Wealth Management & Financial Planning

Wealth Management & Financial Planning

Knowing When To Do-It-Yourself and When To Call A Professional

Some individuals are blessed with exceptional talents to fix anything. Some of us are capable of fixing anything but only with the help of a phonebook ready to call for assistance. The emergence of ‘How to’ videos on YouTube and hardware stores provide confidence you can do anything!  They are so persuasive I have left Lowes with the full confidence to redo our bathroom. That was a mistake!

Many things in life are simple but that doesn’t always make them easy. Those of you who are good at drywall would call it simple just as a chef would call making a great soup simple. The required skills have taken years to perfect and the level of difficulty is in the eye of the beholder.

Investing can feel simple. You log on to your 401k and gather all types of data and information. It’s exciting to hear how simple it is to trade currencies, do options and to manage your own investments. Just as some of us wish we could change the brakes on our own cars or repair a leak in a drain, most people want to believe that because investing is so simple that it must also be easy. Simple, in my mind, relates to the process.  Easy relates to the result. This is where the demonstrations and YouTube videos fail to suffice.

The nice thing about redoing a bathroom is that you can check it off the list. You can walk in and admire the quality and skill or complain about the uneven wallpaper.  Either way you can chose to be done or redo any noticeable mistakes. On your 401k how do you notice a mistake? Is it based on returns relative to a benchmark? Do you make a mistake based your allocations regardless of events occurring in the financial world? Either way you cannot put your 401k on auto pilot.  This is not a once and done decision.  You can check off the initial plan but you must monitor along the way.

The USA Today reported that about two-thirds (63%) of workers with 401(k)s are managing their own investments. Of those folks 54% are unengaged, that is not taking an active role in managing their account, says a data analysis of 13 million participants in Fidelity Investments 401(k) plans across the country. That is just plain scary! What is worse is that most people don’t have a discipline or process to understand what needs to be monitored and how to grade themselves.

You love your house and your hobbies.  I do too.  I love to learn about cooking new dishes and seeing new places.  I am willing to put in the time required to do it right because it is my passion. For many unsuspecting individuals, they don’t pay enough attention to their retirement nest egg not because they don’t care about retirement but they have no passion and no process for managing their accounts. Maybe they should use the phonebook and find help just like I would on the remodel.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.

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