If you have ever invested, or thought about investing, chances are at some point you’ve asked yourself, “Do I need a financial advisor?”. Spoiler alert: I get paid for financial advice. It’s how I put food on my family’s table. But before you write this off as merely justifying my paycheck, hear me out.
Sometimes I like to look back at the beginning of my career. I had just passed a bunch of tests and earned the licenses required to do my job. Upon completion, my employer essentially turned me loose. “Go advise” they said. “You’re an advisor now.” I was paralyzed. At that point, I’d done a great deal of book learnin’ but had no real experience. In a nutshell, I didn’t even know what I didn’t know yet. How could they just let me handle other people’s money?! It honestly seemed a bit irresponsible to me. On top of that, I met a lot of potential clients who seemed to really know their stuff. So I was afraid of looking stupid too. Quite frankly, I was intimidated.
For a month or so I worked in a catatonic state, terrified of screwing up. Eventually, I pulled myself out of the muck and mire with the help of a mentor at the time. He told me, “Hey, you know your stuff, you passed the tests. You know more than 90% of the population. Now go get your teeth kicked in, it’s good for you!” When it comes to your profession, whether you are a contractor, doctor, rocket scientist; the fact is by default you probably know more than 90% of the population. The point is that we are all really good at one thing or another. But it takes a lot of time and knowledge to become an expert.
As a young homeowner with limited financial resources, I remember taking on projects around the house. From plumbing to electrical, plaster, and drywall repair, the list goes on and on. I saved a lot of money by doing the work myself. And you could tell. I would tear into something and find more problems hiding beneath the surface. More often, in my inexperience, I ended up creating new problems that would need fixing. The truth is, I spent a lot of time going back and fixing what I already “fixed”. In retrospect, I would have saved time and money had I paid a professional to do it in the first place (never mind that I couldn’t pay a professional at that time). By not hiring an expert, I effectively hired myself as a general contractor. But I never wanted to be a contractor when I bought my house. I wasn’t good at it. You get the point.
We live in the information age. There are countless resources available on just about any topic you can think of. Books, magazines, blogs, podcasts, TV and radio programs, some good, some not so good. Regardless, none of them are tailored to your unique situation. How could they be? If you’re like me, making sense of it all leads to a condition I call “paralysis by analysis.” After all, you probably don’t even know what you don’t know yet.
So, bringing it back to financial planning, could you do it on your own? Probably. Will you spend more time and money fixing what you’ve already “fixed”? Probably. When choosing to go it alone, you effectively hire yourself as your own financial advisor. I would bet that most of you don’t want to be one in your spare time. You almost certainly won’t want to when you retire. Heck, I’m not even sure I will!