By Julie Lord
Few people describe making large financial decisions as “effortless”, “painless”, or “fun.” In some situations, you may even lose sleep over choices surrounding your finances.
When you factor in coronavirus or any financial uncertainty surrounding these milestones, your stress will only intensify. Huge life events such as getting married, buying a home, going to university and retiring should be happy occasions, but not so much if you are always worrying about how you will afford them.
Stress about money is one sign you might need to consider hiring a Financial Planner.
Other signs it’s time to seek professional advice include:
- You realise you don’t have the time or knowledge to do it on your own
- You’ve reached a point in your financial life where a mistake may be permanently damaging
- You’re unsure if you’re on track to meet your goals
- You’re worried you’re making the wrong investments
- You’re scared to do anything because you are worried about the risks
Hiring a professional means having someone dedicated to you and your family’s financial health that can turn these negatives into positives.
In addition, it frees up your time to worry less and live more.
As Financial Planners, we are obviously biased towards suggesting that you seek help. That being said, let us share a quick story to give more context to this debate and our suggestion that often DIY is not the best way forward.
You Can Probably Manage on Your Own
When I bought my last house, I wanted a larger garden. With that larger garden came bigger responsibilities. I had to spend time and effort cutting the grass and maintaining the lawn – something I never needed to do before.
Initially, it took me about two to three hours to mow the lawn. Eventually, I got efficient enough to finish the job in roughly 90 minutes. I always felt that the time commitment was manageable, and the result was pretty good.
There were some occasions, however, where I didn’t have time to cut the grass on the weekend. Sometimes that was due to other commitments and, admittedly, sometimes it was just due to laziness.
Longer grass meant it took longer to cut the next time and the lawn didn’t look as nice. Additionally, if it rained, cutting the grass to make the garden look nice really became a problem.
All and all, I managed well enough. My lawn looked pretty good. Then I saw what it looked like when a professional did the job.
There’s No Substitute for Expertise
When children came along, I decided to use a local lawn service company called Greenfingers and in the summer paid them around £20 a week so I could spend more time with my family at the weekends. This was one of best decisions I’ve ever made.
Greenfingers did the little things I wouldn’t have thought to do or known how to do properly.
They periodically changed the direction in which they cut the grass to encourage healthier growth. They fertilized and seeded strategically. They cut the grass to a specific length depending on weather conditions or the area’s exposure to the sun. They edged around our flower beds and plants.
The end result was a drastically healthier and superior-looking lawn. But even more importantly, hiring a professional gave me more time to focus on the things that are most important in life.
It’s Not Complicated, But Mistakes Are Costly
One argument for do-it-yourselfers is that they are saving money by not paying someone (regardless of the service they’re DIYing). Another is do-it-yourselfers simply enjoy managing their own money (or maintaining their own lawn).
These are fairly similar to the reasons that I chose to cut my grass. However, the big difference is that making a mistake with your lawn has far less severe consequences than making a mistake with your finances.
Mowing your lawn isn’t rocket science and you can get the job done on your own. But having someone who specialises in lawn care and maintenance, dramatically changed the outcome (both in terms of a better lawn and better overall quality of life, since I got hours of my time back).
Financial planning isn’t necessarily rocket science, either, but the stakes are much higher. A mistake made through DIY investing or making some wrong assumptions about your future life, can cost you huge amounts of money.
For example DIY investors unknowingly make a lot of behavioural and emotional mistakes that add up to dramatically worse performance. Unfortunately, this isn’t always obvious because they don’t have the reporting or tools to truly evaluate their performance.
The Difference a Financial Planner Can Make
Financial Planners have tools and processes to dramatically improve not only your investment implementation and outcome, but also to consider other life opportunities and benefits that you may know nothing about.
Research from Vanguard estimates that Financial Planners can add about 3% to an individual DIY investor. That’s great by itself, but your decision to hire a professional shouldn’t be only about investments.
Choosing a Planner that provides comprehensive financial planning beyond traditional investment advice can get your entire financial house in order and keep it that way forever. Real Financial Planners will help you to work out your priorities and what is most important to you, then proactively assist you in everything necessary for you to be secure, happy and able to pursue your passions in life.