Investors, Do You Know The Rules & Can You Verify They Are Being Followed?

Investor's, Would You Know If The Rules For Successful Investing 

Were Being Followed Or Violated?

                                          By: Brendan Magee

The other day a client of mine asked me for some help with investing in her company's 403b plan, a nonprofit company's version of a 401k plan. She wanted some assurances that she was making the right choices from the list of funds available. 

We sat down with the guide book for her plan which went into not only the investment options, but also participation rules. For example, there was a lot information on when and how money money could be accessed with or without penalty, when changes could be made,etc. The booklet was about 150 long.

As we made our way through the investment options and how much she was going to contribute to the plan, I noticed something pretty significant was missing from all the information we had. There was nothing that clued Joan in on the rules she needed to follow in order to make sure she was going to be successful and achieve  financial security with her retirement money. 

There was also nothing given to her that would enable her to verify that the rules were being followed or violated. After signing up and contributing to the plan, the success she wanted to achieve was totally out of her hands. She was at the mercy of the people who would now be managing her money. People she never had or probably ever would have the chance to meet.

As we discussed what was missing, Joan was not feeling as confident as she would have preferred. She said it would be nice to know what the rules were before she made her investment selections so she would be able to discern which investment companies were following the rules and which ones weren't. She didn't want to find out five, ten, or fifteen years down the road she was being taken advantage of. 

Fortunately, we took our time and went over the rules for successful investing and found a few investments within the plan that she felt good about. We also set up a system to measure whether or not the rules were being followed and the plan was being successful or not.

The question I asked and Joan was wondering about was, "With all the information being supplied to investors, be it in a 401k plan, a 403b plan, or personal brokerage accounts, how come the rules for successful investing are not the first bit of information given to investors? Why isn't it listed any where in the information they are providing investors?"

So the $64,000 questions are, Do you know what the academically proven, empirically proven rules are for successful investing? Do you have the ability to verify that the rules are being followed or violated? If you cannot answer these questions with a 100% yes, give me a call or shoot me an e-mail.

P.S. If you do know the rules, get in touch and let me kow how you came across them and how you verify they are being followed day-in-day-out.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments go to www.Coachgee.com or call 610-446-4322.