Always Follow the Money.
Once you understand how businesses and people really make money, you will never make the same financial mistakes again.
Dear Jeanie,
I want to share one of the most important lessons I have ever learned. Not from a book or a classroom, but from years of working in business, watching how money actually moves, and making enough mistakes of my own to finally understand what was really going on around me the whole time.
Every business, every salesperson, every financial advisor, every bank, every insurance company, every subscription service, and every person who has ever tried to sell you something has one primary objective. Getting your money out of your wallet and into theirs. That is not cynicism. That is simply how commerce works. And the sooner you truly understand it, the better every financial decision you will ever make from this point forward.
This is not about walking through life suspicious of everyone. It is about being the kind of person who asks the right questions before handing over your money rather than after. Because almost every interaction you have with a business or a salesperson is, underneath everything, a negotiation between their financial interest and yours. And if you do not understand their financial interest going in, you are at a serious disadvantage before the conversation even starts.
So before you buy anything significant, sign anything, or take anyone’s advice about your money, ask yourself one simple question. How does this person or this company make money if I say yes? That one question will protect you more than almost anything else I could ever teach you.
How Service Businesses Make Money From You
Not every service business is transparent about how they make their money. Some are completely straightforward. You pay a fee, they deliver a service, everyone knows what is happening. But many service businesses have revenue models that are more complicated than they look on the surface. And those are the ones worth understanding.
Take subscription services. The whole model is built around one very clever psychological principle. Small monthly charges feel like almost nothing. You barely notice $15 or $20 leaving your account every month. But add several of those up and you could easily be spending hundreds or even thousands of dollars per year on things you barely use. And that is exactly what these companies are counting on. They know that most people set up a subscription, forget about it, and keep paying for it long after they have stopped using it. Canceling feels inconvenient, so people keep putting it off. The business is not just selling you access to a service. It is betting on your forgetfulness. Go through your bank statement right now and look at every recurring charge. You will almost certainly find money leaving your account every month for something you barely remember signing up for.
Then there are professional service providers. Accountants, lawyers, consultants, financial planners, real estate agents, insurance brokers, mortgage brokers. Every one of these professionals has a compensation structure that shapes the advice they give you, whether they are aware of it or not and whether they disclose it or not. Some charge a flat fee or an hourly rate and genuinely have no financial stake in which specific product or provider you choose. But others typically earn commissions or referral fees depending on what you buy and who you use. And that difference matters enormously when you are trying to figure out whether the advice you are receiving is truly in your best interest or primarily in theirs.
Always ask upfront how they get paid. It is a completely fair and reasonable question. And how they respond will tell you a lot.
How Salespeople Really Make Their Money
Most salespeople are paid on commission. That means they earn money when you buy something. And in many cases they earn different amounts depending on which specific thing you buy. So when a salesperson is pushing a particular product really hard, enthusiastically, urgently, trying to close you as quickly as possible, one of the first things worth asking yourself is whether they are pushing it because it is genuinely the best option for you or because it pays them the most.
Think about some common situations. You meet with an insurance agent who keeps returning to one particular policy no matter what questions you ask. A financial advisor recommends a specific investment product with a lot of confidence and urgency. A mortgage broker steers you toward a specific lender without fully explaining why. In every one of those situations, the person across the table from you may have a financial incentive that has nothing to do with what is actually best for you. And without knowing how they are compensated, you simply cannot tell.
I am not saying salespeople are bad people. Many are genuinely trying to help and genuinely believe in what they are selling. But the system they operate in can create a conflict of interest that exists whether they acknowledge it or not. The product that sometimes pays them the most commission is not always the product that serves you best. Those two things are often very different.
So ask the questions most people never think to ask. How are you compensated if I choose this? Do you earn more on this option than on others? Is there something simpler or less expensive that would work just as well for my situation? The right professional will answer those questions honestly and without hesitation. And the answers will tell you a great deal about whose interests are really being served in that room.
How Financial Advisors Really Make Their Money
I want to spend a little more time on this one because the financial services world can be one of the most confusing and sometimes misleading environments you will ever navigate. And the stakes are too high to go in unprepared.
When a financial advisor recommends a product to you, the most important question you can ask is how are you compensated if I buy this. Not what does this product do or what kind of returns can I expect. How do you make money if I say yes. Because the answer to that question is the most important context you need to evaluate everything else they tell you.
