Investing is simple but not easy. To that end, what are the impacts if you do a poor job managing your investments?
Several studies from Vanguard and Morningstar have attempted to quantify how behavioral coaching can impact your savings. The numbers settle around 1.5-2%/yr. That may not sound like much, but could equate to millions of difference over 30+ years of savings.
On this episode, we continue to explore the benefits of the wealth management relationship. If you haven’t listened to the first part you can find it here.
Are you planning to fail?
Benjamin Franklin once said, “By failing to plan you are planning to fail.” That is why we always start with a plan. Do you have an investment plan in place?
It’s always easier to not do anything than to do something, but doing nothing will cost you over time. A wealth manager can help you set up your financial plan and put it into action.
Once we set up your investment plan then it’s time to act. Having a plan and acting upon it are two different things, but when you delegate your wealth-building decisions the odds are much more likely they will be implemented.
How a financial plan can help you in troubling times
When you have a plan in place you’ll understand what to do in challenging circumstances. Think back to as recently as March 2020. How did you fare when the market dropped over 30%? Our clients did well because we spent that time buying as many stocks as we could get our hands on at a discount. Since then, the market has doubled its value.
Are your investments diversified?
We can help you ensure that you use diversified investments. Many people don’t consider the value of diversification. However, as we saw with the Silicon Valley Bank crisis, it doesn’t pay to have all your eggs in one basket. Consider what would happen if there were a decline in a certain investment sector. How would your assets fare?
Are you your own worst enemy when it comes to growing your wealth?
While many people come to a financial advisor looking for a one-time plan, that can be helpful, the real value is in the way we can help you manage your investor behavior. Studies have shown that investor behavior matters more to wealth building than choosing individual investments. The wealth management relationship is a long-term investment that helps you stick with your wealth-building process. The best portfolio is the one you can stick with.
Listen in to learn how to avoid bad decisions that can take decades to rectify and how to ensure your financial plan actually gets implemented.
Outline of This Episode
[1:32] Investing is simple but not easy
[7:25] The tax planning benefits of having an advisor
[11:16] How a financial planner can help in the estate planning process
[15:32] Why delegating your wealth management is an investment
Resources & People Mentioned
Chad Smith
Chad Smith is a Certified Financial Planner™. He is an active member of NAPFA, the Financial Planning Association, and FPA’s NexGen. He has been quoted and appeared on WSJ.com, Bloomberg.com, Businessweek.com, Msn.com, Financial Planning Magazine, Triangle Business Journal, and Investment News.
![avatar](https://www.financialsymmetry.com/wp-content/uploads/Mike-Team-ID-215672.jpg)
Mike Eklund
Mike Eklund is a CERTIFIED FINANCIAL PLANNER™ practitioner. In addition, he has an MBA in Finance and the Chartered Retirement Planning Counselor designation. He is an active member of NAPFA, is the co-host of Financial Symmetry’s podcast, and has been quoted in various industry publications.
![avatar](https://www.financialsymmetry.com/wp-content/uploads/B00203371.jpg)
Grace Kvantas
Grace is a partner and Certified Financial PlannerTM with over 12 years of experience in financial planning. She helps busy families and individuals plan for retirement, save taxes, and simplify their financial life.
![avatar](https://www.financialsymmetry.com/wp-content/uploads/B0020308.jpg)
Cameron Hendricks
Cameron is a Partner and Certified Financial Planner™ with over 10 years’ experience in the financial services industry. With his Equity Compensation (ECA) designation, he specializes in helping employees and executives of technology and life sciences companies that have significant equity compensation. He is also a Certified Exit Planning Advisor (CEPA) for privately held companies on their path to and post exit.