

Several years ago, Jason Hartman created the 10 Commandments of Successful Investing, and he saw that it was good. Unfortunately, successful investing in these tumultuous times called for even more commandments. Jason sat down, scratched his head, and came up with a set of rules to follow that expanded upon the first set.

He called them the Next 10 Commandments of Successful Investing. The first of these (#11 if you’re keeping score at home) says: Thou Shalt Not Be a Sucker. This is good general advice but critical when trying to score the best return on investment possible in these topsy-turvy times.

Here’s the basic problem. If you’re being a responsible little soldier, reading the financial papers, watching the cable television shows to try and make sense of the markets, you’ve probably come away with the idea that you need to turn over your cash to some guy or gal in an expensive suit who buys stocks and bonds under the auspices of Merrill Lynch or Ameriprise or Fidelity and open yourself a nice IRA that you max out every year.

Sounds good, right? That’s what everybody does.

You’re going to make us say it, aren’t you? And we’re going to sound just like your mother. If everybody put on a blindfold and ran towards a cliff, would you do it too? The bottom line is this. If 15 years ago you followed the portfolio pie chart slice up offered by the financial industry, dumped your money into an IRA, you’d pretty much be sitting in exactly the same position today when measured in nominal dollars.

Worse, taking inflation into account you’re likely looking at a 40 to 50 percent loss in value. Does this sound like good personal financial management? Not only, no, but hell no! This is the sucker’s bet that Wall Street has been tricking the middle class into making for decades, all the while holding it up as the true path to the American Dream.

Don’t follow the crowd. The crowd is rarely right. The crowd will make you not only a sucker but a poor sucker. Instead, invest your hard-earned money in a strategy that actually works - income property. (Image: Flickr | zoonabar)

The JasonHartman.com Team
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