Know yourself: Deciding whether or not you need help with your financial planning.

​“So what do you do?” the cardio surgeon asked.  It’s an innocent enough question, but it turned out to be loaded with philosophical importance.  

His eyes lit up when I said financial planner.

​“Wow” he said, “I love share investing. I never miss the Sky Market Update”

He had a young family, and I’d say he was in his late 30’s. He was dedicated, busy as well – too many patients and not enough time.

What made our brief discussion memorable was my surprise that the doctor would spend what little discretionary time he had on learning about and playing the stock market, but also that he was obviously neglecting his health, of all things, to do it.  He was overweight, especially for a younger guy. He admitted to me he was very unfit.

Here was a fellow who no doubt understood the implications of obesity on physical health, longevity, and therefore on his young family, but he was choosing to invest his time and attention on the share market.  He may even have justified it to himself as something he did for his family.  Yet if we’d had the chance to ask why he didn’t make his health and exercise a hobby – something that would more directly benefit his family in the long run – he would probably have said that he has no time for exercise. 

The obvious question is why he has the time to manage his money and no time for his health.  Why not delegate what he can, and spend time on what is important?  No one else can do his exercise for him.  No one else can spend time with his kids for him. 

So, if you want to manage your own financial plan, just be sure not to sacrifice what’s important in the long run.

​Do you really need a financial adviser? That depends on whom you ask.

Most of the nation's roughly 16,000 financial advisers will tell you you're better off using their services. Do-it-yourselfers, meanwhile, shun hired advice as a waste of time and, yes, money.

Well, if you don’t want to work with anyone and believe you’d be better off on your own, here are some questions you should ask yourself?

Do You Have The Time?
There are only 168 hours in a week, no matter your age, how much money you make, what you’ve invested in, how attractive you are, or how much information you can access on the Internet. No exemptions. Your quality of life is a function of how you choose to spend that time.

Some things cannot be delegated, and some things can. You can’t pay someone else to spend time with your family for you, exercise for you, take a vacation with you, or play golf for you.  Everyone can delegate to one degree or another.
 
Do You Have The Expertise?
Investing is not a “hobby”. Ask yourself, are you really going to understand how markets work, why one insurance policy is better than another, how global events may affect your investments, work out how much money you’ll need in retirement or how the Taxation Act works.

The brightest financial minds in the world spend their entire lives immersing themselves in the world on money, as a full time job. Is it realistic that you are going to figure it out in your spare time?
 
Do You Have The Desire?

​You might be a brain surgeon—but would you operate on your own head?

​Motivation to manage your own circumstances can come from many sources, but it’s typically either an interest in investing OR incentive.  And there is no better incentive than the cost savings potential of no adviser fees.

Before you start spending your new found money though, recognise that your desire to manage your own portfolio must be sustainable.  Without the dedication to maintaining diligence over your circumstances, good intentions can go awry and the harm to your finances can far outweigh the fee savings.
 
Do you have the temperament?
Many DIY investors are like dieters that jump from diet to diet and end up at least as heavy as they started.
 
“Success in investing doesn’t correlate with I.Q.,” Warren Buffett once said.  “What you need is the temperament to control the urges that get other people into trouble”. 
 
 
As you consider these questions, remember these words of wisdom from Clint Eastwood as “Dirty Harry" as he surveys the flaming wreckage that engulfed his vanquished adversary.
 
“A man has got to know his limitations.”

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IMPORTANT This information is of a general nature only and may not be relevant to your particular circumstances. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.