- Do I refinance the house?
- Do I keep my car or get a new one? Lease or buy?
- How do I invest my 401 (k)?
- When can I retire?
- Should I change jobs?
- How do I pay for college?
- How do I transfer wealth to my heirs?
These questions are just a few of the many real life problems you address on a daily basis. If a health issue arises creates a question there is no hesitation to seek medical advice for most. Why is it that financial advice is so rarely sought? More often than not, time will resolve the health issues as the body tends to heal itself from most minor threats. Financial issues left unaddressed do not heal on their own, but tend to linger if not worsen. Why are people reluctant to seek advice?
The answer is complicated. If you think about our educational systems it is likely that you received more training on health than you did on finances. Even so, you are more at ease with the doctor than a financial advisor. Why? I think there are three main reasons.
First, many people are reluctant to admit that they need advice on financial issues. Corrective action often requires admitting that current behavior needs to change. Change is hard. If you have ever tried to lose weight you know that behavioral change is also hard to maintain. Having a professional look at your money issues and recommend changes can be more intimidating than taking your clothes off for the doctor.
Second, it’s complicated. Math is not easy for everyone. Tax rules are enough to cause even the most analytical soul to glaze over. Add the myriad of investment and risk management tools at your disposal and heads begin to spin. Just making it from Monday to Friday is often enough of a challenge, never mind getting from 30 to 66—or beyond.
Third, receiving advice requires trust. How do you know an advisor has your best interest at heart and not his or her next mortgage payment in mind? Like a relationship with a doctor, trust develops as your experience confirms that your advisor understands what is important to you and is actively helping you on your path to realizing your goals.
Now more than ever a good advisor can help you make good decisions, avoid bad decisions and protect you from the most dangerous enemy to your financial future—procrastination. We exist in day tight compartments. Once a day is gone the opportunities that day holds are gone with it. Good choices today mean better options tomorrow.