I’ve run into more people than usual lately who seem interested in talking about money and investments. These conversations often end in roughly the same place. Here is a shortened version:
Polite Person: “So, what do you do?”
Me: (list a few professional activities) “... and I write a financial blog.”
Polite Person: “Oh, really? So, what’s going to happen with stocks/interest rates/the economy?”
Me: “I don’t know, and I don’t believe that anyone else knows for sure either.”
That’s usually as far as it goes. I try to avoid talking money to people who aren’t interested. Lately, several polite people I’ve met have continued the money talk:
Polite Person: “My money is in mutual funds with Fund Company X? What do you think of them?”
Me: “They are charging you about 2.5% per year in fees. In 30 years, more than half your money will be gone. Instead of a million dollars for retirement, you’ll only have $500,000.”
The conversation then goes to the advantages of low-cost index funds, but ends as soon as I explain that this polite person can’t just instruct his financial advisor to switch him into low-cost index funds because the advisor won’t collect commissions that way.
The prospect of opening a discount brokerage account and doing the buying and selling themselves seems to be a deal breaker. Whether the problem is laziness, fear, not believing me, or not trusting themselves, they seem unwilling to make a change even though it will save thousands of dollars each year.
I don’t give anyone a hard sell, partly because it doesn’t work and partly because I don’t know their business well enough to give advice. However, I find it interesting that some people seem interested, understand what I’ve said, believe that they can save a lot of money, and yet they remain paralyzed.