What My Hobby Taught Me About Seeking Advice
It all started when a project on my honey-do list required me to dust off the circular saw. I discovered an interest in woodworking. Naturally, the first thing I did was join a Facebook group for beginner woodworkers to make my new hobby official. This group is a place to get advice from peers, learn from other people’s mistakes, and share your latest projects for bragging rights. A lot of questions get posted in this group, and I noticed that the most helpful answers tend to start with “It depends.” This really got me thinking about the financial industry and the importance of how people are getting advice.
Understand that your circumstances are unique, and general advice typically does not apply.
Most people start their research on Google but fail to realize that everyone has a unique set of circumstances and goals, so general advice isn’t going to get you where you need to be, at least not efficiently. There are a lot of resources out there for people looking for investment guidance or advice on financial responsibility. I’m not going to mention any names, but in most cases, these resources are selling subscriptions and can only give advice to what I refer to as the “lowest common denominator.” One question that I often hear is, “How much cash should I keep in my savings account?”. Well, it depends. If you are someone who is paid a salary, with all of the right credentials, good job security, a good credit score, and a healthy balance sheet? Or are you a small business owner with seasonal income, employees on payroll, and other business overhead? The former doesn’t need as much in savings as the latter.
Google is great; peers are better, professionals are best (sometimes).
As I mentioned above, most people start their research on Google. While that is a great place to get started, what if you don’t even know what questions you should be asking? Reaching out to your peers or someone who has been where you are and learned a lot since then is a great next step (hence the Facebook group I joined). At this point in my new hobby, it probably doesn’t make sense for me to consult with a licensed contractor on how to build a shoe caddy for my entryway. However, eventually, I will have learned just enough to be dangerous. I may get to a point where I’m confident enough in my abilities to tackle a big project. However, the problem is that I don’t know what I don’t know, and if I make a mistake on a major build, the results could be devastating. Financial advice is no different. There is a time and a place to hire a professional to help manage your financial resources, so it is important to be mindful when doing things on your own and to realize that there may be factors you don’t even know you should be considering. Most financial advisors will offer a no-cost consultation to help determine if you are at a point where hiring a professional makes sense.
The more details you can provide, the better.
Whether you’re still googling, asking a friend, or consulting with a professional, the more details you can provide the better. I saw a question posted the other day from someone who was building a garden bed. They asked, “What other types of wood could I use for this project?”. Again, it depends. We can assume their project will be outside, but are they looking to reduce cost or increase quality? Will they be using this for food or flowers? All of these additional details will help the nature of the advice they will be getting. After all, you don’t want to be eating tomatoes grown in a garden bed made of cheap, reused, chemically treated wood. A better way to ask this may be, “What is the best wood to use for a garden bed that will be exposed to the elements and be used for growing vegetables?”. Through the financial scope, this could be like someone asking, “Where is the best place to save for retirement when I’m just starting a new job and want to save on taxes?” as opposed to, “Where is the best place to save?”.
Always use the right tool for the job.
This one is not new to me. I can actually hear my dad’s voice as I write this sentence, but in my opinion, this is one of the most important lessons to learn. There are a lot of different tools out there and a lot of them seem to do the same thing. The differences become clear in the ease of use and, more importantly, the quality of the result. Sure, I can try to cut a 45-degree angle by hand with a circular saw and a speed square. It will take a lot of time and will likely not be 100% perfect, but if I use a miter saw (which is built for this purpose) to make that same cut, it will take less time, and each cut will be exactly what I need. Not to mention, I also get to add a new tool to my collection! The same goes for financial advice. There are a lot of different ways to save and invest, but making sure you are using the right investments and saving your money in the right places will have a huge impact on the quality and success of your goals.
Here at Financial Strategies Group, there really isn’t anything that we haven’t seen before. We offer a consultation free of charge if you’re interviewing a financial advisor for the first time. Or, if you’re already working with a professional but want to know if there are things you could be doing differently, we can give you a complimentary second opinion on your existing financial planning.
View related content at the links below:
https://fsgmichigan.com/blog/developing-and-maintaining-your-financial-fitness
https://fsgmichigan.com/blog/what-your-golf-game-can-teach-you-about-investing
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Written by Justin Meyer