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Financial Planning Dangers of Doing It AloneSubmitted by Paul B. Miller, CFP on August 13th, 2018
The art of financial planning might not seem too difficult to master. After all, if you want to retire with enough money to enjoy better golden years, seems like all you need to do is save a certain amount of money. However, there are many dangers in completing your own financial planning, not the least of which is the belief that financial planning is only about saving money. If you do not understand the intricate ins and outs of financial planning, you could find yourself in the same situation as many other Americans. CNBC notes that the majority of Americans have less than $1,000 saved and half have nothing at all set aside for retirement.
Rather than risk becoming one of these millions of Americans without enough, or any, retirement funds, skip taking the do-it-yourself approach and learn why it is important to have an experienced financial advisor or planner at your side.
One of the many dangers involved in handling your own financial planning is the focus you take on saving. Too many people approach retirement planning by focusing on one aspect of their situation at a time. It could be too sharp a focus on getting raises or promotions at work, or simply focusing on hitting a certain number for your retirement plans. The reality is that the choices you make regarding one aspect of your life and plan could have a negative impact on the other aspects of your financial plan. By working with an advisor or planner, you have a partner who can keep the wider path in view at all times to ensure all aspects of your life and financial plan matchup.
Allowing Emotion to Cloud Judgement
It is far too easy for people to let their emotions move their mind when it comes to making decisions. It could be as simple as a tip from a friend that leads you to make an investment that is risky, or as complex as believing that you can have your dream Caribbean home. These decisions can both be emotionally driven, and with a financial planner's help, you can determine the reality of hitting these goals without emotion playing a role in the decision-making process.
Avoid Conflict with Loved Ones
If you have a spouse or partner, the love you share can easily be strained by financial issues. When your financial attitudes do not match up, arguments can come up over the smallest things such as monthly spending or lack of savings. In fact, Investopedia points out that financial personality is one of the leading causes of financial stress that kills marriages and strains relationships.
Lack of Experience
Last but not least, your lack of experience as a financial planner is the biggest danger you face in handling your own financial plan. Professionals that earn Certified Financial Planner status have completed an intense course of study in college/university with a curriculum that is approved by the CFP Board. The courses cover all major areas of financial planning and then must pass a two-day exam which boasts only a 55-60% pass rate. Before these individuals can even use the Certified Financial Planner marks and name, planners must also obtain three years of experience.
At the end of the day, your financial planner at Indian River Financial Group has the vision, financial attitude, and experience that separates the individual from the money. This enables planners to help you build a financial plan that is safe, steady, and capable of securing your future.