Never forget these two axioms:
Money frees us, but its pursuit may enslave us.
It’s not how much you have at the end; it’s how much you could have made.
Financial Advisors: Overrated or Underused? Part I
You know yourself and that’s what is best in guiding you in your decision on whether to engage a financial advisor or not..
Can you truly do the due diligence you need to to maintain your investment portfolio? Are you confident enough in your plan to stay the course in a market downturn and not panic selling everything in sight? How about your spouse? Will they weather the storm as well as you? Do you have a way to ensure that you will consistently invest? Do you know how you will do it (eg, from your bank account to your investment account or directly into different stocks and funds every so often—weekly?, biweekly?, monthly?) and which investing platform (Vanguard, Fidelity, Ameritrade, or something else)? Will you look at your monthly or even quarterly statements, make sense of them, and then adjust or act accordingly?
If you can truly do all of the above realistically in your heart of hearts and not just because you want to or think you can, then by all means go for it.
Otherwise, a financial advisor is your best bet to financial independence and peace of mind.
But like all goods and services, make sure you know what you’re getting in exchange for the money you’re handing over to your financial advisor.
First, how to find a financial advisor.
Obviously, you can just seek one out on the Internet and rely on the vagaries of Internet search engines, marketing, and (largely) anonymous reviews. Then, meet him or her and go from there.
The second and often most common way to find an advisor is to ask trusted friends and colleagues. If you’re close enough to them, they should be able to be honest with you regarding how happy they are with their advisor. And, if you’re really close to them, they’ll just tell you how their returns are from year to year and how much they are charged. (If they don’t know the answers to any of these questions, then they definitely aren’t the ones you should take your financial advice from. In fact, send them to this blog, www.wealththyself.com, and teach them yourself what they don’t know.)
As a side note, I cannot understand why more close friends are so reluctant to talk about money and learn from one another, even—or especially—from their mistakes. It’s one of the main reasons why so many of us physicians struggle with our finances until mid-career—if you’re lucky it’s only that long. God knows that medical school and residency or fellowship taught you precisely zero in how to take care of your money, invest, and/or grow your hard earned money after nearly a decade (or longer) of education and training. All the professors and attendings tell you that it’s a calling and a noble privilege and not a job, but a way of life (all tur in one sense or another), but no one mentions let alone teaches you what to do with the money you’re finally earning especially in the only profession I know of where you go from one salary to five times (or greater) that amount for doing the exact same thing as the prior year.
ANYWAY…
Let’s delve into details on what to think about when you’re thinking about selecting and then hiring (and that is exactly what it is and what you should be thinking of it as) your financial advisor.
But let’s do it next time…
I’d love to hear from any and all of you about your thoughts, so we can all learn from one another.
Please spread the word about this blog to your friends (real and virtual), family, and colleagues. Talk to you soon.
Until next time…