(3 minutes to read)
You can and should utilize others’ expertise to accelerate your financial progress. One reason? They can help you ask the right questions.
We often think we know the right questions to ask about various areas of our lives. For example, when I meet people considering hiring a financial advisor to make greater progress in their personal financial lives, they often bring a few key questions to our first meeting. Often, they have researched those questions extensively before scheduling the meeting and are quite knowledgeable about them already.
For example, the question of “How much income can my investments generate in retirement?” is often accompanied by an explanation of their understanding of the 4% withdrawal rate rule. Or asking, “How much should I allocate to US stocks vs. international stocks?” is likely followed by a rationale for why US stocks will continue to outperform international stocks over the next several years. They might ask, “Can I quit working next year?” before sharing a detailed, off-the-top-of-the-head estimate of incomes and expenses going forward.
There’s often more below the surface though—a question behind the question. “How do I reduce my taxes?” is really a question about whether someone is accumulating wealth quickly enough to get to work-optional when they want. Many questions ultimately lead back to one of the really big underlying questions for most people: “Will I have enough money to live the lifestyle I want when I stop working?” Or more briefly, “Will I be safe financially over my lifetime?”
When someone asks a specific financial question, it’s usually because they’ve identified a problem or a goal in their life. However, those specific issues rarely exist in isolation. Your personal finances are a complex system of interrelated areas that need to function together in synchronized harmony. It’s a tangled mess of issues that requires a holistic approach to managing, one that often requires the help of an expert. Experts are trained to see the connections between issues and address the broader picture. And dig into the deepest questions and concerns you can use help with.
It’s natural for people to work on solving their own financial problems. After all, who knows your situation better than you do? However, this self-diagnostic approach has limitations. Just as you wouldn’t attempt to diagnose a complex medical condition on your own, it can be risky to make major financial decisions without at least some expert input. You may understand your current situation and goals, and basic questions around them, but you might not be aware of all the options available or the long-term consequences of certain courses of action. It’s like the old saying: you don’t know what you don’t know.
My son coined the term “temporary expert” to describe situations where we quickly learn about a subject to make an important decision. Think about researching roofing materials for a home repair or studying medical conditions after a diagnosis. While this knowledge can be helpful in making a decision at the time, it’s often fleeting and not sustainable over the long term. In some areas, such as personal finance, being a temporary expert can be particularly risky. The financial world is complex and constantly changing. What worked yesterday might not work tomorrow. Staying on top of your finances requires continuous learning, continuous activity, and continuous decision making. As I mention in Personal Finance for Tech Professionals, “[M]anaging your finances is a continuous process. It involves a set of behaviors and actions implemented consistently over a long period of time, sprinkled with important decisions needing prompt attention occasionally that, as luck would have it, arise during the middle of an important project you’re working on. For best results, you’ll need to pay attention to your finances regularly.”
This is why ongoing expertise—which opens up the critical questions and goes beyond what you want to know—is crucial. Unless personal finance is a topic you find fascinating enough that you’re motivated to keep up with the latest in the many interrelated fields, such as equity compensation, investments, and taxes, it may well be an area that’s better delegated to someone else. Delegating both helps ensure your financial life is always improving and expanding and frees up time and mental energy for you to focus on your strengths, excel in your own areas of expertise, and ultimately drive your life forward faster.
If you find yourself focusing on narrow questions about your finances, or procrastinating on financial decisions, this is another good sign it could be time to consider partnering with a financial expert.
A true expert will help you see the big picture, ask the questions you might not think to ask, and guide you toward a more abundant and secure financial future. An expert can provide continuous support and help you navigate the complex world of personal finance with clarity.
By collaborating with a financial expert, you can create new growth opportunities, achieve your financial goals more efficiently, and feel confident knowing that your financial future is well-managed.
Parkworth Wealth Management provides holistic wealth management services including financial planning, equity compensation planning, investment management, tax planning, and others, on a fee-only basis and as a fiduciary, acting in clients’ best interests. If you’re ready to partner with an expert to move your financial life forward faster, schedule a complimentary consultation.
