This is not just a provocation … I think it’s true.
It may not be true in some technical professions: think of a doctor or an accountant … you pay for advice and you expect it to be good (after all, she’s got a PHD right?).
Even then, how do you know it’s good advice?
After all, in most cases, you’re hardly expert enough to judge 😉
Should you be worried?
Not unduly. After all, those articles about the accountant who diddled his clients books is something that you only ever read about. It never happens to you. Right?
What about the guy in the picture to the left? Would you go to him for advice on a healthy lifestyle?
The picture is of a statue, but it bears an uncanny resemblance to a doctor-friend of mine, whose picture I can’t show for obvious reasons; he’s actually a top vascular physician and surgeon.
So, best case, quality of advice is difficult to determine.
But, it’s downright impossible to pay for good, personalized financial (or business) advice!
A simple example: if you want to grow a successful business, can you pay a consultant to tell you how?
Of course not! If they knew the ‘secret’ to building a truly successful business, they would be busy doing it for themselves.
The best you’ll get is some clown offering cheap advice 😉
Let’s try personal finance: people ask me how to select a good financial advisor:
The first thing that I ask them is how much money they want (and, by when)?
The answer is usually $7m7y (or, some other large Number / soon Date).
The next thing that I ask is how much of their own money their chosen advisor has made following the same recommendations that he is giving to them?!
I made $7million in 7 years, but it’s impossible for you to pay me for advice; I give it away … because I want to.
Still not sure?
OK, let’s say you want to invest in stocks.
Who do you want to pay for advice: (a) somebody who’s read about investing in stocks, or (b) somebody who’s made a lot of money investing in stocks?
If (b), why are they taking paltry fees from you?
Oh I see … they aren’t just taking fees from you, they have a managed fund. They’re not really taking money for advice, rather earning a fee for running the business of managing a huge bucket of money (including your tiny drop).
Even so, let me ask you another question:
Who do you want to pay to manage your money: (a) somebody who’s made a lot of money investing in stocks?, or (b) somebody who’s made the most money investing in stocks?
If (b), then who’s made the most money investing in stocks?
Obviously, it’s Warren Buffett (with George Soros a good second … but, if you said John Bogle you fail because he made money through his business of selling his low cost index funds to the masses, not from investing his own money in them).
So, if you want to invest in stocks, you can’t buy the right advice, because nobody’s selling … and, if you want to invest in some kind of fund you can’t pay for the best advice available …
… but, you can tap into that advice for ‘free’ just by buying Berkshire Hathaway stocks.
If I wasn’t going to manage my own money – listening to plenty of ‘advice’ but, ultimately taking my own counsel – that’s what I would do!
I disagree… You should always surround yourself with people smarter than yourself. And often times that means paying for it.
Sure, there are lots of consultants and advisors in the world that are CRAP, but –
1. You charge for the 7m7y system. Is that not good advice that I am paying for?
2. I recently paid $200 for a Retail Consultant to talk through my business plan. They were incredibly helpful in narrowing our niche & focus, and I fully expect that to pay off by a magnitude of X 100’s when we open.
Sort of like asking the question, if someone is making 238%/yr on penny stocks why do they give a shit if you buy their $19.95/month newsletter
@ Chris – If you want a small business, go to a business advisor with a large business and do everything he says 😉
As I said in the post, it’s fine to ask for technical advice (business plan format and line item details, tax, accounting, legals, medical, etc.) but most (I really want to say ALL but everybody’s opinion is at least worth listening to) commercial advice should come free – I have mentors, NONE of them need my money.
BTW: 7m7y is a product … not personal/commercial advice.
@ Evan – Exactly! You can make a lot of money from newsletters …. but, it’s very, very hard [read: nigh on impossible] to make 238%/yr on penny stocks 😉
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