Did you ever stop to think how many people make a living from ’advising’ others? Take your car into a dealership, and the service manager will advise you how to get it fixed. Go to a doctor to get advised, or to a health food store for advice. Weight losers are subject to untold advice, as are gym and exercise aficionados. Photo stores will advise you as to which film or camera to buy, and the plant store will advise on what to buy and plant. Advice is plentiful, whether it’s from a marriage counselor, psychiatrist, psychologist, or roofer.
Those who give all this advice, usually do it for either a price, or to steer you to a profitable investment. Take the guy in the auto dealership, who works for a salary. He gets a commission if he can convince you to do something extra, or convince you that something additional is needed. Not in every case, but I know of plenty who do. Dentists love to charge for, and find extra things wrong in your mouth. How are you to know whether it is accurate or not? Are you a dentist or doctor? No. Are you a mechanic? No. Do you know one roof from another? Probably not. Advice can be helpful, or it can be very profitable for the one giving it, or the company the advisor works for.
Money managers charge a certain percentage of the money they manage. Millions willingly pay the fees, because they have been convinced that they are too stupid to do it themselves. Mutual funds by the literal thousands, take dollars, and invest them in various stocks, which the managers feel they are smart enough to invest in for the fund holders. There are advisors by the millions. Literally. In the Salt Lake City yellow pages, there are 137, but many of these are firms with lots of advisors or “financial planners,” as they officially call themselves. There are degrees and certificates, which certify you as an official, licensed, “financial planner.” Does Salt Lake City have several hundred “financial planners,” who are certified and licensed? Probably.
Guess what? All these licensed, certified, educated, official, “financial planners,” do only one thing. They advise you, and manage your dollars into thousands of stocks, bonds, and other paraphernalia, WHICH ARE ALL DENOMINATED IN DOLLARS.
“Let me advise you Mrs. Smith. If you buy a thousand shares of Joe Blow, and invest $20,000 in Suzy Smith’s bonds, and you should get a nice 8% return every year. I’ll charge you a commission for buying the bonds and stocks and a commission each year for the money of yours that I manage.” This type of nonsense goes on a million times a day. This goof ball, who is “certified and licensed,” is actually de-capitalizing his clients. The dollar is losing value faster than the net increase in dollars to the client. If the dollar goes down 7% a year, which is perhaps correct, or maybe even more, the 8% return is taxable, and the planner’s commission takes care of the rest. Mrs. Smith is losing purchasing power each year, and PAYING FOR IT.
Now, if Mrs. Smith had bought gold four years ago, she would have profited by 75% by now, or 18.75% per year. She wouldn’t have had to pay a fee for “managing her money,” and she would be out of dollars, and into another denomination, which is ounces of gold. If she had bought silver, she would be 90% ahead or 22.5% a year. If Mrs. Smith has placed her $30,000 in a bank savings account four years ago, she would now have $31,218 and the $218 would be taxable. If she had bought gold, she would have $52,500, or with silver, she would have $57,000. How much advice and planning goes awry? A lot of it, believe me! Joe Blow stocks may fall out of bed, or Suzy Smith’s bonds may default. Look people, General Motors stock was $84, four years ago, and now it is struggling to stay above $20. They lost $1.6 billion the first quarter of this year! Wal Mart stock is not much more than half of what it was four years ago, and Ford isn’t any better at about $8. Lots of bonds have failed as well.
Here’s another “guess what.” Gold and silver don’t depend on any CEO or the public’s desire to buy a Cadillac. (Has Cadillac built a really pretty car since 1962? Not in my opinion). Gold and Silver are dependent on no government’s “faith and credit,” nor anyone else’s or corporation’s faith and credit. Gold and silver are not dependent on business profitability, managerial skills, employee union contracts, or the prime rate. As a matter of fact, gold and silver are dependent merely on their supply, and nothing else. If central banks foolishly dump their gold, which is the one thing they have which is true value, it makes gold prices go down, which is a buy time for private people. I know of no government which has any silver at all, and there is probably more gold above ground than silver. Silver , like gold, has been real money for thousands of years, and when all the paper money turns to ashes, gold and silver remain.
All the financial planners, with all their certificates and official recognition, do one thing, and one thing only. It’s all they are permitted to do. It’s all they are taught to do. It’s all they are licensed to do. Know what that is? They take dollars and place them in different dollar instruments. It’s like literally re-arranging the deck chairs on the Titanic. That’s an old expression, but what better description is there? The whole thing’s going down the tubes or under the waves, and the millions of financial planners are re-arranging the dollars as they sink. I can hear it all now, if you forward this to an “investor,” who took the advice of a financial planner, and whose entire surplus assets are not only in dollars, but in the planner’s deals. “Well, that Don Stott is a renegade, and not to be trusted. Why does he make fun of, and deride a professional, who has experience and education? My planner has several degrees in economics, and works for a very well known company. Why does he continue with his diatribes? Please do not send me any more of his writings. He is disgusting.” Signed Susan Smyth-Ardsley.
Well Sue baby, you’ve got a lot to learn, and by sheer experience, I am afraid. I don’t know how old you are Sue, but I am an old geezer, and when I was a kid, I remember prices that would shock you. The Coke’s the same, as are the homes, cars, and dresses, but their respective prices are up by several hundred percent. Now listen Sue, my child, those dresses may be a bit different style wise, and the cars are more sophisticated, but the Coke’s the same. The dollars you placed in the hands of your well suited, financial planner, with all his degrees tacked to the wall of his beautiful office, is an idiot. He thinks that history never repeats itself. He thinks that you just can’t look back at old prices, because ’those were different times.’ This is today, and an 8% return is very nice. Look here Sue, you’ve got to remember that history not only always repeats itself, but throughout history, the majority has usually, if not always been WRONG. Your dollars have failed, and that’s why prices are “up.” Your dollars will continue to fade, just as surely as the sun will set every day. If you don’t get your assets and ass out of dollars, Sue, you will be sorry. You see Sue, when all past currencies failed, and 100% of them have, most never had enough brains to get out of them, and they went down with the ship.
Hundreds of millions of all the nationalities on earth, stayed in their respective currencies, and lived to regret it. All of them went to zero. Are your dollars safe, Sue? For certain they are. You’ll always have more dollars, but they will progressively buy less and less. No more nickel cokes Sue, because the nickel won’t even buy the cup today. The dollars your old man left you in that trust, will go down without your ever touching them. They’ll grow each year in numbers, but not nearly as fast as their ability to buy anything decreases. Too bad Sue. You’ll always place your trust in those degrees and certificates in that posh office, which houses that snob you deal with, rather than actually thinking for yourself. Too bad Sue. Protect yourself, and don’t trust others to do it for you.