To what extent we can meet the challenges of managing our finances? Probably the main argument against this question is the belief that we do not have enough money at all, let alone to consider their “management”. However, the truth is a bit different. Money, no matter how much or less we have, is at the same time a challenge, a difficult task to solve and a threat if we make mistakes in spending.
Here comes the questions do we really need a financial consultant and what are the potential benefits of having one. Before we get to the answer, we need to be clear about our goals – whether to invest our savings; if so – where and how; how to save for the education of our children; how to make sure that we have a enough for retirement; is there a way to repay our loans earlier; do we need life insurance; and at what price; and many more questions in this regard.
In our everyday life we make many decisions related to our finances. Even after the “trial-and-error” method most give a result – sometimes satisfactory, sometimes not.
The truth, however, is that there are situations when the advice from an expert can pay back well in time. Why? Because, even if we are among the best in our profession, it still can be difficult, even impossible, to see the bigger picture when it comes to our finances, to analyze and manage it correctly.
And the point here is not only about the income – expenses balance, but for a serious plan, navigating towards strategic decisions such as when and how to buy a home; is it possible to invest for education (our own or that of our children); what would happen when a child is born; are our daily expenses reasonable; do we exceed our financial capabilities; are we getting into too much debt; do we use our credit card wisely, etc.
The hypothesis that we earn well, but are too busy, and let’s face it – sometimes confused about what to do with your money, also leads to the conclusion that a financial advisor can be very helpful. If you read our blog regularly, you would know that owning 4 condos in the Student City district is far from the perfect investment, although these may seem impressive as a gain.
The truth is that nowadays an adequate financial plan is important and extremely useful for making strategic decisions which usually have long-term effects on us and our family. Another important point that we rarely consider is the emotional factor when it comes to spending and investing our money. It is our money and it is hard earned. We must admit that we hardly ever manage to distance ourselves and stay unbiased, especially in risky situations for our finances. The assistance of an external consultant can help us keep an emotional distance and make much better decisions.
Since it would be hard to find a standard answer for every situation, asking ourselves about the following may be a good direction when we decide about the role of financial advisor in our life:
Are we doing well?
With the achievement of all goals considering our limited resources. Can we repay our loans, save for a rainy day, buy a home or a new car, afford a nice vacation, plan a wedding? And on top of that to enjoy the moment.
Are we really good?
In managing our money. There are people who earn well but fail or don’t like to manage their money. Others wish to devote their time and energy to different things.
Are we objective?
How rational our decisions are when it comes to our money, earned hard, with extreme efforts and deprivation. Is it possible that we have missed a good opportunity or made a huge mistake, no matter how much we know about investing, how disciplined we are and how well we are doing.
Do we have a correct approach?
While after a medical examination we consider a second opinion, just to be on a safe side, but when investing our money, we believe there is no one who can guide us on how to do it better.