Sometimes, it’s hard to have the right answer. I’m not talking about getting the right answer, but having the right answer at all. Especially when everyone around you has the exact wrong answer.
A few months ago, I had a client that wanted out of stocks (good idea), and wanted to know where he should go. Ironically, my company offered the best rate for short term CD’s (Certificate of Deposit—basically, they are long term savings accounts. There’s limitations on allowed transactions for a set period of time, but you get more interest in return) at the time. I suggested he go with us. Another institution offered what looked like a better rate for a shorter period, and he went with them. Since then, EVERYBODY’S rates have gone down. I knew this was coming, and I told the client. He just didn’t want to listen. Well, now he comes back in wanting to get the same rates we were offering before, only we aren’t offering them anymore. In short, he’s a little screwed.
Again, I told him rates would be coming down, and I even showed how the rate he was being offered meant less money at closure than ours did. When he came back in, I gave him the best he could get, but it was still a lot less than what he could have earned.
Monday, I saw a rerun of HOW I MET YOUR MOTHER where two of the characters were in the process of making several financial mistakes. The running gag was that the friends would say the right thing, the frame would freeze while the narrator would say, “is what we should have said”, and then what really happened did. It was pretty funny, but I always think that show is.
Is it better to insist on giving the right answer all the time? It really depends on the big picture. In my client’s case, even though we are fairly close, I couldn’t tell him how stupid his decision was and how much he would regret it. The end result would be that he would have taken all his money out of my institution, he would have gone ahead and opened the inferior account anyways, and he wouldn’t have felt comfortable coming to me after it blew up on him. He would have lost a connection to someone who was looking out for his best interests. On the show, the end result would have been breaking up a close friendship with the same mistakes having been made. Nobody wins and everybody loses. The point is, sometimes doing the right thing (being a friend) is more important than being right.
In PF, there are thousands of “experts” out there who try really hard to be right, but are less concerned about doing right. Some do it because they don’t know any better, others do it because it amuses them to do so, and others do it because it is more profitable to do it than not. This happens in life too.
When you are faced with the choice of being right and doing right, make sure that the decision you make is one you are willing to stick with, no matter the consequences. Look at the big picture, and make the best decision you can.