Be Hands-On In Money Matters
April 23, 2013 1 Comment
Every day,these days,scores of businesses are opening shop in the financial advisory space.Their siren call is ‘Listen to us!Give us your money.Then relax,take it easy or go off and make more money.We will ensure you get rich and have have a great worry free life.Your family will never want for anything in this life.’Each of them have propitiatory tools and processes that they claim are magic wands that will ensure your financial well being.
The problem here is that personal finance is fundamentally personal and varies from person to person.There is a huge value component that these companies gloss over.Most of them will tell you that you need to build a corpus for your children’s education and marriage,your retirement and to take care of providing for health care.Many have readymade numbers for these goals.A few more will throw in planning for a home purchase,car purchase and perhaps a foreign vacation.But is this what you really want?Perhaps you want multiple homes in multiple locations?Maybe you wish to build them yourself,with your own hands.Log cabins anybody?How many of these plans allow enough flexibility for you to be yourself and do what you really want to do?Since it’s plans that are being sold,do planners really want to go beyond the cookie cutter variety and put in more effort?Do they have the competence to dish out advice for unique goals?
Financial planners and their standardized plans and nifty tools have their place.They can get you started on thinking about your personal financial plan.They also have varying competency in picking the right financial products.Some of them are good money managers.The danger is that the personal finance gurus make or keep you under-confident and impose or restrict you to the goals they believe is best for you.Is it really worth it to subsume your distinctive personality and eschew your own philosophy and money ethos in favour of promises to do away with your responsibility for what you really want to do in life ?
Many people fear math and extend this fear of math to money matters.In reality, if you can count on your fingers and toes and can operate a calculator,you are unlikely to need more math skills for most money management.In any case you can hire the MBAs and accountants to do that for you. And believe me they are not that expensive either.To manage money wisely what you really need most is common sense,a little bit of discipline and creativity.And if you are a normal,fairly well-adjusted human being, you probably have enough of these three qualities to manage just fine. There are some chores associated with managing money,but as you hire help to deal with chores round the home and office or automate,you can do the same for money management chores.
So hire experts if you really find them to be expert and feel a need for them but don’t allow them to design your life for you!And pay them for the nature of the work they do!