Many financial advisors typically earn commissions on certain products they sell. When they recommend certain insurance policies, certain investment products, or other financial instruments, they can sometimes receive a payment from the company whose product you are buying. That payment often comes directly or indirectly from your money. And it is not always disclosed clearly or prominently in the conversation. That kind of commission structure can create a significant incentive to recommend certain products regardless of whether they are genuinely the best fit for your specific situation.
Beyond commissions, many advisors also charge an ongoing fee based on a percentage of the money you have invested with them, sometimes referred to as an assets under management fee, typically somewhere around 1% to 2% per year. That might not sound like much in the moment. But on a significant investment account over many years that fee can quietly compound into a very large amount of money coming directly out of your returns. Always ask what the total cost will look like over time, not just what the annual percentage sounds like today.
The Financial Products That Can Benefit the Seller More Than You
Let me walk you through some specific financial products that tend to be sold aggressively, tend to carry significant commissions, and tend to be more complicated and more expensive than most people realize when they are sitting in the sales conversation. I am not saying these products are never right for anyone. I am saying that in many cases there are simpler and less expensive alternatives that serve most people better, and the reason these particular products get recommended so often has a lot to do with how well they compensate the people selling them.
Universal Life Insurance
Universal life insurance is one of the most heavily sold and most commonly misunderstood insurance products out there. It is typically presented as having two components. A death benefit that goes to your family when you die and a cash value investment component that grows over time as you pay your premiums. The way it is often described in a sales conversation can create the impression that your family receives both the death benefit and the accumulated cash value when you pass away.
In most standard universal life policies that is typically not what happens. In many of these policies your beneficiaries generally receive only the face amount of the death benefit. The cash value that you spent years building often stays with the insurance company. Your family may never see it. This is one of the most significant features of this product and it is one that does not always get explained clearly upfront.
My honest recommendation is to seriously consider term life insurance instead. Term life is straightforward. You pay a fixed premium for a set period of time and if you die during that period your family receives the full death benefit. No retained cash value. No unnecessary complexity. Take the money you save on lower premiums and invest it separately in a simple low cost index fund. That approach often works out significantly better for the people you are trying to protect. And it is worth knowing that the commission on a term life policy is typically a fraction of the commission on a universal life policy, which is a meaningful part of why universal life tends to get recommended so often.
Annuities
An annuity is essentially a contract where you give a lump sum of money to an insurance company and they promise to pay you a regular income stream either immediately or at some point in the future. For some people in very specific situations that arrangement can make genuine sense. But the way annuities are sometimes sold and the compensation involved is worth understanding before you ever find yourself in that conversation.
The commission on annuity sales can typically range from around 5% to 8% of the total amount invested depending on the type of product, paid to the advisor at the time of the sale. On a large sum of money that can represent a very significant payment to the person recommending it, which can create a real incentive to recommend the product regardless of whether it is the right fit for your situation.
Annuities also often come with surrender charges, which are financial penalties you pay if you want to access your money before a certain number of years have passed. Surrender periods can sometimes run for five to ten years or more. That means once your money goes in, getting it back out early can typically cost you. And some annuities carry ongoing internal fees that can add up to 2% to 3% or more per year depending on the specific product. A simple fixed annuity might genuinely make sense for someone who needs guaranteed income and has carefully considered their options with an independent advisor. But annuities are rarely the right starting point for most people, and they are typically far more financially rewarding for the seller than the sales conversation suggests.
Actively Managed Mutual Funds
An actively managed mutual fund is one where a professional fund manager is being paid to pick the stocks or bonds inside the fund with the goal of outperforming the broader market. The idea sounds appealing. You are paying an expert to make smart decisions with your money on your behalf.
The reality, based on decades of independent research, is that the vast majority of actively managed funds tend to underperform simple low cost index funds over the long run after fees are taken into account. According to the SPIVA Scorecard, which is one of the most widely cited independent measures of active versus passive fund performance, 79% of active large cap U.S. equity funds underperformed the S&P 500 in 2025. And over the last 20 years approximately 92% of actively managed domestic funds underperformed their benchmark index after fees.
