Ignore the Hype

Chapter 12Avoid the Wolf in Sheep's Clothing

Your quest for financial independence will have far greater odds of success if you manage to avoid the wolves of Wall Street. This probably doesn't come as much of a surprise to you, and it's no secret that the financial industry doesn't always enjoy a sterling reputation. The problem is that it can frequently be difficult to differentiate between good and bad advice, particularly since highly compensated financial professionals are often motivated to put lipstick on a pig by making investment products and services sound far better than they actually are.

So how do you distinguish good from bad, and honest from corrupt, especially when all the advice you're hearing is delivered by well-groomed, well-educated, well-spoken financial professionals?

Well, there's no magic bullet to guarantee you're working with the right person, but read on for a few thoughts and suggestions on how to evaluate your financial advisor, as well as some pitfalls to avoid if you hope to find financial freedom.

Does It Pass the Sniff Test?

Before I go into details and specifics, let's start at the most basic level. After all, you're probably already aware of the role common sense plays in most areas of your life, so why should your finances be any different?

So, when it comes to your finances, please use common sense. If something sounds too good to be true, it probably is. If someone doesn't seem trustworthy, they probably aren't. If you feel a financial ...