Should You Follow A Wealth Guru?

Before signing up for that pricey seminar, check your emotions

Years ago, I paid good money to attend a weekend seminar on forex trading.  The seminar was intensive – from nine in the morning till nine at night. We were told to bring our laptops to learn about the intricacies of trading currencies, using our trainer’s fail-proof method.

I had signed up after hearing the wonderful testimonials of ordinary Joes and Janes who were making thousands of dollars by the minute – just by trading on fluctuating currency patterns.  The forex market, we were told, was larger, more robust and more predictable than the stock market.  Anyone can learn to trade safely – even 9-year olds – declared the trainer, as she showed us a picture of her young daughter and her impressive returns. To sweeten the deal, the seminar even came with a one night’s stay at the five-star hotel and we could invite our partner/friend/family member to stay with us and attend the seminar for free.

Great! A seminar-staycation?  I was sold. At that time, I was unhappy at work and what I heard during the seminar’s preview was music to my ears – earn a second source of passive income and say goodbye to your boss. When my friend and I checked into the seminar, we found ourselves in a big ballroom with about 80-100 participants of every age – from schoolboys and young adults to middle-aged folks and retirees.  The first part of the seminar involved some motivational singing and exercises to focus our minds on ‘manifesting’ wealth.  The actual training on forex began on the second day, a Sunday.  With our eyes constantly switching between our computer screens and the trainer’s big screen, we looked out for ‘buy’ and ‘sell’ patterns in currencies A and B, using our dummy trading accounts.

As the hours went by, I realised with a sinking heart, that I was just not getting it. Reading charts didn’t thrill me at all! I felt dizzy, like a dumb astronomer searching for tiny stars and planets that I couldn’t see. After my seminar, I went home, put my course manual aside and carried on with my life, feeling terribly guilty that I had just spent a four-figure sum learning nothing.

I wonder how many millionaires were born during that weekend? I suspect not many.  Maybe the only millionaires were the trainers who were so passionate about sharing their secret to wealth that they became very rich themselves. Today it appears that wealth building seminars are as prevalent as slimming and weight loss programmes – competing for the same ad space in Facebook and the media. They share striking similarities. Both offer the stunning promise of a magic pill – “follow this advice and your life will never be the same.” Both share ‘before and after’ stories of ordinary individuals who have transformed their lives by following the wealth/weight loss strategy successfully.

We are offered a plethora of choices to help us reach a goal – whether losing weight or gaining financial freedom.  On the wealth side, we can build wealth through forex,  property, equity, metals, options, bitcoin, commodities, internet and network marketing and so on. On the weight loss spectrum, we can drink lots of green tea or follow the Grapefruit, Atkins, Paleo, Vegan or whatever flavour of the month diet that celebrities are following.

There’s nothing inherently wrong with following the advice of a wealth or weight loss guru – provided you follow them consistently.  The problem is, most of us can’t and don’t.  If we did, we would all be rich and skinny, and the wealth and weight loss gurus will go out of business!

So what’s really going on inside our heads when we sign up for seminars and programmes? We are driven by the twin emotions of Fear and Hope.  As the economic climate becomes more uncertain, panic and anxiety sets in. We fear having no money and we want solutions. We naturally turn to people who can help – especially the experts who have overcome the same difficulties – who were in fact, just like us once upon a time.

Believing that what works for them must work for us too; we try to copy their strategy, without really questioning if their method suits our personality, character, interests and habits. Wealth seminar junkies and people with eating disorders are eerily similar. They keep chasing the ‘fix’ – the wealth junkie jumps from one get-rich-quick scheme to another; while the weight loss junkie can’t stop obsessing about food and exercise. Here are 5 soul searching questions to ask before you sign up for that wealth building workshop,

What can it teach you that you can’t learn yourself for free or cheaper? True, wealth gurus have lots of knowledge or expertise to share – but they also know how to push your hot buttons and make you think that you cannot consult anyone else but them! However, if you do your homework, you’ll realise that you can learn to be a better investor by taking advantage of the many free learning resources on the internet. You can also attend the many free and inexpensive workshops offered by Singapore Stock Exchange and SIAS (Securities and Investors’ Association Singapore).

How much time and energy can you commit to practice what you learnt ? Wealth gurus like you to think that they have the magic formula but they don’t.  The hard work of reading, studying, absorbing information and taking action starts right after the seminar. How much time, energy and money are you willing to invest to follow the guru’s advice? Does the investment formula they teach stir up your passion and imagination? Are you willing to do whatever it takes to master the skills you learnt? We are all natural optimists and we love to buy the promise; but we rarely think about the hard work that we need to put in before we achieve the results.

How much money do you realistically hope to make and when? Most people sign up for wealth seminars, hoping that they will learn how to achieve financial freedom and eventually retire from their jobs. But exactly how much money do you want to make? How much can you afford to invest? Put numbers to your dreams and add a timeframe. If you have no idea of how much money you want to make, then you are approaching your investment with a gambler’s mindset – the same mindset that says “Ok I have a bag of five cents coins – let’s see if I can hit the jackpot!”

What’s your pain threshold? Many gurus seem to imply that we can achieve something for nothing. “Own properties with no money down” was a strategy touted by a famous guru who got us to pity his poor wage earning Dad as a miserable loser.  The great market crash of 2008 happened precisely because too many people believed that they can get something for nothing. Many ended up homeless. The promise that we can own properties with “with no money down” is still being actively promoted today. But the truth is, the outcomes will vary depending on luck and timing. Wealth gurus rarely talk about the bad outcomes and they are not responsible for your losses. You are.

What’s your learning style? I like learning about investments from the ‘macro’ point of view. I like watching and following news and documentaries about industries, people and places. I dislike hunching over my laptop and smartphone looking for symbols and patterns at odd hours of the day. No wonder I was hopeless in my attempt at studying forex trading! If your habits and interests are different from the guru’s, don’t sign up. One way of finding out is to attend the workshop and seminar preview. Is the guru recommending a strategy that is at odds with how you would rather spend your time? Be honest now – can you imagine being in his or her shoes doing what they do? If the answer is no, keep your money!

The bottom line is this: there are many roads to financial freedom as there are many ways to lose weight. Find a wealth building strategy that comes naturally to you; that you enjoy following; that gives you peace of mind without sleepless nights – even if you don’t become a millionaire.