Debunking Financial Myths Part 4 – Relying On Advisers
I have indulged myself a bit with this installment of my series on financial myths. I hope you are as entertained as I am.
“Advice from a celebrity financial expert must be true and can be relied on when making decisions about your personal situation.”
False. Just because you see something on TV, it does not make it correct or reliable. Please do not allow a celebrity spokesperson’s notoriety, or your admiration for them, to cloud your judgment. Despite the incredibly persuasive commercials with very smooth actors, not everyone needs a reverse mortgage or gold coins! As to the experts who appear on TV financial talk shows, let us not confuse popularity with sagacity. TV and radio “advisers” may be quirky, captivating entertainers, but I’ve heard them say some pretty dumb things. Remain skeptical about what you see, hear and read. And never forget that 100% of the cost of television shows is paid for by the advertisers.
“A financial adviser is necessary to reach your investing and planning goals.”False. Working with an adviser is no guarantee of achieving your financial goals. Some advisers do more harm than good. Some are simply salespeople masquerading as impartial financial planners. Some charge too much for the services they deliver. So, guess what? If you have the aptitude, the time, and the interest, you can learn how to do your own investing and retirement planning! People do it, and I know, because some of them have asked me to take over for them when they no longer have the interest, ability, or time.
“Financial advisers cost more than they are worth. You are better off learning and investing yourself.”
False and, no, I’m not talking out both sides of my mouth. Yes, as per the last paragraph, some advisers are not “a good investment.” However, an experienced, knowledgeable adviser really can help with your finances and is well worth the fees. And, by the way, shunning the do-it-yourself approach to your finances doesn’t mean you are lazy, unintelligent or cowardly. I’ve met plenty of very smart investors, with a seemingly endless supply of energy and confidence, who have chosen to hire a professional financial adviser.
I’ll wrap up this week’s column with a question: do you mow your own lawn? If so, then I’ll bet you have the time, the skill, and the interest. Remove one of the three and there’s a good chance you’ll hire someone else. It is the same with your money.