I like to pay myself first by socking money away in my retirement account. I know that's standard dogma for financial management, but it is sound advice. I know it to be true for many reasons, one of which is that I spent several years as a registered representative. That means I held investment licenses and could offer investment vehicles to the public as a broker. I helped a lot of people set up their retirement accounts and gave that bit of advice to almost all of them.
Now, though, I am out of that business. I still know enough to manage my own investments but I choose to use a financial adviser instead.
I know that brings up two questions. The first is: "Why would you use an adviser when you already know about investments?" That's an easy question to answer. He'll do a better job of it than I will. That leads to the second question: "Why will someone else do a better job than you?"
When you're in the investment business you eat, drink, sleep, live and breathe investments. Your finger is on the pulse of the market all the time, if you are good at your job, because you need constantly updated information. A professional investment rep can spend his time doing that.
I, on the other hand, spend my time doing other things.
There is a term in economics that explains it well, called "opportunity cost." Without going into complicated definitions it boils down to a simple idea. If I spend my time managing investments I am not spending my time doing my real job, which brings in revenue. That's why I shove that responsibility off on someone else whose job requires them to spend time managing investments.
Another way to put it would be that you probably let a doctor help you with health concerns. You might be able to go to medical school and learn to do your doctor's job all by yourself, but it's just not a wise way to spend your time.
I get regular statements from my adviser. We talk on the phone regularly. He calls me the moment the market changes and I need to act. It relieves me of the need to worry about these things so I can focus on the rest of my life.
Now, though, I am out of that business. I still know enough to manage my own investments but I choose to use a financial adviser instead.
I know that brings up two questions. The first is: "Why would you use an adviser when you already know about investments?" That's an easy question to answer. He'll do a better job of it than I will. That leads to the second question: "Why will someone else do a better job than you?"
When you're in the investment business you eat, drink, sleep, live and breathe investments. Your finger is on the pulse of the market all the time, if you are good at your job, because you need constantly updated information. A professional investment rep can spend his time doing that.
I, on the other hand, spend my time doing other things.
There is a term in economics that explains it well, called "opportunity cost." Without going into complicated definitions it boils down to a simple idea. If I spend my time managing investments I am not spending my time doing my real job, which brings in revenue. That's why I shove that responsibility off on someone else whose job requires them to spend time managing investments.
Another way to put it would be that you probably let a doctor help you with health concerns. You might be able to go to medical school and learn to do your doctor's job all by yourself, but it's just not a wise way to spend your time.
I get regular statements from my adviser. We talk on the phone regularly. He calls me the moment the market changes and I need to act. It relieves me of the need to worry about these things so I can focus on the rest of my life.
