One of the most important ideas to keep in mind as a first responder hoping for a comfortable retirement, is that you should maintain direct control over your investments. It might be hard to do this if you’re obsessed with investing in the stock market because those brokerage firms are experts at inserting their hand between your investment profits and bank account, primarily with transaction commissions and administrative fees.
We can think of three solid reasons for a first responder to maintain direct control of his investments. Want to know what they are? Thought you’d never ask.
Your broker might be a crook: With the monstrous piles of money flying up and down Wall Street on a daily basis, there will always be a certain percentage of criminal-minded people motivated by greed who don’t mind trampling a few laws to scam their clients. Bernie Madoff and Enron to name two recent examples. It’s easy to spot these scoundrels, right? Sure. After they’ve stolen your money and spent it. Prior to getting busted, they were pillars of the community. The truth is you can’t spot crooks up front and neither can we.
Your broker might be incompetent: Incompetent brokers and advisers, though perhaps lacking the evil intentions of the crooks, can do just as much damage to your portfolio. A fancy office and three piece suit does not make automatically mean competency. Once again, you may not even realize the damage being done until it’s too late.
Administrative Fees and Commissions: You may think paying these are simply the costs of investing. Nothing could be further from the truth. Wall Street brokers want you to think it’s all entirely normal while they re-direct more and more of your annual profit into their account. Transaction and administrative fees are not a normal cost of doing business when you’re in direct control.
So the $20,000 question is how do you, as a first responder, acquire direct control of your investments? We’ve said it before and will do so again – income property. Go get some!
The Heroic Investing Team
Flickr / bixentro
Tags: first responder