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Should You DIY Your Financial Planning?

6 June 2024

My TED Talk on DIY Financial Planning

 

I was recently asked to speak on whether I thought a person could create an effective Do-It-Yourself (DIY) financial plan or is it necessary to hire a professional to help in this important area of their lives.

I welcomed the opportunity to share my T.E.D. talk on financial planning with them.

As you may or may not know, the popular TED Talks run by TED Conferences, LLC enlist the top experts worldwide to cover topics in Technology, Entertainment, and Design.

My T.E.D. talk has nothing to do with these talks…

My talk covers what I call “Time, Expertise, and Desire (T.E.D.): The Triad of Effectiveness”.

I believe if a person has all the elements in my Triad of Effectiveness, they can be effective in their financial planning, or any endeavour they choose.

 

1. TIME

Time is our most precious resource.  How we spend our time is directly correlated to the success we achieve in our lives, our relationships, and our health.

When my wife and I bought our first house, prior to having kids, we had little money but tons of time to do renovations.  So, we bought the worst house in the best neighbourhood (that we could afford), and invested our “free” time painting, drywalling, and whatever else needed to be done to make the house livable.

This was time well spent.  When our kids came along and we started to outgrow this house, we recognized a nice profit from our labour and began our climb up the property ladder.

Now, with busy careers and kids in various stages of young adulthood, we choose to spend our time on fun family activities, and we outsource the less fulfilling but necessary jobs to professionals.

 

2. EXPERTISE

Like most topics, the interwebs can provide you with the knowledge you need to DIY your financial planning.  You can also learn about fixing a car, building a rocket, or surviving a zombie apocalypse.  Amazing, huh?

To have Expertise though, you need to combine Knowledge with Experience.

Experience in financial planning doesn’t necessarily mean you need 20+ years of helping hundreds of families achieve their financial goals (humble brag?).  However, you should have some experience with setting goals, tracking your cash flow, managing your debt, and understanding basic tax rules.Action changes

Investment management, tax planning, and cash flow are interconnected, ensuring you have a structure and process in place for your planning is also important.

I could find hundreds of YouTube videos on how to fix the brakes on my car.  And I do own a bunch of wrenches that I’ve used before.

If I’m planning a cross-country road trip with my family, I’m taking my car to a licensed mechanic I trust prior to us heading out.  I don’t want to be thinking if I remembered “righty tighty” as we’re going over the Rockies.

 

3. DESIRE

Self-help author, Napoleon Hill said, “Desire is the starting point of all achievement.  Not a hope, not a wish, but a keen pulsating desire which transcends everything”.

OK. That might be a little strong. But, not having the desire to do a job well can lead to procrastination, increased risk exposure, and missed opportunities.

Think of things you really enjoy doing.  You’re motivated to put forth your best effort and the outcome is usually close to ideal.

Now think of tasks you don’t like doing.  (For me, it’s picking up dog poop in the backyard or painting a room in the house, but I digress.)  I can think of dozens of excuses to postpone these jobs or “accidentally” forget about them.

Financial planning isn’t a 24-7-365 job.  It is, however, a dynamic process that can be affected by unexpected events.  Therefore, to be most effective and opportunistic, you should be aware of where you are in your planning process.

 

CONCLUSION

Any skill can be learned.

Financial planning isn’t brain surgery or rocket science. But it does take a level of commitment to do it well.

An effective DIY financial planning strategy can save you and your family thousands, or in many cases, hundreds of thousands of dollars, thus improving your chances of reaching and exceeding your financial goals.

So why don’t more people DIY their planning?

The traditional financial services industry (banks, credit unions, mutual fund companies, etc.) would like you to believe that you couldn’t possibly manage your finances as well as they can. They have spent millions of dollars in making you believe their salespeople advisors and products are the only solutions to your financial needs.  The reason they can afford to spend these millions of dollars is because of the high fees they charge their customers to keep them in the dark.

In my early years in the industry, I was scolded for being too transparent with clients.  I was told by a manager, “It’s important to let clients know we have the ‘black box’.  But never let them know what’s in the black box, or they’ll realize they can do it themselves.”

If you feel you don’t have the time, desire, or expertise but want to have more control over your finances, it’s worth considering enlisting the help of an advice-only or fee-for-service adviser (see Services).

Unlike a traditional salesperson financial advisor who works for a large institution, an advice-only or fee-for-service adviser is independent and does not sell you products.  They are there to guide and coach you in the areas of time, expertise, and desire you find yourself lacking, so you can feel empowered to DIY some or all aspects of your financial planning.  For example, when to start taking CPP and OAS is a common question and answering it correctly, or incorrectly, can have significant impact on your retirement (see my recent post on this).

Working with a professional is not an admission of defeat but rather a strategic decision to ensure the best possible outcome. In delegating to those with the right combination of time, desire, and expertise, you not only stand to benefit from a job well done but also free yourself to focus on areas where your own Triad of Effectiveness is strongest.

Whether it’s managing your finances, fixing your car’s brakes, or saving your neighbourhood from zombies, recognizing when to call in a professional is a skill in itself — one that can lead to greater efficiency and success in all areas of life.

Just because you want to DIY your financial planning, doesn’t mean you have to do it alone.

To get help creating your own financial plan, click on David’s calendar to schedule a free discovery call.

P.S. I’m putting together a video series to help people with their DIY financial plans.  If you have any topics you’d like me to cover, please send me a quick note either by email or through my contact page.

Connect with David on LinkedIn.

Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment and tax-related decisions. You should seek independent financial advice from a fiduciary, if possible.

 

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