05.30Skinny Models And Skinny Money…
“Mrs. Robinson, you’re trying to seduce me. Aren’t you?” The Graduate, 1967
Major consumer product retailers (one in particular), make-up and perfume makers, and every other advertiser to one extent or another, employs skinny models to sell their products. I was watching one of those ads on TV yesterday evening and it dawned on me that most advertising for financial services and products employ skinny money to seduce you into buying what they have to sell.
I’ve made the point before that whenever you buy something that’s called an investment - stocks, bonds, mutual funds, real estate, annuities, gold, Euros - the company that sells it to you keeps some of your money to cover their costs and pay their sales force. Nothing wrong with that unless you allow yourself to be seduced into thinking that what you buy can make you rich.
Wealth is the result of saved money. Investements are skinny money; they offer no guarantees, can disappear in a flash (Enron, MCI, 1929, 2001,etc.), are not under your control and, if investments are all you have when it’s money you need, your losses could easily lead to starvation.
America has been led - or misled - to believe that investing from income is wise and proper. American’’s are encouraged by mindless pundits that call themselves financial gurus to invest lots of money into their 401(k)s. IRAs or equivalents. These unwise advisors don’t tell them that the money they are stashing is nothing more than a loan from the IRS that will be collected when they retire.
Several popular - not necessarily bright - TV and radio talking heads tell Americans to be sure to have an emergency fund of 3 to 6 months expenses. They don’t tell them that many - if not most - who experience one of life’s surprisingly unsurprising surprises like job loss, disability, medical emergencies, family crises and so on, need enough ready cash to support themselves for 3 to 5 years.
Skinny money like skinny models may be seductive to some, but for me and my clients it’s foolish and downright scary to face the future with debt, unsesured income, limited liquidity and no assured legacy. It’s a heck of a lot better to face the future with the confidence that comes with control of the money in your life than to look back with regret because you relied on information from TV pundits and the advertising of the Behemoths to build your personal economy.
Remember, like Mrs. Robinson, they are trying to seduce you. Avoid the seduction and the pain that it leads to and build a solid foundation and framework for your personal economy BEFORE embarking on an investment program. Discover how –> www.TheMoneyForLifeBook.com
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