Actively managed funds typically charge significantly higher annual fees than index funds, often somewhere between 0.5% and 1.5% per year or more, compared to index funds that can sometimes charge as little as 0.03% to 0.10% per year. That fee difference compounds significantly over time. And in many cases advisors have historically tended to favor actively managed funds in part because these funds sometimes pay distribution fees to the brokers and advisors who sell them. The result is that you can end up paying more, typically getting less over the long run, and the person recommending it is often better compensated for that recommendation than they would be for pointing you toward the simpler and typically better-performing alternative.
Indexed Universal Life Insurance
Indexed universal life insurance, sometimes called IUL, is a variation of universal life insurance that has become one of the more aggressively marketed financial products in recent years. It is often presented as combining the protection of life insurance with investment growth linked to the stock market and a floor that limits your downside. That combination sounds genuinely attractive. For most people in most situations it tends to be significantly more complicated and significantly more expensive than it sounds in the initial conversation.
The growth in these policies is typically linked to a market index but subject to caps, participation rates, and various charges that can limit how much of the actual market gains you receive. The fees inside these products, which can sometimes include cost of insurance charges, administrative fees, and various optional rider fees, can in some cases eat meaningfully into the cash value growth over time.
The commissions on IUL products tend to be on the higher end of financial product compensation. My honest recommendation is the same as it is for standard universal life. If you need life insurance, term life is simpler and typically less expensive. If you want investment growth, a low cost index fund is a more straightforward way to pursue it. Combining both inside a single complex product often tends to serve the seller better than the buyer.
Non-Traded REITs
A REIT is a real estate investment trust, a company that owns and manages income-producing real estate. You can buy publicly traded REITs through any brokerage account just like a stock, and they can be a reasonable way to add real estate exposure to a diversified portfolio. But there is a separate category called non-traded REITs that are sold directly by financial advisors rather than through a public exchange, and these deserve much more careful consideration before you ever get involved with them.
According to the SEC, sales commissions and upfront fees for non-traded REITs typically total approximately 9% to 10% of your total investment, with some products charging even more. That means a significant portion of your money can go toward fees before a single dollar is actually invested on your behalf. Non-traded REITs are also typically illiquid, meaning your money can be locked up for years with limited ability to access it if your circumstances change. And because they do not trade on a public exchange, it can be genuinely difficult to know what they are actually worth at any given point in time.
If real estate exposure makes sense for your portfolio, publicly traded REITs available through a standard brokerage account tend to be a far more transparent, far more accessible, and typically far more investor-friendly way to get it.
What All of These Products Have in Common
Here is what I want you to see when you look at all of these examples together. They tend to share some important characteristics. They are often more complex than they need to be. They typically generate significant commissions or fees for the people selling them. There are almost always simpler and less expensive alternatives that can serve most people just as well or better. And in many cases they are not what a truly independent advisor with no financial stake in the outcome would typically recommend first.
The alternative to most of them is the same straightforward approach. Term life insurance if you need protection. Low cost index funds for building wealth over time. Taking full advantage of your employer’s 401k match. Contributing to a Roth IRA regularly if you qualify. Being patient and consistent. That approach earns no commissions for anyone. Which is a significant part of why you will rarely hear it recommended enthusiastically by someone who makes their living selling financial products.
Decoding the Language of Financial Services
One more thing worth understanding is the language itself. The financial services world has developed a very specific vocabulary that can sound reassuring and trustworthy without always being completely clear about what is actually happening underneath it.
Fiduciary sounds like it means someone is completely and legally required to always put your interests first no matter what. In practice not every advisor who uses this word necessarily operates under that standard in every situation and for every product they recommend. If someone describes themselves as a fiduciary, it is always worth asking whether that applies one hundred percent of the time for every single recommendation they make. The answer matters.
Fee-based and fee-only sound almost identical but can mean very different things. Fee-only typically means the advisor charges you directly and earns no commissions from any product they recommend. Fee-based can sometimes mean the advisor charges fees but may also earn commissions on certain products. That is a meaningful difference that is easy to miss because the terms sound so similar.
Independent advisor can sound like it means the advisor shops the entire marketplace to find you the absolute best option available. In practice some advisors who use this term work within systems that give them access to a specific set of products from companies their firm has existing relationships with. Always ask specifically which companies they work with and why those specifically.
