Investing Like a Millionaire

by AlJacobs

This title of a recent USA Today article attracted my attention: “You don’t have to be a millionaire to invest like one.” The article, by columnist John Waggoner, described sensible mutual fund investment, expounding on such matters as sales and load charges, annual Roth IRA limits, and automatic reinvestment programs. But search as I might, I found no information on how to invest like a millionaire.

It then occurred to me that the author of an article seldom selects its title. That’s assigned to a newspaper employee, not for describing the column’s contents, but for attracting attention. Apparently I was not about to discover secret investment techniques of the wealthy. Perhaps it’s just as well, for the mere possession of wealth is no basis for ensuring that its holder will invest wisely. Possibly that thought seems sacrilegious—the line from the Broadway musical Fiddler on the Roof sums it up for many persons: “When you’re rich, they think you really know.”

With that said, you’re entitled to a glimpse at how many millionaires actually invest. Consider no less a personage than TV celebrity Larry King who, in November 2007, filed suit against an insurance brokerage, claiming to be tricked in a sophisticated insurance sales transaction that proved financially catastrophic. Neither his wealth nor celebrity status prevented the misfortune.

You may add to the list of victims many sports personalities, such as NBA legend Jerry West and Dodgers third-baseman Nomar Garciaparra—whose assets are legendary—who accused their prominent Los Angeles investment advisor of gouging them out of millions of dollars in excessive commissions on bond trades. Admittedly, sports figures are notoriously naïve on monetary matters, but certainly their wealth did not protect them.

Even well-to-do individuals, astute in the ways of Wall Street, are not immune to a swindle. George L. Forbes, one-time President of the Cleveland City Council, who sat on the state commission overseeing hundreds of millions in assets, fell victim to a scam that bilked dozens of wealthy investors out of some $300 million. His financial prowess proved to be no defense.

This gets us to the nub of it all. Your possession of substantial net worth will not guarantee you favorable investment results. It’s your personal involvement and analysis of each opportunity that makes the difference. Remember that your most reliable investment advisor will be the face in the mirror.

AL JACOBS, author of Nobody’s Fool: A Skeptic’s Guide to Prosperity
www.onthemoneytrail.com

Posted 7/8/2008 10:05:56 PM
About the Author



Al Jacobs
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Dana Point,  CA

Interests: Real estate, mortgage, and securities investment to appraisal, civil engineering, and the operation of a private trust company

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