Recently I gave you 7 reasons why should never hire a financial advisor.
Today, I’ll give you the only reason you should:
Your brain.
Specifically, the right side of it.
You see, that side of your brain controls emotion, the strongest of which is the survival mechanism that motivates you to avoid pain and seek pleasure.
No one likes pain, but if you exercise you understand that sometimes what doesn’t feel good is actually beneficial.
Same with dieting and a number of medical treatments.
Entire books have been written on this subject. It’s called behavioral finance.
Simply put, we typically act in ways that are contrary to our best interest when it comes to matters of personal finance.
A good financial advisor can do a lot of things, but the most important thing is help you to counter the survival mechanism when it kicks in at the wrong time.
You know you should buy low and sell high. But when markets tumble, people so often do the opposite.
It’s been proven that diversification is the key to stable, long term success. And yet, many people will abandon this strategy to chase the “hot” asset class. Remember Bitcoin?
A good financial advisor will help you to do the one thing no one can do for himself: balance the emotion which makes you human with the logic required for long term financial success. For more on self-destructive behaviors, check out this article: https://jarredbunch.com/bad-investing-behaviorial-finance/.
Best regards,
Dan Cuprill, CFP®
PS: If you want to talk to an advisor for the right reason, click here to schedule a 15-minute call with me.