I just read this article where a person was giving financial advice and the main topic was how people often focus a lot in cutting back on small items such as gas or a cup of coffee but not the bigger ones such as their house mortgage. One of the other main points was how if you go to a financial adviser most of the time they are simply telling you things that will not necessarily be the best choice as they want you to use their service as long as possible. Then, the last main advice was to invest your money in low risk methods such as mutual funds.
I guess in some ways it is true as with a lot of big purchases like a house most people would simply be happy just to get a mortgage let alone shopping around for the best price. The comment about a financial adviser is kind of interesting though as in my opinion if you want to be that broad in saying that people in that field are telling you answers that will also ensure that they will get a bigger commission cheque you can kind of say that for any field or profession as if no one uses your service then you have no business. I’ve never used one myself, but I would think you would at least learn something that you didn’t know before and then it would be up to you on what you do with your newly acquired knowledge.
Now this low risk investment advice is the one that usually gets me wondering if people feel it is really worth it. For example, there were examples on how if you invest $1000 in a “safe†method that in five years you are guaranteed to make around $500 before adding in fees and all. Even if we pretend that there is no fee and you get a full hundred per year, is leaving your money idle for the whole year really worth just $100? For myself, I would rather take that thousand and find a way to turn it into $1500 the first year. People often say that more risk means more reward as well. In terms of “risky†methods being too much of a gamble, if you know what you are doing with your money then really it is no riskier than say leaving your money in an account and then having the value of it decrease due to things like inflation. At least with the “risky†way you are taking an active role in managing your money.
It mostly just comes down to being knowledgeable about your options I’d say and actually looking at the hard numbers yourself as I think even when it comes to saving money you should still be pro-active with it.