Updated July 2023
Searching for investing information, advice and experts who doesn’t want accurate, quick answers?
Nearly 30 years ago starting out in married life and in a legal career, my husband and I searched for investing options. I went to an investing seminar by Jan Somers, a popular Queensland property investor and educator. I was attracted to her arguments for the benefits of investing in property:
- direct control over your asset (bricks and mortar)
- the ability to add value by renovating
- the benefits of capital growth
- the tax benefits
Excited by the idea of buying real estate I was ready to plunge fully into real estate investing and leverage our career income for a more independent and secure future for us and any kids (should we be fortunate enough to have any).
Then along came the advice from accountants, financial advisers, friends and family. We were scared by horror stories about Queensland property spruikers (many of the Trade Practices Act cases did seem to come from there).
An accountant friend suggested we pay off our mortgage first, and that he could suggest an investment in trees that would guarantee us much higher returns!
So we didn’t buy any property, but instead bought into a managed fund through a financial planner. We sold out of it some years later and lost all of our meagre investment.
A decade later (doesn’t property double every 10 yrs – if only I’d bought then!!?) after a life changing event (my dear dad died) I ‘smelt the roses’ and found the courage to revisit my love for property. But have you ever felt too, that investing advice and options, particularly real estate, seem endless? The websites, seminars, books, subscriptions, friends, the media – so many choices.
Most professionals, experts and successful people are passionate about their particular area – especially when it comes to financial investments. Often they’re also great at making what they do, their strategy and modelling them look easy. But have you ever had your expectations about what you could achieve raised – only to be dashed?
Unfortunately you’ll also find opportunists who take advantage of investing naivety and any lack of investing knowledge or experience. A scam is often hard to see – until it’s too late. Many offer to show, tell or teach you how to get great results, but will they deliver? Are these the best people to give you the information and advice? Exactly what are the products or services you’ll get in reality?
Be clear on some basic questions and you’ll increase your chances of success.
5 Tips for avoiding investing information and experts that may not suit you
How much time and effort you put into following our tips (as with due diligence of any investment) will vary depending on your circumstances. Things such as how much you’ve got to invest, the value of the property, and how important it, or getting started is to you, and your aversion to risk. You can find more specific guides on things to watch out for (see our resources below), but some tips and very basics you should think about are:
- Know why you are attracted to the offer – what do you hope to get from your investment? Is there something else you could do, or invest in, that would suit you better at this time in your life?
- Look closely at what you’re really getting and beware of any pitfalls – beyond any marketing hype.
- Find out how qualified the person is to give the advice. The fact that they have done it themselves alone isn’t enough. Check out any other industry providers or consumers with different, or contrarian, opinions about them, their methods or strategies. Check out what any Guru Cops or other experts in the area have to say about them or their strategies.
- Check that claims of the benefits by testimonials, referrals and the like are backed up by genuine and specific evidence of results. Were the results achieved by actually following the advice or systems? Are there any additional, or unforeseen costs?
- Make sure the results others have got match the results you want
Most investing professionals give their best, honest advice. But you’re unlikely to get good results unless you follow advice, recommendations or referrals that are as independent, impartial and as transparent as possible.
You don’t have to gamble. You can easily find many useful resources to help you with these tips. In our investing report you’ll find some: tools, guidelines and checklists to help you pick scams and decide what type of investing or strategy suits you.
- You’ll find many local and national, government and non government, and industry regulators and watchdogs in BiG’s Guru Cops. But often they’re reactive – often slow to act and with limited powers. Many produce (for free) investing guidelines and checklists on how to start, and what to watch out for, such as:
- Money Smart (ASIC) Scamwatch (see “Investment seminars and real estate scams“)
- The Australian Consumer and Competition Commission (ACCC))
- Investigating tax effective arrangements – how to work out if an arrangement is a tax avoidance scheme (ATO)
- Choice see Options trading seminars – “Is options trading a dangerous get rich quick scheme or a low risk strategy to pofit from volatile markets”
- Industry consumer advocates such as Neil Jenman (real estate), or others in the industry such as Margaret Lomas (real estate), Scott Pape (financial advisory)
- Consumer websites Blogs and Forums such as InvestEd, Somersoft
- You will find many more, specific to the type of investment in our investing updates (especially those with guru reviews – see contrarians) and at Guru cops.