I love detective dramas and one of my favourite is Columbo. Part of the reason is that you get to know “who dunnit” up front – no waiting for the final frame to find out who the killer is. The rest of the show now becomes a battle of wits between the dishevelled detective and the killer. The killer, of course, always underestimates Columbo’s intelligence and in some cases mocked him.
Now what I love about Columbo is that he always knew from the start who did it and actively included the killer in his investigations. A kind of cat and mouse game between the two. He starts to gather the intel to prove his case.
So what does this have to do with money management? You owe it to yourself to know the facts. Why that particular investment? What’s the proof that it is a good investment? Do your research. It is better to be thought a fool than to be one. Colombo is always treated like a twit by the prime suspect and it is always delicious to see the the change that comes over the latter when he realises he’s been caught.
Likewise, when you are dealing with financial gurus who are trying to run rings around you, it’s always nice when you get to show them that you’ve done your homework and are on to their scheme (or scam). To paraphrase Warren Buffett, the rule is not to lose money. Just spending a little time understanding a transaction can save you losing a ton of money and if you don’t understand it, walk away.
Know the basic facts about where you are putting or spending your hard earned money – knowledge is power. Approach each transaction with foreknowledge and know the basics at the very least.