Why Is Good Advice Hard to Find?
It’s said, “Good advice is beyond all price.” How true that is. Recently, on Hard Knocks, Carl Nassib was shown educating his teammates about compound interest. While his math was spot on, his logic was flawed.
Mr. Nassib insisted that paying 1% in financial advisor fees was unnecessary. Instead, he pointed out that saving with a bank could provide an annual return of 10%.
Now, if you find a LOW RISK, HIGH RETURN investment which pays 10% per annum, take it. But buyer beware. Such returns are rare, especially from savings accounts and certificates of deposit.
Good advice is all about expertise, experience, and wisdom. When it comes to your life and finances, good advice is more valuable than gold.
“Penny wise and pound foolish,” goes the old saying. Today, you have thousands of investments on the market to choose for growing your nest egg. With complex tax laws and long-term planning, good professional financial advice has never been more important.
If you had cancer would you self-treat or would you seek expert medical advice to extend your life? Treat your finances as you would your life. The two are, perhaps, more closely-linked than most of us would like to admit.
Finding Good Advice
Most people prefer not to pay for advice. Either they can’t afford it, they feel it offers poor value, or believe they know as much as the experts. Many make their own decisions or rely on friends, teammates, colleagues or relatives for advice.
Take a moment to consider the intangible costs of not hiring an advisor:
- Education - Are you willing to invest the time to teach yourself about financial affairs and to keep abreast of changing trends?
- Ignorance - Sorting out what you need to learn and what you don’t can be a tough call. If you are inexperienced, how do you know what you need to know? All too often, people learn what they needed to know when it’s far too late.
- Consequences - Can you spot the subtle connections between different aspects of your finances? Could you recognize the potential harm an action in one area might have on another? Poor decisions often lead to serious consequences.
- Mistakes – Making mistakes is often a great way to learn, but can you afford to learn from financial mistakes right now? Some mistakes are more serious than others. Do you have the grit (or the buffer) to bounce back?
- Blind spots - A blind spot is a pattern of behavior everyone else sees except the person exhibiting the behavior. Often, the best responses are counterintuitive. An expert advisor knows how to identify and tackle blind spots.
- Time - There is a reason DIY often ends up more costly than hiring a trained professional to a job quickly and efficiently. Would it be cheaper to pay someone to solve your problems rather than spending your own time on it?
If these intangibles are compensated by the fee, retaining an advisor is recommended. Finding the right advisor will champion your quality of life and boost your income.
Ask yourself the following:
- What specific advice do I need?
Is the advisor trustworthy?
- Does he come personally recommended?
- Has the advisor built a reputation as an all-around performer by learning from his mistakes?
- Can the advisor offer a different perspective from mine?
Ask yourself these questions and you will discover that a good advisor is invaluable. He will always be willing to help you make the best decisions for your circumstances with practical, clear, informed advice.
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