Stop Being the Victim

Watching the news can be scary. You get the sense that everyone is out to get you. You are destined to be a victim, especially when it comes to your finances. That Internet-based business that you thought sounded promising turns out to be a scam. Tried to play it safe? The banks were over-leveraged and your deposits, along with the entire financial system, are in jeopardy.

The role of victim can be seductive and appealing. Victims don’t have to take responsibility for their failures. It’s someone else’s fault. The role can be especially attractive when you are part of a class of victims. The more suckers there are, the less you feel responsible. Misery loves company.

Did you get a negative amortization adjustable rate mortgage because a mortgage broker told you it was a good idea? Guess what? You were taken advantage of! The broker was looking out for himself and not you. Can you imagine? Forget about all those disclaimers and disclosures that you signed. You are a victim, and there are many more victims just like you.

Has your retirement account dropped by 50 percent? You’re not alone. The greed on Wall Street is to blame. The incompetent and corrupt politicians stuck it to you again. It’s a lot easier to be mad at “them” then it is to take responsibility and do something about it.

While the role of victim is easy on your self-esteem, at the end of the day, you are still the loser. Regardless of whether you accept the responsibility or not, you end up with the short end of this stick. You still have to deal with a lousy mortgage, possibly even foreclosure. You still have to deal with half of a retirement nest egg or worse. In the role of victim, you suffer all the same consequences with just a little less of that uncomfortable guilt.

We have all been the victim at some point- sometimes a real victim and sometimes the finger-pointing type. Those that get ahead in life have made conscious decisions to stop being victims. They have decided that they are going to take matters into their own hands. They are not going to sign documents without reading and understanding them. They are not afraid to ask questions. And perhaps most importantly, they are not afraid to fail. These survivors realize that any missteps they may take along the way are learning experiences, and the consequences are far less severe than the mistakes of a well-intentioned but incompetent advisor or the misdeeds of a highly qualified but unscrupulous “professional.”

The key to becoming a survivor is to decide to stop being the victim, real or perceived. This is easy enough to accomplish with a few straightforward guidelines and simple determination to take control of you financial future.

 10 Ways to Avoid Being a Victim

1. Have a plan. With a long-term plan and strategy in place, you are much less likely to be tempted by that new “hot” investment that someone is trying to sell. While you should update your plan and strategy periodically, never make an investment that does not fit within the parameters of your plan.
2. Be involved. The more involved an investor is in both formulating and implementing an investment plan, the less likely he or she is to become a victim of theft or incompetence.
3. Do your homework. There is no substitute for research. Thoroughly research the investment category, the specific investment that you are considering, and all the companies and individuals involved.
4. Invest in things you understand. What you don’t know can hurt you. Warren Buffet, one of the most successful investors of our time, has a policy of only investing in industries and businesses that he understands. If you don’t fully understand an investment, you can’t evaluate the risk involved. Investing only in things that you understand does significantly reduce the number of potential investment options, but that is a good thing. It also significantly reduces the risk of being victimized by incompetence of theft.
5. Work with advisors on your terms. It’s not that you shouldn’t have trusted advisors-good advisors are worth their weight in gold. But you must be up front with potential advisors as to what their role is and what you expect. Use advisors to gather information and make recommendations but, ultimately, you must make the decision and take responsibility for the outcome. If the advisor recommends and investment, do you research. No matter how strongly and advisor recommends and investment, don’t make the investment unless you understand and are completely comfortable.
6. Take responsibility. While you can delegate research and fact-finding and solicit recommendations, you cannot delegate responsibility. Adopt the mindset that you get the credit if things go well, and you are responsible if they don’t. Working with this perspective, you are more likely to take the necessary actions to ensure success, instead of delegating responsibility and hoping that things work out.
7. Read the fine print. Don’t let anyone gloss over crucial details as “standard” or “attorney stuff” and don’t allow yourself to be rushed. Don’t sign until you understand, and if any terms conflict with what you are being told, verbally don’t just walk away, run!
8. Be leery of those who sell their “secret” for getting rich. If the secret is so effective, why aren’t they doing seminars or selling books and tapes to make money? Real education is invaluable, but when a secret is involved, it most often involves how to separate you from your money. Learn to recognize the difference between education and scam.
9. Trust your gut-sometimes. Trust your gut feelings of “trouble,” and verify your cut feelings of “opportunity.” Your instincts are much better at detecting danger than opportunity. If your gut tells you an investment is a good opportunity that is your prompt to start doing research. Always base your decision to move forward with an investment on the facts, not your gut or emotions. However, even if your research and the facts don’t reveal any problems, you should walk away from any “opportunity” that doesn’t feel or smell right.
10. Open a self-directed IRA. A self-directed IRA is all about taking control, taking responsibility, and investing in what you know.