What do I think about Financial Advisors/Planners/Brokers, mutual funds, portfolio managers, etc?
My primary source of income is my engineering career and as everybody else, I work hard to earn it. So why not work hard to use my hard earned money to invest it the way I want, the way I like, and not get biased by somebody else. I know what is important to me and what has relevance to me. I fail to understand how can an outside advisor tell me what is good for me. The whole investment industry works on fees and commissions, and hence the likelihood of swaying away from your own investment goals is very high. Additionally, the historic data seems to suggest that majority of the mutual funds (or portfolio managers) are not able to beat the general market indexes. So why should I pay fees, commissions, loads, etc. for this under performance. Why I shouldn’t just buy the low cost index fund? I read an article sometime back (forget to bookmark it) that one investor had significant reduction in value of its mutual fund holdings, but had to pay short term capital gains tax. While devil is in the details, but I thought that was little contradictory to me. To me, if one charges a fee for the service, I expect some level of quality behind that service. Perhaps financial advisory/planning/brokerage is the only industry, which does not stand behind its product (or service). Would you buy anything when the service provider or seller tells you upfront, that he cannot stand by it or held accountable because of such and such risks? Sorry, I don’t buy such products.
My investment philosophy?
Have a goal, decide a strategy, measure the progress, and be open to adaptation. There is no such thing as “right” or “wrong”. Right or wrong depends on the context and its relativeness. Even a clock that has stopped ticking is right twice a day. So, if it meets the goal or facilitates achieving it, then it is right. Keep it as simple as possible.
Why I am here?
Use this blog as a platform to discuss, present, and share experiences that works (or not work) for me. I will also use this blog to track my efforts in increasing my passive cash flow. For me, the passive cash flow here is defined as cash flow other than my primary source of income. The approach I have adopted is using passive income stream.