March 6, 2014

paul

You Might Not Want To Think About This
Guest post by Aysha Griffin

Does it matter who you trust… with your money or anything else?. It seems that trust is something you’re supposed to simply know and do. You shouldn’t have to think about it, learn about it or examine it, right? Or at least not until it is “betrayed.”

Recently, Paul wrote a MarketWatch article that received the lowest number of “opens” or responses by far compared to his many other articles. It was titled “Who Should Retirement Investors Trust?” Given aversion to thinking about trust, I’m not expecting you to read this. But if you do, I hope you’ll invest some thought in questions relating to trust.

Given that all our decisions are based on trust – whether in ourselves, other people, a thing, an institution or a system – it boggles the mind that trust is such an unpopular topic. But, in fact, Trust is complex. It blends knowledge and intuition, and involves risk, faith, and personal desires balanced against the desires of others.

In a new book “The Truth About Trust”, (reviewed here), author David DeSteno, Ph.D. enlisted the help of a wide range of social and behavioral psychologists and economists to examine “how trust influences our lives, our success, and our interactions with those around us. Whether we realize it or not, issues of trust permeate our days from the time we’re born to the time we die, and it’s often what’s below the surface of consciousness that can have the greatest influence on a life well lived.”

If we accept that trust is a core factor in human relationships and the quality of our lives, why are we so reluctant to consider it? Before Paul wrote “Get Smart or Get Screwed: How To Select The Best and Get The Most From Your Financial Advisor,” I tried to discourage him based on my experience that writing about a subject that people don’t want to have to think about does not make a popular book. This is because trust is often presumed and, moreover, wished for. In other words, ignorance is bliss… until it isn’t.

In addition to a 30-year career in communications and marketing, I have been co-owner of remodeling company and owner/qualifying broker of a real estate agency. In both cases, I wrote and published small books to give clients insight into those businesses so they might make informed decisions. Just as with Paul’s “Get Smart or Get Screwed,” very few people read them… they just wanted to trust that this or that “professional” would be worthy of their trust. They just wanted to believe – without basis, reason, proof or having to “do their homework” – that they had made the right choice.

If their trust proves misplaced, most people feel angry and betrayed. But, how much did they know about what was possible, what to expect, or the caliber and past performance of the person or business? Usually, very little. Why will many people spend hours researching the best new Smartphone or appliance purchase but not learn everything they can about the biggest financial decisions of their life?

Maybe we just assume we’re going to be cheated? Maybe we are scared that if we educate ourselves, and then trust the wrong person, we will feel stupid and with no one else to blame? Maybe we don’t want to examine if our own expectations are reasonable? Whatever the reasons, they are misguided and can be costly and devastating.

While salespeople of real estate, cars and other tangibles may prove incompetent or even dishonest, there is often legal recourse and the extent of their damage is usually not as profound as a lifetime of trusting the management of your money to an individual or entity not acting in your best interest. Although polls show stockbrokers are among the top most distrusted professions, investors continue to entrust their life savings to them without question.

According to David Richo’s “The Five Things We Cannot Change: And the Happiness We Find by Embracing Them,”

no one is capable of always being loyal and loving. You will make mistakes. You will disappoint and be disappointed. You will misplace your trust. But why not at least arm yourself with all the information and empirical evidence you can to make the best decisions at the time?

While “gut feeling” or intuition play an important role in trust, conscious rational assessment and analysis must form the basis of trusting ourselves – i.e., being empowered with knowledge – before we can trust another. Can you truly trust your broker/financial advisor? Are you willing to consider who you trust? And if not, why not?

For your free copy of Paul’s “Get Smart or Get Screwed,” go to http://www.PaulMerriman.com

A freelance business coach, marketing strategist, writer, publisher and workshop facilitator, Aysha Griffin is Marketing and Communications Director for The Merriman Financial Education Foundation. She can be reached via her website and blogsite

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Who should retirement investors trust?
One of the most important decisions any investor makes is where to place his or her trust. This topic was the focus of a whole chapter in my 2011 book, Financial Fitness Forever.
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