Do you need a Financial Planner?
You’re making more money than you ever have in the past. At the same time, you’re spending a fair amount of it - enjoying the fruits of your labor, as you should. Accompanying the satisfaction of treating yourself is a small side of guilt. You feel like you should probably be saving some of this money too - at least that’s what you hear from peers, family, and friends. Though, you don’t know what you don’t know about saving, investing or financial planning. Should you partner with a Financial Planner or is this something you can do on your own?
Who wants to build a Puzzle?
Financial Planning is like managing an ever changing puzzle that as a whole represents a blueprint on how to achieve your goals. The individual pieces represent bits of your financial picture - age, income, savings rate, etc. The first step is to get organized - think of this as setting aside pieces of a similar color. Next, you start taking action to build the Plan. Once complete, you have a comprehensive guide on what you need to do to bring core values to life. Of course, the puzzle is adjusted over time as your pieces multiply - our goal is to get to a 10,000 piece puzzle or bigger.
If you’re initially working on a smaller puzzle, you can probably learn the basics and do it yourself. Once more pieces are added, it may make sense to partner with a Planner. With the help, you can build more quickly and not leave anything out - nobody enjoys the feeling of getting to the end of a puzzle only to realize there’s a few pieces missing.
What does a Planner (tangibly) do for you?
Outside of the visual above (pun intended), here is an overview on how Planners tangibly support you.
Get you organized, so you can see everything in one place.
Today, we have software that helps us automatically link all your accounts to one portal and track data like your net worth over time.
Review overall cashflow and illustrate how much you need to save to hit each of your goals - creating balance between living today and saving for tomorrow.
Set up tax efficient accounts and manage the investments for you, so progress is made more quickly and efficiently.
Protect the Plan with insurance and estate planning.
Quarterback major financial decision making like buying a house, getting a new car (lease vs. finance), assessing profitability of investment properties, navigating career/job changes including election of employer benefits, and managing equity compensation or business income - to name a few.
What (intangible) value does a Planner provide?
This is where the magic happens and what distinguishes your average Planner from a lifelong team member that is there to support you every step of the way. Here are some immeasurable ways a Planner adds value - cue the MasterCard commercials from the late 90s, PRICELESS.
Break down complex financial topics and jargon into something you can understand.
If you understand the WHY behind certain financial decisions and how they benefit you, you are more likely to follow through and take action.
Decipher all the noise from the media and use unbiased experience and insights to tie what is actually happening to your particular situation.
It doesn’t matter if the market is going down today because of tariffs if you are in your 30s and invested for the long run (retirement).
Be a sounding board for things you see on social media.
There is a lot that comes across your feed. Send these posts to your Planner to get their subjective feedback. Remember, we are under much more regulatory scrutiny than your average influencer.
Act as an implementation and accountability partner. Merely receiving good advice doesn’t make a difference, you have to take action on it too.
Have a perfect understanding of your core values and beliefs - potentially better than you - and be able to illustrate how money is a tool to bring these to life.
Refer you to other vetted specialists when there are more complex needs like business taxes or estate planning.
When can you do it yourself?
When you are just starting out. In other words, you are post college and working your first professional job. There are 2 reasons for this.
There isn’t a whole lot of complexity in your Plan. You can easily watch a few YouTube videos and learn how to do it yourself. Plus, it’s good to know the basics and how the money system works - the education will serve as motivation for you to accumulate true wealth over the long run.
You most likely have the bandwidth to do it. At a young age (post college), you don’t have as many tabs open as in your mid to late 30s with family, kids, aging parents, home maintenance, and other things.
When does it make sense to partner with a Planner?
You have a big Puzzle!
Too much is at stake. You’re either making too much money or have accumulated enough savings that you’re worried you may make the wrong decision. Or better yet, forgo making the right decision as inaction could have consequences too.
You don’t have the time or desire to do it yourself. Regarding the latter, you may have reached a point where you rather delegate to someone else. The benefits are twofold - you have more free time to do the things you actually enjoy and your conscience is freed of any worry that you’re missing a crucial puzzle piece.
