I am almost immediately suspicious of anyone who offers “insider” or “secret” advice or information.
First of all, if the “secret” or “insider” information were so strong, that person would be utilizing it instead of selling it. If someone is able to use their “secret” technique to turn $10 into $10,000 quickly, why are they selling that technique instead of repeatedly turning $10 into $10,000?
Second, if the “secret” or “insider” information truly gave me an edge, it’s likely that the information has already been exploited. It’s ridiculous to think that a salesman is going to sell me a special piece of financial advice that the investment banks – where armies of people and computers are constantly trying to find market inefficiencies – aren’t aware of already.
Third, if the “secret” or “insider” information were so strong, it would quickly become part of the norm. It’s pretty hard to keep a piece of information secret if it represents a true improvement to the lives of most people.
I don’t mind paying for a well-organized collection of useful information, advice, and thoughts. I also don’t mind paying an expert to analyze my situation and figure out ways in which I could improve things.
However, if someone is trying to sell me “secret” or “insider” information, I run the other way.
Yet not a day goes by when I don’t receive an email or see a link from someone trying to sell a “secret” or “insider” path to financial riches.
I’ve seen all kinds of claims. I’ve seen sales pitches that tell me that this package includes the secrets of the Rockefellers and the Vanderbilts. I’ve seen “news” releases that indicate that there are hidden signs of financial booms and financial apocalypses. I’ve seen incredibly overstated claims of turning $1,000 into millions in a short period of time that just stretch all credibility.
If those claims didn’t work, though, salespeople wouldn’t keep using them. Someone is buying into this nonsense.
I’ve spent almost a decade studying personal finance and reading countless books on people who have achieved great financial success. I’ve come to the conclusion that there is really only one recipe for financial success. Work hard, spend less than you earn, and prepare yourself in every possible way for opportunity. That’s it. Almost every lasting success story I’ve ever read comes down to that simple recipe.
So why do people keep falling for “secret” or “insider” information? Why do people shell out their hard-earned cash for this nonsense? There are several reasons.
First, the idea of a lot of hard work isn’t really appealing, nor is choosing to save. Those are hard personal choices. In the moment, it usually seems more appealing to kick back, enjoy life, and splurge a little.
The problem is that the more we make that choice, the harder it becomes to find the lasting success that we dream of.
Second, it’s convenient to believe that people who have achieved financial success did it due to some simple “secret” rather than lots of hard work. If we don’t like hard work, it’s hard to accept that someone else put in lots and lots and lots of hard work. This is particularly true when we only see the end result – the public face of someone who has already found success.
We don’t think about John Rockefeller spending his early years accounting for every penny and spending countless days and nights micromanaging Pennsylvania oil fields. We think about John Rockefeller who magically became incredibly rich.
Almost every public figure today works tirelessly to craft a public image of some sort and to capitalize on that image. Regardless of how “trashy” you feel some public figure is, they’ve usually worked their tail off to make you become aware of them and they’ve used that awareness to make some money for themselves. Anyone can craft a public image with a lot of planning and hard work and investment.
Third, we all want a straightforward recipe to follow. Part of the appeal of a piece of “insider” information is that it will make the complexities of the world seem simple. Follow this tip and wealth will follow you, right?
The catch is that there are already very straightforward plans out there that work. They just require something from you. Even the most straightforward plans – work hard, spend less than you earn – require a lot from the person involved.
Finally, many people want to believe in a conspiracy that’s holding them back. The idea of “secrets” or “insider information” helps to build up the idea that there are powerful people that control elements of the world that allow some to become successful and keep others from becoming so.
If you believe in that idea, that the world is run by secret cabals and gatekeepers, “insider” information is useful.
The problem is that whenever you dig into the history of almost anyone who has achieved financial success (excluding oddities like the British monarchy, for example), you eventually come back to a person (or a small group of people) who came from nothing and worked their tail off. You might have to go back a few generations, but the truth is that there is no secret gatekeeper. There is no secret cabal. There are just people who worked hard and the descendants of those people.
Work hard. Spend less than you earn. Maximize opportunities. That’s the recipe. There’s no “secret” or “insider” information involved, so don’t waste your hard-earned money or time on such nonsense.