Do it yourself. It’s challenging, and it’s fun. So much of the time we seem to be at the mercy of others, a complicated lifestyle, or the system. DIY lets us take control of a small part of our lives, even if it is just that drippy faucet. If the outcome isn’t completely satisfactory, the fact that we tried can give us some feeling of accomplishment.
The DIY movement has touched most areas of our lives. You can find help for home improvement, car repair, computer building and even your health. My doctor gives me a funny look every time I hint that I’ve been self-diagnosing on WebMD or the Mayo Clinic website. Honestly, I’m willing to tackle almost anything as long as I have a YouTube video to guide me.
Nowhere is the DIY movement more prevalent than in money and personal finance. At least three television networks are dedicated to the markets. There is no shortage of printed or audio material from innumerable advisors, authors, radio show hosts, and celebrities. You can buy software to take the place of your CPA. You can get legal documents online, so you don’t need an attorney. You can invest through a robot, or more accurately a robo-advisor. I always think of the movie Robo-Cop when I hear that term. Do you suppose a robo-advisor looks like the robot in “Lost In Space”? Or maybe “Terminator”?
We have a lot of clients here at Chestnut Street Advisors who were formerly DIY when it came to their financial planning and investing. They describe their experience as like learning to drive a car. It was pretty easy to keep the car going straight. When you had to turn, back up, or parallel park the lack of knowledge, experience and discipline really showed. In the end, most of them agree about three things:
1) Their “plan” really wasn’t that well thought out or organized. If you work with an advisor, you have the benefit of the collective experience of all his or her clients. That kind of experience is priceless when it comes to important things like your money. They also have the software and tools to help you see exactly how a decision can impact your goals down the road.
2) They often did not follow through on what they knew needed to be done. None of us want to think we need someone to tell us what to do or where to go, but in fact we employ that kind of help all the time. The voice on your phone’s map feature tells you when to slow down and where to turn. Your calendar sends alerts to your phone and computer to remind you to be at a certain place at a certain time. Good advisors have created processes that insure all important aspects of your financial life are addressed in a timely fashion..
Herb Kelleher said of his days at Southwest Airlines, “We have a strategic plan. It’s called ‘doing things’.” The best plan is worthless if not executed, and lesser plans are of immense value when put into action.
Meister Eckhart once said, "The price of inaction is far greater than the cost of making mistakes." If advisors earn their pay anywhere, it’s in helping you complete those necessary planning tasks. The cost of an advisor can pale in comparison to the cost of indecision, procrastination or neglect.
3) They always seemed to act or fail to act at the wrong time. This is illustrated in the market correction of 2008-2009, when the major markets dropped roughly 50% and then recovered within the span of about six months. I encouraged my clients to view the situation for what it was and to remain invested. I saw fear on their faces and some even cried, but they love me today. Some have friends who pulled out of the market at the bottom and never have recovered.
In my experience, the best advisor/client relationships are those in which the client takes partial ownership of the planning and investing process. Trust me. I don’t help my plumber when I must call him, and he doesn’t particularly want my help. The planning process is different. It’s about who you are, what you want and what’s going on in your life. Your advisor knows the nuts and bolts of financial services, but he or she must be in collaboration with you for the process to work. It’s not the knowledge, but the relationship, that makes the difference.
Cost only matters in the absence of value. Sometimes the value in an advisor/client relationship is hard to quantify. The value comes in the form of intangibles like peace of mind, confidence and self-assurance. You really don’t know how valuable those intangibles are until you experience them. Most of us know how their absence can feel, and we don’t like it.
I have to run. I need to meet a contractor in a few minutes. My home’s exterior needs some attention, and I am not going to DIY this project, no matter how much money I “think” I could save.