informed decisions blog

Blog #27- Do I Need Financial Advice?? Probably Not, You Just Need To Do This….

3rd April 2017

Paddy Delaney

In this blog I am going to open the can on Financial Advice full stop! I am going to outline why you don’t need any initially, and how you can help yourself. Do I Need Financial Advice?

Welcome to Ireland’s only dedicated resource on Financial Planning for investors and pension savers here in Ireland. As always I would encourage you, if you are new here, to have a look over here to find out what we are all about and why this blog & podcast exists. Also be sure to check our our Financial Planning Podcast, Ireland’s only dedicated one!

There is a lot of confusion in this world about Financial Advice, Financial Planning, Financial Management, Wealth Management, Money Management etc etc. There are many industries and tens of thousands of people employed because of it. That employment is of course a good thing.

For the past 2 weeks our Podcast featured Dr. Daniel Crosby and discussed how we can enable ourselves to make more informed money decisions. One of his key principles was that ‘we cant do this alone’. In this he outlined that all the research goes to support the idea that as investors we will do a lot better if we have the guidance of a competent financial advisor/coach. This point also related to the management of ones funds. However on this show we are also conscious that a lot of us won’t yet have accumulated large assets/investments, and that is who we are supporting in this weeks’ blog.

Prefer Audio Show? Do I Need Financial Advice?

This industry largely revolves around products and the selling of products. It is the products that generate the income and commissions for the providers and sellers and ultimately should help you reach your goals also. In my experience the majority of advisors out there are well-intentioned and well informed. However the product is merely the solution to your needs and goals. You, only you, know what your own specific needs are. If you have been following all previous blogs & podcasts then you will hopefully have a clearer understanding of it all.

But I want to simplify it even more. So here are 2 principles anyone can apply to huge effect in managing their money. We talk about Financial Planning for investors, pension holders and savers here in Ireland, this is the nub of it…..

  1. Spend less than your income
  2. Invest & save wisely

Thats it! This blog is not about me but if I could rewind the clock to when I was 21 and starting our in the world of work and adulthood, and I was to apply those principles I would be much closer to my financial goals than I am now, while still having had the opportunity to enjoy the experiences I did. Unfortunately it took me ’til I was 28 to realise the above!

So Why Don’t We All Do This:

  1. Because It’s Not Cool: As a kid do you ever remember any of the ‘cool lads’ being really good with managing their money and saving? No way, all the cool lads & lassies spent every cent they got on runners, fags, make-up, cars or whatever it was that floated their boat!
  2. We Are Materialistic: I have covered it in detail, from our need for instant gratification to our penchant for shiny cars, we see it, we want it, we buy it! We are rubbish at abstaining, fact!
  3. We Don’t Have A Plan: We all know that over-used term ‘if you fail to plan you plan to fail’. This is 100% applicable to the this arena. In order to succeed we need to have a plan, a clear understanding of what is coming in, what is going out, and what we can put aside for our future goals. Without a clear plan we are doomed! We will spend on stuff we don’t need and needlessly throw away our chances of giving ourselves a quality financial life.
  4. We Don’t Know How To Invest Wisely: All the research points to us, as a population, knowing very little about the options available to us, the power of compounding, and a lack of awareness as to the most effective means to save and invest wisely. We take the word of advisors and sellers who may or may not have our best interests at heart. Recipe for disaster. Recent studies in U.S showed that 93% of people have no idea what fees they are paying on their investments….Do you??

You Have The Power: Do I Need Financial Advice?

Now that I have slated you from ‘a height’ I need to rebuild you! You really do have the power to take ownership. You have the ability to create a plan, to save like a lunatic, to spend less that your income, to make small changes and to do this over a sustained period in order to build wealth and achieve realistic financial goals.

I have harped on about it before but we all need a plan. You don’t necessarily need financial products, plan comes first. You can self diagnose, reflect and determine your income and expenditure. I created a free resource to enable you to do that, Informed Decisions Budget Tool.

I recently met a friend for a cup of tea, he wanted to ask me about his finances and what he could be investing in etc etc. We ended up talking for a full hour, however we didn’t once refer to money or products. The discussion revolved around him, his plans, his concerns and his future. The product will only come once he has a clear vision for those all important aspects. For many of us Financial Advice should be the last piece of the puzzle.

Be aware that if you seek financial advice it often will come with a pitch for products, and that’s the reality, but go into it with a plan, that should determine what you do or do not buy. An advisor will always like to deal with someone who knows where they want to get to, so everyone will be happy!

Finally be hyper aware of the costs, know what you are paying, try keep fees as low as possible. This has an unbelievably significant bearing on your long term values (Blog Topic Coming Soon!). Try not to be like the ‘other 93%’ who haven’t a clue what they are paying and the impact it will have on their long term values.

You can access this and all our content in Podcast form over here, and indeed iTunes via the icon below.

Thanks for reading this far, for being proactive with your finances and for enabling your own financial success. Do I Need Financial Advice?

Paddy Delaney

(QFA, RPA, APA, BBS, Coach)

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