Why don't rich people manage their own money?

Quote from Debaser82:

Apparantly from the moment you own 500k or 1 million you get promoted at your bank and you get the honour of letting your money and capital being handled by some paper shuffler who is suposed to be in the know and capable of offering high returns.

One would think those achieving some kind of financial wealth have the life knowledge to take their destiny into their own hands for better or for worse.

Or you can ofcource decide to trust your money to some independent wealth management advisor....who drives a top class car.... simply earned on the fees of managing other people's money.

I think a lot of the money these entities are alowed to manage is due to peer pressure amongst 'the rich' (not talking ultra rich here).

You need to drive a fancy car, own a nice house and have your money handled by a top of the line house of finance.

Sad really, cause these advisors obviously have as much of a clue then the next guy and if they did have quality advise available you'd obviously have to be a gigantic whale to be allowed into the inner circles.

Any thoughts?:)
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Because a large portion did not have to work too hard for it, usually the got the money as an inheritance or were born in the right family so they are hooked up right away with a position in a company where they just get paid a huge salary. etc..

So since they did not have to sweat it they really dont care too much and will just let some McFund or McAdvisor mismanage their money.


I manage my own wealth but I had to worked darn hard for it, so I take care of it carefully.

I recommend you read the book Bull! if you really want to see the ugly side of Mutual funds/managers and the fools who assume the money is actually being managed.
 
I think the rich got rich because they do what they love. Example: Singing, dancing, acting, playing sports, etc.

The main thing is that they know what they do could make them money. So, they would rather focus on generating money by doing what they love than to manage their money. Any free time that they have, they would rather use it to enjoy the good life.
 
Quote from KINGOFSHORTS:

Because a large portion did not have to work too hard for it, usually the got the money as an inheritance or were born in the right family so they are hooked up right away with a position in a company where they just get paid a huge salary. etc..

So since they did not have to sweat it they really dont care too much and will just let some McFund or McAdvisor mismanage their money.

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That is so far from the truth it's pathetic. Most people who are wealthy are entrepreneurs that can make more money doing what they are doing than managing their money in the stock market.
 
Quote from KINGOFSHORTS:

Because a large portion did not have to work too hard for it, usually the got the money as an inheritance or were born in the right family so they are hooked up right away with a position in a company where they just get paid a huge salary. etc..
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You underestimate the number of households who made their millions from nothing.

Being born poor can be a huge motivator.
 
If one of my well off friends told me that he fixed his own car or installed his own furnace, I would be shocked. Since I have zero competency at those things, I assume that my peers are in the same boat. In the same way, people are nearly always shocked when then find out I manage my own money. I think that most well off individuals do not believe they have the knowledge to manage their own money, so they do not have the confidence to do it. Most are also too lazy or to or too busy to read about it.

Strangely, the question people used to ask their acquaintances 20 years ago was, "Do you have a financial adviser?" Now the question is, "Who is your financial adviser?" Everyone thinks they are like a mechanic or a dentist--they assume that you must have one.

I have had numerous people clean my house, take care of my yard, etc. None of them have done a really stellar job of it. But I don't want to do those things, so I accept that they will not be done completely to my satisfaction. I have noticed that some people accept this about their money: they think that it's too much trouble to deal with it themselves, so they let someone else do it, even if the person is doing a mediocre job. Sometimes they change their financial adviser, but it seems to me that is like changing your lawn guy or your cleaning gal. You are just going to trade one imperfect person for another, so it's hardly worth it.

Don't you find the "don't try this at home" mantra of some people in the financial industry extremely annoying? Certainly many of them are honest, but they are no smarter than I am (probably less so) and they will never care as much about my assets as I do myself. Probably most people posting here are like me and have no use for financial advisers. But the clueless people still need them, and like my lawn guy, they are probably better than nothing.
 
Most people think that the rich are smarter people. Yes, they are smart in making money, but not in most other things. If you want to meet the smartest people, go to a department of physics in a research school.

I have seen at work that the best minds keep working and do not take the promotions and also that they do not get into management, while the marginal people get into management and move up and make much money.

Does that answer your question
 
I think the major difference between the rich and working class is that the rich share their passion with the world. The working class just want to keep everything to themselves.
 
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