Recently I was talking with a friend about how much I like running. It’s simple, you can just lace up and go. It’s meditative, allowing for introspection and mind-wandering. And it’s great cardiovascular exercise. I looked at my friend expectantly.
“I hate running,” he said.
“But why?” I was at a loss that he couldn’t comprehend my passion.
“Because it’s boring … and hard.”
Boring and hard
You might just say, “Different strokes for different folks.” But I found the conversation enlightening. It essentially summarizes the need for the financial-planning profession. Many people feel the same way about managing their money as my friend does about running. And just like knowing that you need to exercise to stay healthy, people know that they need to pay attention to their finances to prepare for the future — but they still hate it.
On the other hand, I find personal finance and investing endlessly fascinating. I love the constant learning; helping clients understand the various puzzle pieces they can use to put a plan together; and the psychology involved in constructively managing money. All of that is work, but it appeals to me. Yet for many people, perhaps most people, it’s just boring. And hard. As my wife would say, “Every pot has a lid.”
With running, or at least exercise in general, just because you don’t like doing it doesn’t mean it’s not important. If you don’t like running, you can try a different sport or a class to make sure you still get exercise and stay active.
Similarly, with personal finance, one of the most dangerous things you can do is avoid it. Neglecting your finances may not have a major impact on your lifestyle or financial picture immediately. But if you don’t address it, over time you will likely find yourself in a difficult position. Funding big goals like your child’s college education or your retirement savingstakes planning and time — and the more you have, the better your chances of success.
Fortunately, if you can’t find the motivation to tackle financial planning on your own, you can always get help. A competent financial professional can help you get on and stay on the correct path. Some of the things that you may find dull (yet important) that your financial planner would be happy to help you with include:
Investment education: Confused about your investment options? Should you have more bonds or stocks? What about REITs or MLPs? Your advisor will happily explain these concepts and assist you in building a portfolio strategy to match your time horizon and tolerance for risk.
Long-term goals: Do you look forward to retiring early? Starting your own business? Taking a sabbatical? Your advisor can help you work through the details and inevitable trade-offs necessary to make these dreams a reality.
Retirement planning: If you can’t decide whether to choose a 401(k) or an IRA, your advisor can help you sort out which retirement savings vehicles are right for you. Your advisor can help you develop a plan to ensure that you have adequate savings and income once you retire.
You can think of your planner like a personal trainer for your finances, or maybe your favorite Zumba instructor. Ultimately, your financial advisor’s job is to help you meet your goals — and hopefully have a little fun along the way.