I. Businessman. (Part 10)
Do not buy gold!
Advice I received ten years ago, from an investment advisor of a leading bank in the country.
The logic was this… Gold has traditionally been a bad investment, as compared with other investment opportunities. So, going by historical data, it is not a good idea to invest in it.
Then came the stock market crash. And against all other investment opportunities, the only thing that actually grew in value was gold. It broke all records and rewrote all the historical data that existed.
The very same investment advisor, then enthusiastically told me ‘Put your money in gold bullion funds!’
It is a different thing that I would never put my money in gold. I personally do not believe in hoarding a metal that is so volatile in price.
However, the fact is that when I should have been buying gold, the executive advised me not to, and when I should have been selling it, he asked me to buy.
Looking a little deeper, I understood why. His bank had a mandate to sell particular products in both instances. And that is what he was doing. It didn’t matter what I needed. It mattered what he needed.
Learning No: 12
Advice is cheap. Even if it is paid for.
First there was God. Then there was the Devil. Then there were Advisors.
They are everywhere. Providing you unsolicited or solicited advice. As long as they don’t stand to lose out, giving advice is very easy.
A friend of mine was a retail consultant before be started his own retail business. Only after going solo, did he realize the weight of the words he used to throw at his clients, without thinking twice.
Once he started off on his own, he realized that every suggestion had an aspect of cost attached to it. So when it boiled down to following the advice that he used to merrily dispense, he started figuring out innovative solutions, ways to make the best of the situation, rather than reinventing the wheel every time there was a problem. Importantly, the innovative thinking only came into play, when it was his money at stake.
So, as a businessman, never take the advice given by someone who either is not affected by it, or stands to gain from it.
It’s like asking a server at a restaurant if the fish they serve is fresh!
I’m not saying that you should never take advice. All I recommend is that you should get a second opinion, do some research by yourself and use your brains (and trust me, this is really the toughest part) before you take a decision.
Eventually, if things go wrong, you will fight the fire alone. You alone are liable for mistakes you make. You alone will take the flak. None of these advisors will stand by you then.
Do not trust anyone blindly. You will live to regret it.
TO BE CONTINUED…
(This is part 10 of a series of blogs on my learnings as an entrepreneur )
Read Part 11 here