Too Good to Be True ... or Too Bad to Be False?

Too Good to Be True ... or Too Bad to Be False?

I recently met with a gentleman who’s been a client of ours for quite a long time and, in his own words, “has been happily retired for the past four years, thanks to your guidance” (meaning yours truly). He was telling me how amazed he was about the fact that pretty much everything we’ve ever told him in reference to his investment portfolio turned out to be right on point, to the most minute detail. He’d seen how the huge stock market downturn had negatively affected some of his friends, to the extent that they had to cut back and make huge sacrifices at a time when they could least afford to do so. Yet his portfolio, under our direction, kept growing, and his retirement income didn’t experience any dips – just as we advised that it would.

As you might expect, up until this point I was having a ball, because nothing makes me happier than hearing our clients say they understand that they don’t have to suffer when the stock market tanks or tax rates rise, if they follow the strategies we carefully craft for them.

This all ended when he looked me straight in the eye and said, “Sam, you know I have to confess that had I not actually owned these strategies/products for a while now and witnessed firsthand that they truly work, I’d honestly think, ‘It sounds too good to be true.’”

My response was, “Wow, that’s a very interesting thought.” Because that’s exactly what he was looking for when we met several years ago. You see, this retiree (and virtually all investors I’ve ever met) wasn’t looking to implement any strategies or put his hard-earned nest egg into anything he did not believe to be equally “too good” and “true.”

Are there folks who actually validate retirement strategies they are considering based on that saying/principle? That would be unbelievably naïve, don’t you think? That is to say, a proposal has to sound less true to be worthy of consideration? Of course, no one should jump on board some crazy, illegitimate, or lousy proposal. But legitimate strategies that will truly help investors solve their retirement dilemmas MUST be very good and, in fact, true as well.

This phrase, “too good to be true,” originated all the way back in 1580, but it is not a credible test when it comes to dealing with serious financial planning. I’d run as far as I could from anyone who judges a proposal to be bad solely because they are unfamiliar with it or it sounds too good. For instance, this client in question would have completely missed out on his peace of mind during these trying times if he had followed the “too good to be true” principle back then, wouldn’t he?

You may recall, not long ago a young lady claimed she was attacked by a woman who threw acid on her face. Everyone seemed to believe her instantly, to the extent that her story was picked up on every website, TV, and radio program, and she was even scheduled to appear on Oprah. Soon after the dust settled, however, it was discovered that she’d staged the whole fiasco just to get attention – and boy did she get some attention! People were eager to believe something that sounded too awful to be false, which makes me wonder what would have happened if she had staged a plan that sounded too good?

If “too good to be true” makes something invalid, then by implication does “too bad to be false” make it valid? Here at Laser Financial, everything we ever recommend to our clients has to be good and true – there’s just no question about that.
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