4 reasons I hired a financial advisor to manage my money
4 reasons I hired a financial advisor to manage my money
+ a couple more services financial advisors provide but probably never told you
1. Investing is not a competition, it is a journey.
I’ve learned that most things in life are relative, I don’t care about betting “the market” if the market doesn’t meet my needs financially in the future. Investing on my own I found that I was always seeking the lowest costing portfolio and the “safest” options available. The problem was that those types of investment didn’t always create a better financial picture in the future. I remember checking the conservative box on my Fidelity 401k plan through my corporate job and made next to nothing. I feel like a complete idiot for wasting that opportunity to increase my funds.
2. Get a plan and stick to it.
We plan out everything in our lives, where we go to college, who we date, our social circles, OUR SOCIAL MEDIA PRESENCE. However, stats show that our elders, the “boomers” planned for retirement too late or didn’t plan at all.
Your plan should be based on your goals and expectations of your life in the future, not immediate comfort or commercials and ads you were recently exposed to.
Do you have a plan for your future? How much income you’ll need when you retire each year? Have you done a financial plan, retirement income or cost of living analysis? If not, you’re going through life blindly. No offense. Unless you’re a millionaire you need to know these things. After reviewing my analysis I learned that I’ll need 180K/year to retire but our goal is $8M. If you don’t start now that number can be pretty overwhelming. Most millennials don’t have pension plans or 401k matching plans like our parents did. Most of my friends are entrepreneurs so we have a hefty job ahead of us and without an advisor, things can get messy.
My husband works as a financial advisor. That’s how I learned all of this. The day I came home with a Chanel bag and he literally rolled his eyes at me and said that it cost me roughly $200,000 in retirement blew my mind. That’s when the light switch went off.
The day I came home with a Chanel bag and he literally rolled his eyes at me and said that it cost me roughly $200,000 in retirement blew my mind. That’s when the light switch went off.
3. It’s best to start now.
Have you heard of compounding interest? Compounding interest is interest on top of interest, which means, your money makes money. My dad also taught me the rule of 7. If your interest rate averages 10%, your money will double every 7 years. So start now! I can’t emphasize this enough. I didn’t really get started until my early 30s, because I’m a dumb-dumb and was doing it all wrong. That being said, it’s never too late!
I looked at my life and realized that I pay for literally everything. Not only do we pay for these services but we tip and pay commissions. For example, realtors, servers, bartenders, and even your nail tech. But for some reason society told me I shouldn’t pay a professional to invest my money; why? I asked this question to a half dozen or so financial advisors and the answers were staggering. The two people I went with actually encouraged me to invest on my own where I saw fit (insert fun weed penny stocks I invested in), but to still work through a full financial plan with them before doing so. This led me to reason number 4 while working with an advisor.
4. Seek out advice.
This was the hardest one for me to overcome. All the websites and TV ads telling us that we don’t need a broker and do need to pay fess for advice can be misleading. The advice I hung on to the most- investment plans are meant to be objective focused, not subjective focused.
The biggest thing on this topic is that investing as a DIYer you will begin to invest emotionally, this led me to buy stocks that I liked because of reasons that weren’t financially driven. Even worse, it led me to stick with poor decisions too long because I was unable to reason with myself when it was time for a change. Once I began working with an advisor and set an actual goal-based plan in place, I was able to take losses in stride and review things based on my future benefit and not current pain or euphoria.
Most people don’t invest with just one FA because “they don’t want to put all their eggs in one basket.” Personally, I think that’s dumb. If you trust your FA and the strategy he provided then be all in. Your strategy is what should be diverse so if shit hits the fan you’re protected. Two people, IMO, don’t do that, the person does. So be smart.
What your financial advisor might not have told you
If you’re already working with a financial advisor and you’re paying fees, make sure they’re providing value and not just investing your money. I challenged my wealth manager to find ways to provide value other than portfolio returns and discounts. They recommended accountants and reviewed my insurance policies to make sure that I wasn’t overpaying or under-protected in any way.
