The Chef doesn’t eat his own cooking

— Tony Robbins From “Money: Mastering the Game.” P. 123

We are continually sold and influenced by those who ‘do as I say, not as I do.’ In a sobering 2009 study released by Morningstar, in tracking over 4,300 actively managed mutual funds, it was found that 49% of the managers owned no shares in the fund they manage. That’s right. The chef doesn’t eat his own cooking.

Of the remaining 51%, most own a token amount of their funds when compared with their compensation and total net worth. Remember, these guys earn millions, sometimes tens of millions, for their skills:

  • 2,2126 own no shares in the fund they manage
  • 159 managers had invested between $1 and $10,000 in their own fund
  • 393 managers invested between $10,001 and $50,000
  • 285 managers invested between $50,001 and $100,000
  • 679 managers invested between $100,001 and $500,000
  • 197 managers invested between $500,001 and $999,000
  • 413 managers invested more than $1,000,000

So the obvious question is, if the people who manage the fund aren’t investing in the fund they run, why in the world would I? Good question.”

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