Your Financial Goals

Many people don’t decide to start working with a financial advisor until they have a major life
event, such as marriage, children, a new job or retirement plan, or they can’t put off saving for retirement any longer. Then there are those of you who are going to handle your financial
planning on your own. You plan on getting started just as soon as you figure out whether a
regular IRA or a Roth IRA is better, how 529 college savings plans work, and how to shop for life insurance to protect your family- in other words, you’re never going to get to it. A financial advisor can help, and I’ll explain why.

Whatever your reason, there is value in working with a financial planner. Why? Simply put, your human brain isn’t good at doing what’s best for yourself. Your brain evolved in an environment in which humans needed to focus on right here, right now, not putting money aside for later. Just a hundred years ago, in 1900, the life expectancy for a newborn was only 48 years old. There was no need to save for retirement or figure out long-range financial plans. Let’s look at another aspect. You are hungry and I put two plates in front of you. One has a carrot, the other has a
piece of moist chocolate cake. Which one would most people choose? The cake. Which one is better for you? The carrot. Your brain is wired to want to consume now and not worry about the
long-term consequences.

A Financial Advisor keeps your financial plan focused
That fact provides what I consider the single biggest value in working with a financial advisor.
They will help you start what you SHOULD be doing, instead of continuing with what you ARE doing (which might be not much). People spend billions of dollars on diet books, diet foods,
gym memberships and personal trainers to help motivate them to do what they SHOULD be doing with their diet and exercise. People already know how to lose weight- burn more calories than you consume. However, you need a trainer to show you the tools and plan for reaching your goals. Your financial picture is no different. A financial planner can help motivate you to do
what’s right and get your financial plan on track, even if you have the knowledge to do it yourself.

Helping to guide your emotions is important in preventing financial mistakes. In what quarter did individuals put more money into technology-stock mutual funds than any other? The first quarter
of 2000, right before the Nasdaq 100 index (a predominately technology index) fell more than 50%. And when did many of those same people get tired of those aggressive funds and sell? They sold at the bottom in 2003, right before the market turned back up. A good financial advisor will keep your emotions in check and your financial plan focused on long-term goals, not short-term market moves.

The real value is that a financial professional helps you act more like a professional and less
like an amateur. What do Bill Gates, IBM’s pension plan and Harvard’s endowment do with their money? Do you think they are blindly throwing money at the latest stock picks from Money Magazine or CNBC? Of course not. The smartest and largest pools of money on this planet hire the best possible financial professionals they can. Why wouldn’t you?

The Benefit to You
Many people wait until they are in pain before seeing a doctor, or wait until their car is making funny noises before seeing a mechanic. I’d certainly recommend seeing a financial advisor before your financial pain gets bad. They can help you actually reach your financial goals versus not reaching them. Once you actually have a financial plan, it will remove the fear and uncertainty regarding your financial situation. In addition, working with a professional will help alleviate
some of the common mistakes people make on their own. Remember, don’t be an amateur investor and don’t neglect your financial planning! Instead, hire the best financial professional
you can and put together a plan that works for you.