Negotiating Your Investments: Use Proven Negotiation Methods to Enrich Your Financial Life

Negotiating Your Investments: Use Proven Negotiation Methods to Enrich Your Financial Life

Steven G. Blum

Language: English

Pages: 288

ISBN: 1118583078

Format: PDF / Kindle (mobi) / ePub

Negotiating Your Investments: Use Proven Negotiation Methods to Enrich Your Financial Life

Steven G. Blum

Language: English

Pages: 288

ISBN: 1118583078

Format: PDF / Kindle (mobi) / ePub


Get smart about personal finance with the art and science of negotiation

Negotiating Your Investments is an in-depth guide to applying the principles of negotiation to your personal finances. With expert insight into the before, during, and after of a successful negotiation, you'll learn how to prepare for and conduct important financial discussions with an eye toward getting the best possible outcome. The book contains practical, actionable guidance toward pursuing what you really want, and tools that can greatly improve your chances of getting it. Clear, concrete advice describes how to influence the other side, avoid being taken advantage of, and direct the conversation to your advantage.

As a rule, investors fail to negotiate over financial matters, to their great detriment. Improving returns, or reducing fees, by a mere 1 percent per year can make a remarkable difference in your bottom line. For example, a million dollar investment that returns 7.5 percent rather than 6.5 percent, over 30 years, will put an extra $2.1 million dollars in your pocket. On the other hand, that much money could easily go straight into someone else's purse. With that much money at stake, good negotiating practices become extremely valuable. Negotiating Your Investments provides the skills and tools you need to hold your own at the negotiating table while offering advice you can put to work immediately. Topics include:

  • The elements of negotiation – identifying goals, interests, commitments, alternatives, and power
  • Preparation, information exchange, bargaining, and closing and commitment – the four phases of negotiation
  • Asymmetric information, conflicts of interest, professionalism, and whom to trust
  • Investment vehicles and the economic science that lies behind wise investing
  • Hard economic truths involving past results, rational market pricing, diversification, interest rates, and the effect of costs on investment returns

While the focus is on personal finance, the book also includes techniques, analysis, and examples drawn from award winning negotiation courses. It explores the basic theoretical models of bargaining in depth. With Negotiating Your Investments, you'll gain the skills and confidence you need to be smarter, and get better outcomes, in both your financial affairs and the many other negotiations you conduct every day.

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commitments or a planned chain of agreements can build confidence and help lead to a larger agreement. Note 1. Roger Fisher, William Ury, and Bruce Patton, Getting to Yes: Negotiating Agreement Without Giving In, 3rd ed. (New York: Penguin Group, 2011), 62. c05.indd 47 21-03-2014 16:41:21 c05.indd 48 21-03-2014 16:41:21 6 c h a p t e r Best Alternative: Where Your Power Comes From I n negotiation, power comes from alternatives. One of the first things a skilled practitioner explores

Berkshire had paid. As for the warrants, they were valuable enough that in March 2013 Goldman agreed to buy them back for $1.4 billion in Goldman Sachs stock. All told, Berkshire made a $3.2 billion of profit on their 4.5-year-old investment in Goldman for a return of 64 percent. It was a magnificent integrative deal because both sides got what they valued most. Goldman got an infusion of cash at the moment of their greatest danger from the most admired—and deepest pocketed—investor in the United

74 Negotiating Your Investments For example, a client of mine was getting married and needed floral arrangements. Her florist had a wonderful aesthetic sense, but her work was quite costly, and the planned reception was large. My client knew that carnations were in season and tended to be less expensive. In fact, she was very fond of carnations. Her proposal to the florist was “If you would be able to make more bouquets within our budget, then we’d consider replacing some of the more

financial transactions. Let me offer a few: • • • • • • • • Choosing to work with a brokerage or investment firm Selecting an independent investment advisor Buying a mutual fund Looking at homes with a real estate broker Buying a bond that is callable by the issuer Choosing a type of checking account offered by the local bank Selecting a credit card and then using it Deciding on an insurance broker and then buying life insurance through her from a given underwriter Even buying a book

to motivate behavior. 4. Winning The financial services industry tends to draw some very competitive people. Many of the men and woman in this field are naturally inclined to see their work as a kind of game. Such folks are determined to win. When dealing with such a competitor, it is helpful to learn what they understand winning to be. Then you can exchange your help with it for the fulfillment of some of the things you need. 5. Making Money Over the years, I have often said that not many

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