Al Jacobs has been a professional investor for nearly four decades with expertise in areas that include real estate, mortgage, securities investment and the operation of a private trust company.
Signs That Show You Know How to Handle Money
The ability to master your money is not something that just happens. It
takes time, training, and temperament. Whatever praise or criticism you
may direct at the American public school system, one thing must be acknowledged:
The handling of personal financial affairs is not a subject to which much
attention is devoted. Whatever the average citizen knows about saving and
investing did not come from the classroom. This is understandable, of course,
if only because the typical classroom teacher is equally mystified by the
world of money. Nonetheless, there are those among us who have figured out
how it all works, and what it takes to prosper.
Are you one of those
persons that has managed somehow to get the hang of it? If you recognize
yourself in most of the twenty-five following scenarios, then you can
confidently answer "yes" to that question.
1. Your credit card
bill is paid in full each month with never a penny in interest incurred.
2. You understand
that the variable annuity in which your neighbor just invested will prove
to be a sad mistake.
3. Despite orchestrated
furor by the media, you recognize that the $30 it costs to fill your vehicle’s
gas tank is cheaper in today’s dollar that the $15 it cost 20 years
4. You enjoy financial
talk shows for their entertainment value while knowing that 95% of what’s
said is nonsense.
5. The only type of
life insurance that you’d ever consider purchasing is a term policy.
6. You’re not
tempted to invest in something because of a hot tip you get from a friend
7. You have serious
doubts that the 3-unit course in basic English composition offered at
Eleganté University for $900 is any better than a similar course
conducted at Midtown Community College for $60.
8. You are sufficiently
sophisticated in real estate to know that the worst house in the best
neighborhood beats the best house in the worst neighborhood.
9. You owe nothing
on the vehicle you drive.
10. You have a pretty
good idea by mid-November how much your income tax obligation for the
current year will be.
11. When hearing that
the S&P 500 Index just hit an all-time high, you are not inclined
to call your broker with a buy order.
12. It’s beyond
your comprehension why anyone not certifiably insane would purchase a
13. Your checking
account balance never drops below the minimum limit that triggers a monthly
14. You’re aware
that an option to pay your auto insurance premium in two installments,
with a "modest convenience fee" instead of a single payment,
probably works out as a loan at about a 25% interest rate.
15. Although you thoroughly
enjoy the home in which you live, it’s considerably less expensive
than you can afford.
16. You know practically
nothing about the option market—and intend to keep it that way.
17. You feel instinctively
that every dollar you contribute in FICA taxes to the Social Security
system is a dollar lost to you forever.
18. Whenever you’re
negotiating a purchase and qualify to receive a discount, you do not hesitate
to ask for it.
19. You entertain
no illusions that a financial advisor will provide sound counsel merely
because of the Certified Financial Planner (CFP) designation held.
20. You make the maximum
possible contribution to your retirement funds.
21. Whether your choice
of wristwatch is a top-of-the-line Rolex, a fashionable Cartier, a respectable
Bulova, or an economy Timex, you recognize that all are battery-operated,
with a similar quartz movement, and none fail to keep excellent time.
22. You find it baffling why anyone would buy a lottery ticket.
23. You cannot remember when you last borrowed money for an unexpected
24. The newspaper advertisement offering a half-pound silver commemorative
medallion from The Perfidious Mint, at the "special advance price of only
139 dollars," forces you to suppress a laugh.
25. You have no confidence in the concept of "Investor Confidence."
If the sentiments expressed in most of those situations do not reflect
your thinking, you’re not in control of your financial destiny. In that
case, you can use a little guidance. A visit to the Newsletter Archives
on my website at www.onthemoneytrail.com might be a good place to start.
Jacobs has been a professional investor for nearly four decades. His
business experience ranges from real estate, mortgage, and securities investment
to appraisal, civil engineering, and the operation of a private trust company.
In addition to managing his investments on a day-to-day basis, he is a featured
financial columnist for both online and print publications. He is the author
of Nobody’s Fool: A Skeptic’s Guide to Prosperity. You’re
invited to subscribe to his financial Newsletter, "On the Money Trail,"
at no cost or obligation, by visiting On
the Money Trail
Ed note: While I do not know Mr Al Jacobs, I could not help but chuckle at how close his mindset is to my own, except of course, for the 10% of my portfolio invested in penny stocks. (Sir John Templeton began his fortune investing in penny stocks)