“Most people do not listen with the intent to understand; they listen with the intent to reply.”
– Stephen R. Covey
When it comes to managing our finances, listening to too many voices can be dangerous. It’s often said that when buying a car, the more people we speak to, the more confused we’ll become! The same is true of your finances.
However – another problem we face is that we listen to reply, and not to understand. Again, with the complexity of life, this can be a major pitfall to our planning.
Times of festivities and celebrations are often paradoxical in that we want to see friends and family but don’t necessarily want their advice. Inevitably, they have opinions that challenge our own, and they’re all too willing to offer advice that we haven’t asked for.
This is okay – we don’t have to take their advice too seriously, especially when managing our money. You can choose to stick to the advice of your trusted financial advisor.
At WellsFaber, we want to help you avoid common financial planning and investment mistakes. This doesn’t happen once a year at a lunch party where the financial conversations tend to be rather superficial. This happens regularly and only after deeper conversations around meaning and purpose have been explored and brought into context by the money you have.
This is instrumental in helping you make decisions that are right for your circumstances and, importantly, helping you to avoid the pitfalls of investing on your own. Recently published on Allan Gray’s website, here are some powerful reminders of why those who have financial advisors (and take their advice…) fare financially better.
Investing without a plan
A well-crafted financial plan is a critical starting point for achieving financial freedom. If you don’t know where you’re going, how will you know when you get there? An advisor will help you to develop a workable plan to suit your personal financial goals and needs.
Investing in the wrong product
The choice of products available is mind-boggling. Different products have different tax structures and different objectives. An advisor can help you make the choices that suit your circumstances.
Time can erode the value of your money, leaving you able to buy less with the same amount of rands. This is called inflation. By putting your money in the right investment, an advisor can help you achieve returns that, at least, compensate you for the length of time that you invest so that the value of your money is maintained.
‘Blowing’ your retirement savings when changing jobs
It’s essential to preserve your retirement savings when you change jobs or if you are retrenched. If you don’t, you probably won’t be able to retire with enough money to live on. An advisor will encourage you to keep your savings intact.
Acting on your emotions
Investors are known to be bad at timing the market and basing investment decisions on emotions. In addition, they tend to switch between investments too often, destroying the value of their savings. An advisor could help you avoid this pitfall.
So – who’s advice do you want to take seriously? When someone has skills, experience and qualifications that can help you AND has spent time understanding your needs and helping you put a plan in place that reflects your goals and your risk appetite – you take their advice, seriously.