Growing up as an only child, I liked telling myself that I could figure things out on my own. Older siblings give you an opportunity to learn from their mistakes and successes. Younger siblings provide a way to learn patience and how to be a proper role model. I can’t speak for those of you who have brothers and sisters, but I can only imagine all the life lessons you learned the hard way when it came to being one. As an only child, I had to learn all these important aspects differently than most and I’m still working on a lot of them today.
One of the biggest concepts I’ve always struggled with is that it’s ok to lean on others for support, knowledge, and help. Sometimes another person’s strengths and life experience can enhance the areas in your life where you fall short. Or maybe…it could make your life a little simpler. Stay with me, I’m headed somewhere with this.
Economic Specialization is a method of production where a business, area or economy focuses on the production of a limited scope of products or services to gain greater degrees of productive efficiency within an overall system. This strategy of efficiency allows our country, our company, and even our families to operate, but not without a level of trust in those around us.
A doctor’s job is to diagnose and treat illnesses using years of education and experience that have focused on doing just that. If that doctor is focused on being an electrician, a pilot, and a financial adviser all at the same time, he might not be able to be the best doctor he can be. Maybe he or she does have some experience managing their own money, but how much more success could they have in their lives and in their portfolio if they allowed someone else, who has committed their lives to portfolio management and growing wealth, to do it for them?
I want to be clear about something. I’m NOT saying that you can’t manage your own money, but if you want to have a chance at being successful doing so, you need to ask yourself two questions:
- Do I absolutely enjoy doing it?
- Will I spend the required amount of time on it?
We have found that if you don’t love managing your own money, then you won’t spend enough time on it, and you won’t like the results.
Let’s pretend that it’s my first day on the job at a financial firm, but I have no education in finance, so I was hired for an administrative role. That day I decide to take a chance and go to the wealthiest man in town to ask to manage his retirement account. If I walk up to him and say “Hey, this is my first day on the job, I’m not licensed yet, and I don’t have any experience, but I believe you should let me manage your entire investment account,” what do you think his response would be?
“No” is probably my best guess. Well, to a degree, this is what you’re doing if your trying to manage your own account without the proper education, licensing, and daily commitment.
There are a lot of people out there who know their portfolio would be in better hands if they allowed a professional to manage it, but they struggle with the idea of paying a fee. Picture yourself arriving in a huge city where you’ve never been before. You’re there by yourself, with no guidance, and traveling in unfamiliar territory. You could save some money if you use the public transportation as long as you keep your eyes locked on a map (or your iPhone’s map app). Hopefully, you hold your wallet and belongings tightly, so nothing is stolen or lost. Eventually, with the right kind of luck and a bit of persistence, you might end up somewhere near your destination.
The alternative would be to get a taxi, pay a little bit of money, sit back, relax, and end up precisely where you intended to arrive. So the moral of the story? Maybe paying a small percentage to a professional who makes it their life mission to help people meet their financial goals, and retire on time, is worth it.
With all of that said, it comes down to trust. The trust that your financial adviser and/or firm understands your struggles, goals, and dreams. The trust that he or she will honor their fiduciary responsibility to always do what’s best for you. Most importantly – the trust in yourself to fully understand that it’s ok to stop saying “I can do it myself” and instead to consider the possibility that maybe “I don’t need to do it myself.” I can use my work ethic and due diligence to interview a few advisers and find someone with whom I can trust so that I can instead focus my time on making and saving money, rather than trying to do it all.
If you know someone who would like to receive invitations to our events, market commentary like the one you just read, our podcasts, screencasts, and educational articles, please feel free to direct them to our website at www.LibertasWealth.com, scroll to the bottom of the page, and click on the “Subscribe Now – For Free!” button.
If you have any questions regarding portfolio management or financial planning, please contact us so that we can confidentially discuss you or your company’s situation further. Remember, you don’t have to be a client to ask a question!
Till next time…