Friday, March 23, 2007

Introduction to the Armchair Fiduciary

fi·du·ci·ar·y /fɪˈduʃiˌɛri, -ˈdyu-/

Law. a person to whom property or power is entrusted for the benefit of another. –adjective Unabridged (v 1.1)Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.

Welcome to the Armchair Fiduciary. In simple terms a fiduciary is an individual that represents the interest of someone else, a beneficiary, in matters of business. He (or she) basically has a legal duty to always do what is best for the beneficiary's interests without profiting from it (unless the beneficiary approves it) and while avoiding conflicts of interest in the process. Unfortunately, unless you have a trust fund which pays all your bills, you probably don't have a fiduciary for your personal finances. When it comes to figuring out how best to navigate the ever tumultuous waters of credit cards, mortgages, insurance, 401ks, etc. most of us are in a lifeboat by ourselves. With this blog, I hope to change that one post at a time and to help you navigate safely towards your financial goals (or at least throw you an oar so you can stop paddling with your hands).

I basically plan to do two things on this site. First, I will share with you how I manage my own finances and pass on as many "good deals" as I can find. Second, I will respond to your comments and/or emails and tell you what I would do if I were in your situation. Why, you might ask, are you doing this? There are several reasons. First, I pick stocks for a living so while I can have a direct impact on our investors wealth, I rarely get to pass on what I know about broader financial issues to them. The Armchair Fiduciary is my chance to be an educator which seems like a great thing to do. Second, I hope I will learn from my readers' experience and comments. I will definitely learn from your questions as I am sure I will need to do plenty of research to answer some of them. Third, I feel like my writing skills are starting to get a little rusty and this blog will force me to keep them sharp and hopefully improve them significantly over time. Finally, if this blog is wildly successful I have every intention of leveraging Google's AdSense platform to generate some extra income. I'm not holding my breath for this one, but if I am going to be your armchair fiduciary there had better be full disclosure from the beginning.

So why on earth are you qualified to be a fiduciary you might ask? The short answer is I'm not. I am not a financial planner nor do I offer professional financial advice for a living. Hence the "armchair" moniker is fully appropriate and it should be duly noted that all advice given here is merely the opinion of the author. However, I have always loved all things finance. I received my first share of stock (Walt Disney) as a gift when I was 12 years old. It was fantastically cool to think that my one share represented part of the company. Maybe it was some executive's desk, or some illustrator's colored pencil set, or as I imagined when I was a 12, maybe I owned a trash can at Disney World! The whole thing fascinated me and from that time I was hooked. This finance thing was for me! So I spent a lot of time reading about stocks and mutual funds and all things financial. I then marched off to an Ivy League school and studied economics. From there I went on to work for a large mutual fund as an equity analyst and now I work at a hedge fund. Along the way I earned my Chartered Financial Analyst (CFA) designation. I am still a young lad in my late 20s, but personal finance is one of my passions and I would be honored if you would let me share it with you. So sit back, relax, and get ready for the Armchair Fiduciary!

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