Four Really Bad Questions to ask a Financial Expert – Part II

By Boyce D. Watkins

Business Editor

Aug. 17, 2007, 6:20 p.m. - The first of this two-part series featured some of the bad financial questions I am sometimes asked as a Finance Professor. Not that I would ever make fun of anyone, but I am sure some people might appreciate the fact that I am sparing them the misery of receiving a frustrating, meaningless answer to a question asking me to do the impossible.

I am a financial doctor, yes. But I’ve studied money long enough to know how valuable it is, how valuable it is not, and what it can and can’t do in your life. So, I am going to give you the heads up and save you some embarrassment by giving you the last two of the four really bad questions to ask a financial expert. This is not about dissing anyone, it’s about helping us understand where we want to be.

Let’s review questions 1 and 2 from last week and then we will discuss the answers to questions 3 and 4 afterward. To get the answers to the first two questions, please go back and read part 1.

Bad Question #1: What’s a good company’s stock for me to purchase?
Short Answer: It’s not about the quality of the company, it’s about how the purchase price compares to the actual value (think of it like buying a cheap outfit at the mall….good clothes does not mean you got a good deal).

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Bad Question #2: Dr. Watkins, can you predict the stock market?
Quick Answer #2: No, most people can’t. At least not in the short-term. Anyone who says they can do so reliably is probably lying to you, whether they know it or not.

Bad Question #3: Can you help me make some fast money?

I hate to be the one to tell you this, but most money is not fast money. Sure there are cases in which people make money overnight, but you never wanted to be a porn star anyway. Just kidding. The fact is that you can compare earning money to winning a Super Bowl: greatness in football comes from a long period of grinding it out, one play after another, one inch after another, until you finally arrive dirty and even bloody in the end zone. A steady stream of smart financial choices, cautiously intelligent behavior and focusing on your financial goals is the way to become wealthy. You can also throw in the desire and ability to make investments when necessary, even taking calculated risks. A series of choices is what usually makes you wealthy, not one big move.

Bad Question #4: What is the secret to getting rich?

This is not necessarily a horrifically bad question. It’s only a bad question if you truly think that getting rich has a secret formula. There is a formula or two, but they are usually not secret. In a couple of nutshells, I can give you the formulas for getting rich:

Save your money so that your money can save you. When you save, put it in a place that will allow it to grow, like a stock portfolio or investment account. Don’t put it under your mattress or in your savings.
Own something – a house, a business, anything that’s yours. You’ll never get rich simply working for someone else, unless you’re in the NBA….for a really long time.
Do things that will increase your earning potential. Choose a career with growth opportunities, or find a way to channel your abilities into a business of your own. There is also nothing wrong with having a “side hustle” or two that will allow you to make extra money.
Make the right life decisions. Find a partner who will increase your chances of having a wealthy life (not just a wealthy bank account). A partner with bad financial habits can destroy your financial future. He/she can also become dead weight both financially and emotionally.

The bottom line in all this is that when it comes to money, you probably know the answers to your own questions. Don’t feel that a Finance Professor or anyone else can offer you a golden ticket. At best, we can help you fulfill the destiny you’ve already chosen for yourself. That’s all I’m here to do.

(Dr. Boyce Watkins is a finance professor at Syracuse University. He makes regular appearances in national media, including CNN, FOX and BET. He is also the author of Financial Lovemaking 101: Merging assets with your partner in ways that feel good. His column is published here every Friday exclusively on Redding News Review. You can reach Dr. Watkins by going to www.boycewatkins.com).

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