If You’re Doing This, You Might Not Get the Financial Results You Want
As someone who works in the tech industry, chances are you’re going to relate to the scenario I’m about to describe.
Someone walks into your office and says, “I’ve been wondering about _____, so I Googled it and now I think I can do it on my own, but I’m not quite sure.”
At this point, two things are probably going through your mind:
- This person has just wasted a lot of time researching something I could have helped them with more efficiently.
- I hope they didn’t sink any money into something that might have been done incorrectly.
For those of us in the financial industry, we go through the same thought process. Here are some of the things you might have looked into on your own:
- How do I create a properly diversified portfolio with proper weightings to international, small cap stocks, corporate bonds, etc.?
- What are the pitfalls of doing a two-step Roth conversion?
- What’s the likelihood that I can retire at 62? (And NOT run out of money!)
- How might my retirement income change by downsizing or delaying retirement for a couple of years?
- How can I learn the impact of exercising some options this year? How will this affect my Roth conversion?
- How can I donate to charity in tax-effective ways when my company has given me a sizable position in company stock?
Just like most things that are tech related, we know that there are tutorials and resources that you can access to find some of the answers you need about your finances. However, just like most things that are tech related, chances are you’ll probably save time, money, and sanity working with a professional.
The Domino Effect of Financial Planning
Let’s be honest: people who work in technology are smarter than the average bear. Could you find the answers you need about your finances? Probably. Will you be highly confident that what you come up with on your own will be correct and that you won’t miss out on anything a professional could help you with?
Did I detect a slight shift in your posture or slight hesitation in your answer?
If you’ve found yourself down the Google rabbit hole when it comes to your finances, you know that simple questions don’t always have simple answers. Moving the pieces of your finances around often creates a domino effect and can sometimes cause unintended consequences.
For example, I’ve witnessed people attempt a two-step (aka, backdoor) Roth and end up with an unexpected – and sizeable – tax bill. (Hint: Take a look at the pro rata rules.)
Let’s Save Your Sanity Together
Again, I know you have the intellectual tools to put a lot of pieces together yourself. What I want to help you with is looking at the entire picture and how each decision you make financially can impact another. Yes, disciplined investment management is a critical element of a comprehensive financial plan, but ignoring other financial strategies like…
- Taxation – (bucket-filling and loss-harvesting)
- Estate Documentation
- Charitable Giving
- Insurance coverage gaps
…is like playing golf with only two clubs or football with only three players: You know you’re allowed to use more resources to increase your chances for success – so, why wouldn’t you?
I’ve been in this business for nearly 20 years and have structured my practice in a way that gives clients the financial planning they need using a fee structure that’s easy to understand.
Using a flat-fee model for the majority of my clients puts the focus on planning, which includes investment management. I’ve learned that other structures, such as charging a percentage of assets under management (the AUM model) often leads with investments and makes planning a secondary focus.
So, if you’ve been on the verge of Googling yet another financial question, let’s talk about it. Googling will only give you the answer that everyone gets, regardless of their specific situation. It’s important to talk to someone about your specific needs and goals.
In other words: Let’s put all the players on the field.