Do you have an investment zombie eating up your profits? Locating a zombie in your investment profile is a challenge. Most of the time investment zombies are not clear where they are located. Do you know what an investment zombie is or how to locate them?
Investment Zombies are Expenses that rob you of your Profits
In real estate investment zombies are cost that management companies might charge you for services that are double the market rate. For example, once I was charged overtime by a management firm for repairs on an apartment that wasn’t an emergency. They didn’t get authorization from me and never posted the cost until I saw it in my statements.
I challenged the cost. When they told me that the employee was in the area and it would only take him a few hours, I advised them I was not willing to pay for any overtime on work that was not authorized by me and this should have been billed as a standard hour billing rate.
Another incident occurred when the same management firm began charging more for supplies than the marketplace. This firm replaced a basement door in our rental unit. They built the door out of plywood. Placed a hinge on the sides and placed a padlock on it with no handles and charged us $1000. The hidden zombie cost was buried in labor.
After investigation of their zombie billing rates, we fired the company. We had to replace the $1000 door with a real door. We went to a Habitat Rebuilt Stores purchased a solid wooden door for $25. My wife and I replaced the door in less than two hours.
Investment zombies sneak into your equity portfolios. The obvious expense in your stock, bonds, ETF (Exchange Trade Funds) portfolios is your broker. If a broker is not completely honest with you over his fees find another broker. What has made Scottrade, www.scottrade.com so attractive to me is that I can invest in the market for less than $8 per trade no matter what the amount. Though I have an investment advisor, I am questioning investment moves they recommended that required additional brokerage cost.
Zombie investment can be your lackluster performing stock. Over the years I have had General Motors and General Electric stocks which had failed to meet the marketplace returns. Because of the longevity of these corporations and their past performances, I didn’t play attention when they dipped into negative numbers. They ate up my profits before I sold my position I had lost several thousand dollars.
Zombie investments are the walking dead cost in your investment life. Identify them immediately and cut them off at the head.