Products change. Pitches change. The questions do not. The whole book is built around five of them, and you can use them today on anything a bank, an insurer or an adviser puts in front of you.
The five questions
- Time. How long does this last, and what happens to the cost the longer it runs?
- Cost. What does it really cost, all in, beyond the headline number?
- Risk. What could go wrong, and who is left holding it if it does?
- Incentives. Who gains if I say yes, and how are they paid?
- Alternatives. What else could I do with this money, including nothing?
Why these five
Between them they cover the ways a financial decision goes wrong. A product can be cheap but long. It can look low-risk while the risk sits with you. It can be recommended by someone paid more if you say yes. And almost every offer is judged on its own, never against doing something else.
A two-minute example
You are offered an extended warranty at the till. Time: how many years, and does the fee repeat? Cost: what is the full price, and what is excluded? Risk: what is the chance I will need it, and could I absorb the repair? Incentives: how much commission does the seller earn? Alternatives: what if I save the fee in a repairs jar?
Many decisions are settled by the fourth question alone.
Make it a habit
Pick a product type in the Ask Before You Sign generator to build a printable card of the questions to take to a bank, insurer or adviser. Chapter 15 of the book shows how to evaluate any financial product with this framework.
General education, not personal advice.
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Want the checklists that go with this? Checklists, questions and worksheets inspired by the book, for the next time money is on the table. Part of the Reader’s Letter: a few times a year, never more.
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General information and education only, not personal financial, tax, legal or investment advice. Figures are illustrative and use simplified assumptions.