SCOTT REED: Rule No. 8: What you invest trumps how you invest



In our industry we spend a lot of time talking, writing and arguing about the next great investment idea.

It is in our nature to focus on those things we can control and those things for which we get paid. I write from time to time about the secrets we have in our industry. Those things that can help you reach your goals, but don’t always make us look as good as we would like.

We want you to believe that we are the answer to your prayers. We can make the difference in how you live your life. But when it comes right down to it, you make the difference in your financial life. You are the one who decides what is important now and what is important later in life.

I can’t tell you if a 60-inch flat screen TV to watch the Super Bowl is more important than saving for college I’m not at Best Buy or Walmart when you are staring at the wall of TVs dreaming of actually seeing that little yellow ball in high def when you are watching Wimbledon, but that is where the rubber meets the road.

Those everyday decisions are the difference between having enough for college, retirement, or your daughter’s wedding. Yes, people are now beginning to start wedding accounts for their children.

I can put together a plan for you that should make what you do better over time, but, how much you earn on your investments is directly tied to how much you invest. If you make 10 percent on your portfolio over the period of a year, I would consider that a good year. If you invested $1,000, you will have earned $100. If you invested $10,000 you will have earned $1,000. And if you had invested $100,000. you would have earned $10,000. All three portfolios had the same return, but the dollars you can spend are much different.

The point is that I can do a great job for you and you still won’t get where you want to go if you don’t commit yourself to the same plan. Making money is not what this is all about. It is about reaching goals. If your investments only average 2 percent a year and you have managed to have all the money you need for college, retirement, vacations, etc., then you will have had a successful investment life. If on the other hand,you have managed to make 12 percent a year for your entire life and still fall short of all your goals, then you have failed.

Success has much more to do with your commitment to your financial plan than my commitment.

Don’t get me wrong: I’m not saying that you don’t need to invest. Remember the parable of the talents? I am not suggesting that you put your money under a mattress. A good investment plan can make a big difference in you reaching your goals, but this is a team sport. You may need me in order to reach your goals, but I can assure you that I need you more.

Just like the Tom Cruise line in the movie Jerry Maguire, “Help me help you.”

Scott Reed is CEO of investment advisory firm Hardy Reed in Tupelo. Contact him at (662) 823-4722 or

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