In this do-it-yourself (DIY) world, many people choose to manage their finances on their own. Whilst going it alone may seem like the cheapest way to manage your money and investments, it can end up costing you in the long run.
If you’re looking for advice on developing a comprehensive financial plan, you’ll want to start by seeking the services of a certified financial planner.
I was recently reading the latest findings from Roy Morgan’s Single Source survey and it found that the number of people who are asked for financial advice by their friends or families is estimated at 3.5 million, equivalent to 17.2% of Australians 14+.
Another interesting statistic from this survey followed shortly after:
Some six million Australians seek advice about money and investments from friends and families.
Unsolicited or unprofessional financial advice might seem harmless enough, but blindly following it can send you down a scary path if things don’t go right. After all, would you seek treatment for a medical condition from your mates at a BBQ or would you see a medical practitioner for professional advice. The advice from the medical practitioner comes from a substantial amount of education and experience.
Taking advice from anyone who isn’t qualified could cause you to make a financial decision that puts you in an unpleasant situation. Here are three people you should avoid taking financial advice from.
Family And Friends
Family members often have expectations about what your financial future should look like, expectations which don’t always line up with what you want. In a sense, family members are almost too close to you, as they can’t be objective enough to show you all your options. Often their approach will be what worked for them, which may not apply to your situation or work as well for you.
A financial planner has no personal stake in your money decisions — like a sports coach, it’s a financial planner’s job to remain objective and try to lead you to the path you desire. That objectivity is almost impossible for a family member.
You spend a lot of time with your co-workers, perhaps even more time than with your family. This of course can lead to a lot of trust, but trust alone does not make your co-worker qualified to give you financial advice.
They may know something about the general salary you earn and even have ideas about your financial status. But they likely don’t know everything about your life goals, your family finances or financial planning in general. How will they know what will be most effective for you given your age, current financial position and where you are trying to get to in life?
The Internet is a treasure trove of information. It is a wealth of contradictions wrapped in an argument and garnished with conflicting opinions. It’s easy to find yourself disappearing down a rabbit hole of exaggerations, unqualified opinions and alarmist advice on forums.
The Internet can be an enormous resource for finding financial information and advice. Yet too much information can be overwhelming. It can even be dangerous when you don’t know how to separate the good advice from the bad.
There are far more unreliable resources out there than you would think. While you can look online to find the same time-tested and common sense principles about sound personal financial management, the Internet may still steer you wrong.
The help of a knowledgeable and reputable financial planner can go a long way in making sure you stay on course to meet your unique financial needs and goals.
About Massey Financial Advice
I am a Brisbane-based Financial Adviser with more than 14 years of experience working with professionals to achieve financial freedom. I have clients across Brisbane, including from Ashgrove, The Gap, Kenmore and Chapel Hill.
Sometimes people don’t really understand their financial situation – whether that be their personal cash flow, wealth creation or retirement plan, and this puts their lifestyle at risk. I partner with professionals so that they feel empowered to make the best financial choices for them, their family and their career.
A great first step to preparing for your retirement is to book a cost and obligation free Financial Gap Strategy Session by clicking the link below. This is a free phone call at a time that suits you to discuss what you are working to achieve and discuss how I may be able to help.
If you would care to share your experience with me, please comment below!