Most People Do Not Actually Need a Financial Advisor
Here is something I want to be honest with you about. Most people with relatively straightforward financial lives do not actually need a professional financial advisor. A truly independent fee-only advisor can provide real value for people with genuinely complex situations. Significant assets, complicated tax needs, business interests, or estate planning that requires real expertise. For those people a good advisor is absolutely worth it.
But for most people who are building their financial lives from the ground up, the strategy is genuinely not that complicated. Put money consistently into low cost broad market index funds through a reputable platform like Vanguard, Fidelity, or Schwab. Take full advantage of your employer’s 401k match. Open and contribute to a Roth IRA regularly if you qualify. Be patient and leave it alone.
According to the SPIVA data that independent researchers have tracked for over two decades, that simple approach has tended to outperform the vast majority of actively managed strategies over the long run after all fees are accounted for. Warren Buffett, one of the most successful investors in history, has publicly recommended exactly this approach for ordinary investors many times. The fact that nobody earning commissions tends to recommend it enthusiastically tells you something important about whose interests the financial services industry is ultimately designed to serve.
How Social Media Influencers Really Make Their Money
There is one more category I want to talk about because I think it is one of the least understood forms of commercial influence in your life right now. Social media influencers and content creators.
Every influencer you follow, no matter how relatable, how genuine, or how helpful their content feels, is running a business. And like every business their primary goal is generating revenue. What makes influencer marketing so different from traditional advertising is that it does not feel like advertising. It feels like a trusted friend giving you a genuine recommendation. That is exactly what makes it so effective and exactly why you need to understand how it actually works.
Here is the basic model. An influencer builds an audience by consistently creating content that people find useful, entertaining, or genuinely relatable. As that audience grows it becomes increasingly valuable because companies will pay significant money to reach it. The influencer monetizes that audience through brand partnerships, through affiliate links where they earn a commission on every sale made through their unique code or link, through sponsored content that is sometimes clearly labeled and sometimes woven so naturally into regular content that most people never recognize it as paid promotion, and through their own products and services.
That last part is where the real money often is. After spending months or years building your trust with free content, the offer eventually appears. A course. A coaching program. A community membership. A book. A paid newsletter. This is typically the destination the entire content-building process was working toward from the beginning. The free content built the relationship. The relationship created the trust. The trust is what ultimately gets monetized.
Financial influencers deserve particular attention because they are offering guidance about your money. Many of them are articulate, confident, and genuinely knowledgeable. But very few have formal financial credentials, professional certifications, or any regulatory oversight. They are content creators first. When they offer you a financial course, an investment program, or a wealth building system, they are selling you a product. They are not providing regulated financial advice and they have no legal responsibility for what happens to your money if you follow their guidance.
That does not mean everything they share is wrong or without value. Some of it is genuinely useful. But approach every influencer with the same question you apply to everyone else who is seeking your money. How do they make their money? What are they ultimately selling? And is what they are offering genuinely in your interest or primarily in theirs?
The One Habit That Protects You From All of It
Every service business wants your money. Every salesperson is compensated to move it in their direction. Every financial advisor has a compensation structure that shapes what they recommend whether they acknowledge it or not. Every influencer is building toward a commercial offer. That is simply the reality of the world you are navigating.
But none of that needs to overwhelm you. It just requires one simple and consistent habit. Before you buy anything significant, sign anything, or trust anyone with your money, ask yourself one question. How does this person or company make money if I do what they are suggesting?
If the financial advisor typically earns more on one product than another, that context matters when you are evaluating their recommendation. If the influencer earns an affiliate commission when you use their code, that context matters when you are evaluating their endorsement. If the subscription is easy to start and deliberately hard to cancel, that tells you something about the business model. If someone is pushing a particular option very hard and very urgently, ask yourself whose interest that urgency is really serving.
Follow the money, Jeanie. Always. In every service you consider, every contract you are asked to sign, every financial recommendation you receive, and every voice on social media you choose to trust. Ask who benefits. Ask what the incentive is. Ask what the person seeking your business gets if you say yes.
Then make your decision from a place of real information rather than manufactured trust.
That one habit will protect you more reliably and more consistently than almost anything else I could ever teach you.
Love, Dad.