March 13, 2013
Part 3: Can’t I Do This Myself?
Believe it or not, the simple answer is, “You can, but most likely you won’t.”
Emotions – How do you feel about a 10% market downturn? If you have $10,000 in savings, the $1,000 loss stings, but it is not the end of the world in terms of retirement. How about if you have $1,000,000? Now that 10% loss has a value of $100,000! A large loss close to retirement could jar anyone’s emotions. This is a primary area where a financial advisor can provide a world of difference. With experience in financial markets, an advisor can take the emotions out of the financial asset decisions and plot a logical course for their clients.
Emotions are also stoked by a relentless advertisement and journalism barrage created to grab headlines instead of focusing on what is important. The entire financial service industry thrives on your emotions as a way for them to profit. In contrast, a fiduciary (one who always holds the clients’ best interests first) financial advisor can separate the signal through the noise and take the emotions out of financial decision making.
Desire – Saving and investing are traditionally not in the forefront of our minds and often get ignored. A good example of this is that the average person spends more time planning their vacation than planning for retirement! Is this you? By delaying uncomfortable but essential financial conversations, you will only hurt yourself.
Knowledge – Career knowledge is another reason that it is advantageous to hire a financial advisor. Similar to a doctor or lawyer, advisors have spent many years learning and perfecting their craft.
Time – Finally, the most important value that a financial planner can offer a client is time. Time saved from stressing about money; time saved from trying to learn complex financial topics; time that can be used for your family, friends, or hobbies. This concept is no different than hiring a lawn mowing company in the summer to take care of your yard. You can do it, but it takes time and you most likely won’t be as diligent nor enjoy it.