Episode 66: What Are the Pros and Cons of DIY Financial Planning?

Published: March 30, 2022 | Updated on: March 30, 2022

Today’s question is, “What Are the Pros and Cons of DIY Financial Planning?”

The Pros of DIY Financial Planning

Let’s talk about some of the pros of do it yourself financial planning. On the top of that list is what you would expect; lower fees. It’s very important to make sure that the fees on your investments are not too high, and we at Johnson Brunetti certainly agree with that.

Number 2 on the lists of pros is control. A lot of folks out there have always managed their investments themselves. They get themselves to retirement. And even though the stakes are bigger at that point in their lives, they still have a little bit of a trouble giving up control of managing their investments.

The Cons of DIY Financial Planning

Now for some of the cons of do it yourself financial planning. At the top of the list is time. Many of the folks that we speak with and work with when they retire or if they’re already retired, want to make sure that they have enough time to live their lifestyle and travel, and spend time with their family and their grandchildren. Right one of the things to ask yourself is, do you have enough time to really be managing properly your assets?

Next, if you’re managing your money yourself, are your options limited as an individual investor? Certainly, you have access to tons of stocks and mutual funds that are out there. But are you limiting your scope of available tools and strategies that might be available to you if you were working with a competent financial advisor?

Another con is that without a financial advisor, you lack the benefit of having a coach. When it comes down to it, if you’re doing things yourself, you don’t have any type of coach or sounding board. Think about some of the most successful athletes and business people out there. Tiger Woods, Tim Cook, the CEO of Apple. Do those folks have a coach? Absolutely, they do. One of the most important things that we help people out with is by being a sounding board and being somebody that they can talk to and keeping their emotions in check. Oftentimes, people get too emotional with their investments, certainly when they’re going down in value and might do things that are against their self-interest. We also help keep the greed that might happen when investments are going up in check to a certain degree.

Finally, is your retirement plan as comprehensive as it can be if you’re managing things yourself? As an individual investor, you might be very astute in regards to researching stocks and mutual funds and exchange traded funds. But are you thinking about all aspects of your financial life, taxes, estate planning, distribution, planning?

Take Aways
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Oftentimes, if you’re working where with a very competent holistic financial planner, they’re helping to make sure that all bases are covered in terms of your full financial plan. Be honest with yourself about the amount of time you have to dedicate to managing your finances. Also, keep in mind the benefit you may get from having a professional financial coach help you navigate your retirement income plan.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download your copy of our guide, “The Value of An Objective Opinion”.

P.P.S. Feel free to submit questions here for a chance to have them answered!