This episode concludes my three-part series on why I hired a real financial advisor. Even though I’m an advisor, I’m also human. Being human means I’m still open to making emotional decisions. So to avoid making the big mistakes of buying high or selling low, I can benefit from having someone stand between me and doing something stupid.
In part two of my series on why I hired an advisor, I reflect on the need to have someone remind me of my goals and the reasons why I said these things were important to me. Specifically, I wanted someone who would be there during those moments when I’d be tempted to throw aside my plan and my goals for something new to say, “Wait just a minute. Has what you valued most changed or is this something else?”
I want to talk to you about scary markets. For the sake of this particular subject, I want to be blunt and a little bit in your face. So for the next few minutes, please, just think of me less as your friend and more as your Scary Markets Drill Sergeant. O.K.? Great.
If you’re a real financial advisor why could you possibly need your own advisor? Today’s show is the first in a three-part series on why I believe it’s so valuable to hire a financial advisor. Because here’s the reality, very few people will enter your office knowing the real value that they’ll receive from working with you.
When we talk about money, it’s really easy to slip into talking about “goals.” But that word can carry a lot of different emotions for people. What happens if we start talking in terms of where people want to go vs setting goals?
In life, there are certain nonnegotiables we simply must have. Think food, water and shelter for starters. Nobody will ask, “Is it worth it to eat?” It’s just something you do to stay alive. But deciding what to eat? That’s a different question. Will I eat the bologna or prosciutto? Drink tap water or bottled? And anything discretionary — anything that has even the slightest element of choice in it — invariably deals with a question we find ourselves asking all the time. “Is it worth it?”
As a real financial advisor, when you say risk, it probably doesn’t mean the same thing to your client as it does to you. We need to be clear that when we’re having the risk conversation with clients we’re talking about the same thing, which for most people, boils down to irreducible uncertainty. Part of our job is to help people make the best money decisions they can in the face of this irreducible uncertainty.
Earlier this week, my column at the Times about experience over security has generated a lot of interesting conversation. Today, I want to explore what we really mean when we say security. For instance, if our sense of security comes from money, no amount of money will make you feel secure. What makes you feel secure?
You probably know the refrains by now: Experiences trump stuff. Experiences tend to bring us happiness. More stuff tends to breed discontent. There’s a wealth of research to back up these ideas up. But the idea that you can leave a stable job, a 401(k), sell your house, retrofit your van and spend a couple of years living out of it by yourself, or with your spouse, or even with your kids, is something completely different. Not only is it different, it’s mind-blowing. This mind-blowing concept is not the choice of experience over stuff. It’s not even experience over stability. It’s experience over security. And that is a very fascinating development in our culture.
Last week, I touched on a the idea of being how much we save mattering more than how much we earn and whether we feel “rich.” Today, I want to dive into the idea of what it means to be “rich” because that definition is so personal. After all, it’s really difficult to measure units of happiness, and in a way, our level of happiness drives, in large part, whether we feel “rich.”