My husband loves cars.
He spends much time talking about engine sizes, displacements, and torque. I spend a lot of time nodding as if I care. This isn’t so bad; I can see his eyes glaze over when I start discussing the merits of various alternative investments or the implications of an inverted yield curve (I just put some of you to sleep, didn’t I ).
My point is, he has always wanted the epitome of the cool car, he wants to drive a 69 Camaro. Whenever we have to replace a vehicle, David comes up with a list of the virtues of the 69 Camaro, and the top of the list is “it just sounds sexy,” – which I struggle to see as a selling point.
After he makes his case (and I have had to do this more than once), I very patiently explain, without using any words like “crazy” or “what are you thinking,” that a Camaro just isn’t a practical choice for a family of 7, and that I don’t think Samantha riding in the trunk is an optimal solution to our vehicle issue.
The point is that the 69 Camaro may have a million horsepower and 5000 torque (see how good I listen?), but it just isn’t the right vehicle for our situation; it isn’t appropriate.
I run into this same situation with clients. They often ask me about some “awesome” new financial product they heard about, and like my husband, it sounds so cool. They want to buy it immediately, but it isn’t right for their situation.
A young couple with one small child had very little cash because their net worth was mostly tied up in a house. They were sold a variable life insurance policy on the child for $15,000 yearly premiums, with severe penalties for canceling early. That doesn’t mean variable life insurance is bad, but it just wasn’t right for that family, in that situation, at that time. It ate up all their extra cash and left them with nothing when they couldn’t afford the next year’s premium.
You will think that “YOU” wouldn’t be taken in by these smooth talkers, but if the person advising you is more interested in selling you a product than finding out what is right for your situation and what your goals and objectives are, then anyone can be distracted by the pretty, shiny new thing.
- If something sounds too good to be true, it probably is. Get another opinion or two, do some research on the internet, and look for a Certified Financial Planner – CFP because they are obligated to look out for your needs first, it is part of our ethical code.
- Be informed about what you are trying to accomplish. If it is getting 5 kids to soccer practice and ballet, a Camaro will not be right for you. Talk about your goals and write them down so you can remember your plan when the shiny, pretty things start being presented.
- I get suspicious whenever someone uses high-pressure and must-buy sales tactics right now. Gather your information and think about your decision. Don’t give in to “must sign today” tactics. If you are ready to move forward and have been considering it for a while, I would always say start saving and investing today and not tomorrow, but if you need some time to mull over and think of the questions you forgot to ask, please don’t get pressured into signing in the next 5 minutes or you lose your chance sort of tactics.
One day, when it makes sense, and it is just the two of us, David will probably talk me into owning his dream car. At that point, our goals and needs will have changed, and the vehicle will fit in our plan.
For now, I’m happy driving my reliable Toyota but don’t ask me how much horsepower it has. I keep looking for where the horses live in the car, and I just haven’t found them yet.
