There are not many financial advice authors who come right out and tell readers, “You have probably been fed investment propaganda that makes stockbrokers a lot of money in commissions while taking it out of your pocket.”
But that is exactly what Mark Matson does. He is the founder and CEO of Matson Money and the author of Experiencing the American Dream: How to Invest Your Time, Energy and Money to Create an Extraordinary Life. His company was one of the first registered investment advisers to reject a commissions-based model, which Matson viewed as “structurally incompatible with investors’ interests.”
“Our mission,” Matson says, “is to help protect your hard-earned money from speculating and gambling through education and training.” Matson discusses road blocks that prevent so many people from being able to experience the greatness of America: “A potential to reach your goals, whatever they may be, that is the heart and soul of the American Dream.”
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A theme repeated in this inspiring and practical book underscores, “Making money is important, but unless you live your life with purpose, thinking of others, being there to help, and have a sense of generosity, no amount of money will make you happy.”
Not only does Matson help to steer us away from costly financial traps, but he provides a road map to living a better life.
We discussed three red flags that can lead to financial insecurity.
1. Not talking about money as a family, which creates vulnerability
“Surprisingly,” Matson observes, “so many people grow up in an environment where money is taboo, not to be discussed. We call that the ‘no-talk rule.’ This attitude stands in the way of attaining what the American Dream offers and creates a vulnerability, getting trapped into speculating and gambling, mentally living in a world of scarcity, because money has a negative connotation.”
2. Getting bad advice: Stock picking, market timing, trusting a guru
Matson shares the destructive advice given to him by the president of a brokerage in his first job as a financial adviser: “Try to pick the right stocks that are going to make a lot of money. Do market timing — getting in and out of the market at the right time. And if you’re not good at it, find somebody else who has a good track record and trust them with your client’s money.”
Now, how often do you find a financial adviser who admits they were wrong? Matson does: “I did all those things, and it was an absolute disaster! We didn’t know what the best stocks were in advance, what the market was going to do, and trusting someone that had a good 20-year track record had zero correlation to doing well in the future. All of this is gambling, trying to predict which stocks are going to be best in the future, no matter who you trust your money to. These are dream-killing events.”
3. Thinking commission-driven brokers care about you
“‘Look, this isn’t working,’” he says he told his employer. “‘Our clients will never reach their financial goals if we keep doing this with their money.’”
And the response? “‘If something you sell them doesn’t work, just sell them something else. If you lose them as a client, just sell to someone else and earn more commissions.’”
Two parts to a prudent portfolio: Investing principles and emotional fortitude
So, how do we get away from commission-driven investing that can cost us dearly?
“The first step is understanding the principles of academic investing, establishing your portfolio and having the emotional fortitude to stay with it and remain disciplined over a 30- to 40-year time frame,” Matson notes. “But the mental side — emotions — is critical and where people go wrong, even if they have a good model. Our instincts lead us to panic, sell when things are down and buy when they are up — the exact opposite of what we should be doing. And then there are many dangerous, subconscious biases. For example, the ‘herding bias’ that is great for zebras but bad for investors.”
He explains how that becomes so destructive: “Herding is disastrous for investors. If everybody is doing something, we feel safe if we do that, too. ‘Oh my gosh, everybody’s getting rich on bitcoin. It is so easy. I don’t want to miss out, so I will buy bitcoin.’”
Another example: “The market goes down, and everyone sells, keeping their money in cash, so we feel comfortable doing that, too. And the list goes on. There are over 185 biases people have which can get in the way of sound investing.”
Beware of toxic investments
Matson wants readers to understand the Bigger Fool Theory, or a sucker born every minute. “Bitcoin is the perfect example of total hype, as there is nothing there,” he observes.
He also points out the enormous risk of keeping all your retirement funds in your employer’s stock, known as having a concentrated stock position. “Think of Enron. Think of banks that fail.”
Experiencing the American Dream is a gift to its readers, as is its author.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
- Nine Financial Tips These Experts Wish They Knew a Long Time Ago
- Are You Paying Too Much for Financial Advice?
- Six Things Not to Do if You Want to Resolve a Conflict
- How to Spot a Contractor Who's Not Playing by the Rules
- FTC Cracks Down: Fake Reviews Officially a No-No
-
Quiz: Do You Really Know How Social Security Benefits Are Taxed?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
Are You Ready for 65? The Medicare Initial Enrollment Period QuizQuiz Turning 65 soon? Test your basic knowledge of Medicare's Initial Enrollment Period (IEP) rules in our quick quiz.
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
Giving Tuesday Is Just the Start: An Expert Guide to Keeping Your Charitable Giving Momentum Going All YearInstead of treating charity like a year-end rush for tax breaks, consider using smart tools like DAFs and recurring grants for maximum impact all the year.
-
Uber Takes Aim at the Bottom Lines of Billboard Personal Injury LawyersUber has filed lawsuits and proposed a ballot initiative, in California, to curb settlements it claims are falsely inflated by some personal injury lawyers.
-
Dow Slides 427 Points to Open December: Stock Market TodayThe final month of 2025 begins on a negative note after stocks ended November with a startling rally.
-
11 Cities With the Cheapest Groceries in the USIf you live in one of these 11 cities, you're paying less than the rest of the country to keep your fridge stocked.
-
A Financial Adviser's Health Journey Shows How the 'Pink Tax' Costs WomenFact: Women pay significantly more for health care over their lifetimes. But there are some things we can do to protect our health and our financial security.
-
I'm a Cross-Border Financial Adviser: 5 Things I Wish Americans Knew About Taxes Before Moving to PortugalMoving to Portugal might not be the clean financial break you expect due to U.S. tax obligations, foreign investment risks, lower investment yields and more.
-
Giving Tuesday 2025: 'Every Small Act Makes a Major Difference'GivingTuesday encourages generosity in any form, from donating to charity to helping your neighbors.
-
What to Make of a Hot IPO MarketThis year's crop of initial public offerings could be even dicier than usual because of a skew toward tech and crypto.
