I’m a fast food aficionado. I know who has the best fries, who has the correct combination of syrup and carbonation in their soda fountains and who serves food that’s tastes like it’s been under heat lamps all day if you come in for a late lunch.
I also know fast food finances are bad for your wealth.
“I’ll have a cheeseburger, fries and a diet coke.”
- I can’t tell you how many times I’ve heard people place this order.
- Yes, a cheeseburger, fries and a diet coke does have less calories than a cheeseburger, fries and a regular coke but that small difference in calories alone isn’t going to help you achieve your “ready for summer body” just as investing in the fund with the best returns in your 401k does help improve your finances (ordering a diet coke instead of regular coke) but it doesn’t make nearly as big a difference in your financial future as saving more and spending less (ordering something healthier than a cheeseburger and fries).
“Where do you want to go for lunch?”
- In my office, people tend to go to lunch in packs but I always wonder if everyone in those groups really wanted to eat at the same place or if they just didn’t want to go against the herd and feel like an outsider.
- Is your mutual fund manager or stock broker buying that stock because it is a good buy or because everyone else seems to be talking about that stock?
“Want fries with that?”
- Of course I want fries with that! They’re hot delicious and smell wonderful.
- I also want to go on a fabulous vacation without getting a fabulous credit card statement in the mail the next month but more importantly I hate the feeling I get after realizing I went in expecting to buy a $2 hamburger on sale and left with a $6 combo.
How much chicken is really in those chicken nuggets?
- I remember investing in a mutual fund once because their supposedly unique top down / bottom up / with a shot of espresso investing style sounded cool and I wanted to hang with the cool kids then I read the prospectus and discovered what kind of ingredients they were putting into this dish they were serving me.
- I had to look down to the ninth largest holding until I actually recognized something I understood let alone would invest in.
How satisfied were you with your order?
- My wife and I went out to dinner last night and I realized we spent more time just looking over and discussing the menu than I spent ordering, waiting for my food and eating my lunch at work that day.
- Fast food restaurants are notorious for having dining rooms filled with bright colors and loud music which encourages customers to eat faster yet research is coming out indicating customers are actually more satisfied with their orders when they are allowed to take their time and not be rushed.
Who serves the best fries? Who serves the best hamburgers?
- I have my answer for these two questions and I hate it that they are two different restaurants. I always feel I’m settling when I visit one of these chains because even though I love one of the sides (hamburger) I know there is a better provider elsewhere for the other side (fries) yet I’m a captive customer who can choose any food I want as long as it’s on their menu and from their kitchen.
- In investing you don’t have to settle and you don’t have to be a captive customer. Just because a mutual fund family is excellent in one area of investing doesn’t mean they’re excellent in all areas of investing.
- I’ve yet to find a mutual fund family that doesn’t have several funds rated 1 or 2 Stars by Morningstar as well as several funds rated 4 and 5 Stars.
