GQ magazine just published an article bashing the financial advising industry (“The Personal Finance Industry Is a Scam” ). Given my profession, it is reasonable to assume I would have issues with a title like that – and I do. For example, the author claims only the rich can work with an advisor. I strongly object that comment. However, once I got over the wildly inaccurate generalizations and lazy stereotypes, I realized the author’s thesis has merit. In my opinion there is a lot of unhealthy advice given by financial “experts” (personally I like to use the term “talking heads” to describe them).
It seems like every time you watch one of these gurus on TV, their advice can be simplified into one of two things: never spend money, or work until you die. Technically this advice is correct – if you never spend your savings then you will die rich. The problem is, who wants that life? This advice brings to mind the line from Don Henley’s Dirty Laundry: “When it’s said and done we haven’t told you a thing.”
But is that your true goal? Just like “retirement” is not a goal, just a point in time, money is not a goal, just a tool. It is the things we want to do in retirement that are our real objectives. Very few of us want more money just for the sake of having more money. We work and save so we can reach our goals.
Think of these possible goals:
- Enjoy life while you’re “young”
- Make sure your children have opportunities to be successful & happy
- Have a comfortable life with your spouse.
Personally, my primary goal is the last one. However, the thought of denying myself beautiful, rare strip steaks for the next 20-25 years fills my heart with dread (filling my heart with cholesterol is much more appealing). I understand that my fondness for steak means I may have to work longer or have less money saved. And this kid is all right with that choice. Yes, there are trade-offs and choices that need to be made to reach your goals, but the idea of abstaining from any enjoyment for next 20 years appeals to very few of us.
The true purpose of working with a financial planner is to get very clear on your goals and how to make them happen. When you hear the advice from talking heads, ask yourself this question: What are the odds that someone with a target audience of millions will have the perfect solution for my unique situation? Even more dangerous, they might be making a shocking statement just for the purpose of getting a headline.
Your goals deserve more respect than that!
Kevin focuses on helping people with retirement income planning. He is concerned that too many people become overwhelmed as they shift from building their retirement savings to using their retirement savings to support their desired lifestyle. By engaging in a robust planning process, he aims to lessen the financial fears we all have after we end our careers. Learn more about Kevin
