WHY DO SOME MONEY MARKETERS INSULT YOU?

“If I made (only) $400 grand a year, I would be embarrassed with myself as a husband, a father, basically as a human being,”

–Grant Cardone

MARKETING FOR REACTION

For the record, I don’t feel embarrassed.

But there is no denying that Grant Cardone is wealthy and successful, and his opinion carries weight. He writes books about wealth creation, manages real estate crowdfunding investments, and has several other businesses.

And as you have gathered, also he has a unique marketing approach to draw customers in: he criticizes 98 percent of the population for their salaries. And, if you are only a single-digit millionaire, he feels you are strictly middle class.

So, if you make less than $400,000 annually, consider yourself put in your place.

We will look at that point of view in this post and discuss a few other marketing pitches as well. And we will see when you should pay attention to some strident marketing appeals and when to ignore them. We will also go through the steps needed when you decide to make the leap from someone who solely gets financial information to a direct investor.

FINANCIAL INDEPENDENCE AND MARKETING

Cardone’s approach to marketing is not unique. The internet is filled with advice and opinions designed to grab your attention and emphasize exclusivity.

Here are a few other examples. Suze Orman said once that people should have at least $5 million to retire—a circumstance that generated outrage in some quarters. Dave Ramsey advocates for incurring NO debt—something very difficult to do–and advocates this approach even when debt might be justified. 

Remember that many advisors who use extreme marketing approaches may have simply learned through hard experience. Or, their advice may be aimed at overcompensating for common financial mistakes made by many in the public. To put a generous spin on it, some marketers belittle others because it motivates talented but underperforming people to try harder.

Of course, it could be they just want attention.

SOME FINANCIAL MARKETING APPROACHES

There are yet others who use different marketing techniques for entirely different purposes. But the theme of getting attention is the same.

You see this often, especially if you are looking for quick profits. Here are a few examples:

•           The sky is falling—they warn you that a market drop of cataclysmic proportions is coming soon. But if you heed their advice, you can avoid disaster and make a big profit.

•             Some of your peers are WAY ahead of you—you see profiles of very young people who work a few hours a week and are making massive fortunes. They have classes you pay for that explain how to duplicate their success. Of course, when you delve into it, you usually find that the creator had to finally put incredible amounts of past work in to achieve their current success.

•             You are missing out because of ignorance—a megatrend in the financial markets will result in millions for those who know about it. These folks claim that you can learn about it and profit if you pay.

•             There is a key factor in wealth creation you are missing—if you buy the marketer’s product, they will tell you what ingredient is holding you back and keeping you from achieving your true financial potential.

•             You can write your own rags-to-riches story—usually, the marketer will tell you about their own stories of the pain they have gone through and contrast them with the life they live today. You pay for their road map to success and learn how to duplicate what they do.

Now, consider that honest marketers may also be behind many of these pitches; these are not always scams. And some marketers may have done phenomenally well and want you to do well too, not fleece you. They just want to be paid for their expertise.

If that is the case, fair enough.

So, if you are convinced that a pitch is legitimate, how should you proceed if you are interested or if a particular sponsor has piqued your interest? How do you know if the hype will lead to a good result?

JUDGE PERFORMANCE, NOT MARKETING 

Any approach that inspires you to improve your finances is good. But should you always proceed directly to the investment stage with those who provide your inspiration? Not always. You have to do your homework first.

There is a stark difference between whether you like the style of a creator’s book, blog, or radio show and their competence as an advisor. Or, if they have you go to an affiliate, that person’s competence.

Determining the worth of management advisors and investors is your responsibility. And understand, I am not questioning the ethics, morals, or results of ANYONE mentioned in this article. But, YOU have to put in the work to divide the impressions of any firm that works for you from what their performance is. Performance is all that counts. Caveat emptor.

BECOME A JUDGE AND NOT A FAN

Impressions and actual competence or results are not the same things. For instance, most Americans tend to like and trust financial advisors with beards. There is no objective evidence that is a good way to gauge anyone’s actual competence.

So, when investing or purchasing ongoing services, be a judge, not a fan. In other words, ask questions like:

• How much does this cost? How much does it cost over time?
• How much of my time will this take?
• Do you have current customers I can talk to about your performance?
• What has the track record/your track record been? Has anyone independently confirmed your claims? How do you compare with your peers?
• How good is your customer service? Do you regularly check in with clients? How?
• What are the most significant risks and catalysts of the actions you recommend? If you were me, what would you be most worried about?
• Are you or your recommended advisors fiduciaries?
• How are your recommendations tailored to my needs and goals? How do you make sure that happens?

TAKE A HARD LOOK AT WHAT YOU NEED, NOT WHAT SOMEONE ELSE THINKS YOU SHOULD HAVE

You have to know what you need and want.

For instance, salary is a one-size-fits-all way of measuring financial success, but not necessarily an accurate one.

In my case, I am more interested in keeping my debts zero and my expenses manageable. I want to grow my net worth over time safely.

So, for a more comprehensive view, have a competent fiduciary look over your finances and devise a plan that is appropriate for your circumstances. Pay them by the hour. You will find that your age, income, goals, savings, expenses, and other factors help determine your best course of action.

Some banking institutions, like credit unions, offer that service for free or for a reasonable cost to members.

AND ABOUT A FIDUCIARY–MY EXPERIENCE

I am writing about this subject because it affected me recently. And no, it was not connected to anyone or any firm mentioned in this post.

Instead, a trusted accounting advisor recommended a firm to handle someone in our extended family’s financial accounts.

The firm he recommended is very solid. Their marketing pitch was reassuring. They have an excellent reputation and are renowned for personal service. On the surface, they were a good choice, if a bit pricey.

However, after a little research, it turns out they are not fiduciaries on certain transactions. Fiduciaries must always act in a client’s best interest. They cannot engage in a conflict of interest.

So, despite my positive impressions of the firm, we decided not to use them. I need anyone we hire to always work in my extended family’s best interest.

SUMMARY

It is one thing to have success through successful marketing of financial strategies. Competence in investing and managing any financial advisors is another. As a potential customer, make sure you know the difference. You must do your homework and know what you need to keep your finances solid. There is no substitute.

Disclaimer: consult with a financial fiduciary before taking any steps outlined here. Not all advice may be suitable for your circumstances or investment style.

Image: Patrick Fore

License: Unsplash