Saturday, April 15, 2006

The Other Side Of Phinance

One of the pleasures of speculation is the crisp and clean reality of interacting on a level playing field.

Of course there are cheats and inside dealers - but you are aware of their presence and can defend yourself. Remember our primary speculation rule:

No one cares more about your money than you do - unless they plan on stealing your money.

Using that speculation rule as groundwork we can set some guidelines to protect ourselves

  • contact the brokers you have researched - hang up on unsolicited calls
  • start small with new accounts - see how they are managed before you commit more
  • don't trust huge promises - if someone recommends 1000 penny stocks - a few will probably give a basis for great profit stories
  • use independent research - a broker's analyst is there to make money for the broker
  • and other logical controls - you want to be in control of your own money

A much nastier felon exists that wants to steal from you - the identity thief. As can be seen from the comment on this Trans Union credit report article, you do not have to be rich to be attacked.

But wealth does make you a bigger target.

One of the reasons to take assets offshore is to protect yourself by geographical diversification, the others include asset protection from aggressive law suits and finding the internationally competitive balance of lower taxes on business.

Finance or Phinance - the eventual return of your money is more important than the promised return on your money.


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