Tuesday, November 2, 1999

The Vegas Investment Path


The roundabout way that I came to The Motley Fool all started in Las Vegas in the summer of 1998. While driving cross-country, I decided to check out the Mecca of gamblers. I walked the strip, did some people watching, and lost a few dollars at the casinos. OK... it was a little more than $100. All right... it was a little more than $200. Repeat after me -- never take your ATM card to a casino, never take your ATM card to a casino.

After I cut my losses, I ended up just sitting at a buffet, watching people play slot machines, and I saw a disturbing trend. Many of these people were in their retirement years, and they were cashing in their social security checks for slot tokens. Each one was waiting for the next big jackpot that they could live off of. I decided then and there that I never wanted to be in that position.

After Vegas I wanted to get into investing right away, and this led me to my next financial blunder -- my personal financial advisor. He gave me glossy brochures about his past successes with clients, and he agreed to invest my money for me. His expert management would only cost me 3% of my principal a year. OK, I was a little ignorant, but the guy had a gold Rolex! I figured he must have known how to make money! I was proud of the new responsibility I had taken over my finances by paying this guy. Everything seemed to be going well until I discovered The Motley Fool.

After reading a few of the Fool's books and spending some time on the website, I began to have a slightly different view of my financial planner. After one year, he had underperformed the S&P 500 by seven percentage points. Plus, I had a lot of capital gains taxes due to the 70% annual turnover in my stocks. When I called to confront him about his sub-par performance, he responded, "The S&P 500? You're using some pretty big words there, guy." Not the kind of informed response you want to get from your investment professional.

I'm now in control of my financial decisions. I transferred all of my stock into a discount brokerage and I'm reading up on different companies on the Fool. Will I do well in the market? Will I bomb? These are questions I cannot answer yet. But unlike my experiences with Vegas and a financial planner, I am not rushing into anything this time. I am educating myself so I can make informed decisions. My experience has taught me that, in regard to my finances, the more I know, the better off I am.

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