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, so I joined a Facebook group for beginning woodworkers and soon had a hobby. 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 to thinking about my industry and the importance of where and 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, then you probably don’t need as much in your rainy-day fund as a small business owner with a seasonal income.
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, increase quality, and will they be using this for food or flowers? All of these additional details could help the effectiveness of the advice they will be getting. 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’m writing 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 have similar purposes. The differences become clear in the ease of use and more importantly, the quality of the result. Sure I can try to hand-cut a 45-degree angle with a circular saw. 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. 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.
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Written by Justin Meyer