I started thinking of this topic the other night while I was riding my bike (20 miles per ride, four rides per week as the summer winds down) and hopefully it will be worth something to you. Then again, I was in an oxygen-deprived state at that point, so maybe it won't be that great. ;-)
The topic was sparked by a comment left by a financial planner on this site (I'm not going to link to it -- you can hunt for it if you like) that basically said, "I'm a financial planner and I know more [about this and other financial topics] than the guy writing this blog." That may be. After all, I've never claimed to be a financial "expert". In fact, I'm anti-financial expert because many of them simply want to make your money their money. However, the comment got me thinking -- what do I really think about financial planners?
So, here is what I think about financial planners:
1. I need a financial planner when I can't handle a financial issue and need someone with a bit more knowledge. So far, this hasn't occurred. I have consulted other advisors on financial issues (lawyer for a will, trusted friend in the business for ins and outs of insurance, etc.), but I've had no need for a financial planner to date. Maybe I'm leaving something on the table by not going to one. However, my philosophy is that 80% of the impact to your finances is achievable by simply focusing on 20% of all the possible financial steps you could take (things like spend less than you earn, eliminate debt, maximize income, etc.). I do these (and many more tasks) pretty well and I'm not sure a financial planner can add much to my results.
2. If I was to use a financial planner, I wouldn't want one who wasn't in better financial shape than I am. After all, why take advice from a person doing worse than yourself? Just like I wouldn't go to a grossly overweight doctor (my doc runs triathlons), why would I want to take advice from a planner who had a lower net worth than I have? Yeah, he may "know" more than I know about the legalities of personal finances, but something's not working if he's not up to my level. Because of my financial success to date, this eliminates most financial planners out there today.
3. Just because someone is a financial planner doesn't mean he is better at managing money than I am. I don't think that because I have a Master's degree in business that I'm automatically better than other business people. It's results that matter. That gets us back to point two.
4. If I ever go to a planner, I would employ someone I see eye to eye with and can relate to as a person and an advisor. Someone like JLP. If I lived in Texas, I'd go to him.
So those are my thoughts. Am I off my rocker? Or is this a decent approach? What do you think?