I linked a Marcus Padley article three weeks ago, Want to get rich? Here’s a brutal crash course. I might have to reassess my view of Padley as this is another corker article. He expands on my thumbs down on CBA’s Capital Series with an entertaining and insightful damnation of final products in general. As Padley is a stock broker he does have an incentive for dissing financial products, but agenda or not he is right and everyone should heed his wise words. What follows are a few choice snips from Padley’s article, please do read the original and then think twice and twice again if you ever feel tempted by a  financial product ever again. 

An explorer’s survival guide to the money jungle by Marcus Padley

■ Remember the golden rule: If it’s any good, you wouldn’t be offered it. If you get offered it, you don’t want it.

■ If you don’t understand it, don’t buy it. Complexity is camouflage.

■ Be very careful borrowing to invest. There aren’t many (any) asset classes that will reliably return you more than the cost of borrowing. There aren’t any that will return it without risk.

■ Reward is always balanced by risk. You will be told about the rewards. If you can’t see the risks, you clearly don’t understand.

■Anyone selling you a return of greater than 9.5 per cent per annum either has his fingers crossed behind his back, is lying or hoping or is selling you a greater-than-average risk.

■ Anyone earning a commission of more than 2 per cent is selling something hard to sell; you probably shouldn’t buy.

■ Your stupidity is directly proportional to how unrealistically rich you want to be. Only the financially ambitious (to use a polite expression) sent money to the Philippines.

via Business Age

Related posts:

1. Ready Set Invest
2. Want to get rich? Here’s a brutal crash course