5 Reasons Why You Shouldn’t Manage Your Own Investments

Charlie Brown had Snoopy.

Abbott had Costello.

Batman had Robin.

Even the Lone Ranger had Tonto.

In today’s do-it-yourself culture, it’s tempting to try to manage your retirement investments on your own. After all, you can access all the information you need with just a click of a button, right? Well, sort of. It’s true that you can get lots of facts and figures online, and you could take care of your retirement planning without any help, but you’d be missing out on some major benefits that come with working with an investing pro.

You’d be giving up these advantages:

1. A Bigger Nest Egg

Working with a financial professional could mean more money for you in retirement. In 2016, Ramsey Solutions commissioned a survey of more than 1,000 U.S. adults to find out how Americans are doing with their retirement planning. The study showed that 44% of people who partner with a financial professional have $100,000 or more saved for retirement. Only 9% of people who fly solo say they have that much. That alone is reason enough to find an investing professional who will help you achieve your retirement goals!

2. A Level Voice

Let’s be honest. As much as you’d like to stay calm when the market takes you on a roller coaster ride, you feel queasy and nervous. And if it should drop sharply, that nervous feeling becomes full-blown worry! A lot of people make the mistake of pulling their money from the stock market when those dips and drops take place, which is the wrong thing to do.

A financial pro can keep you from making a huge mistake like that. They understand that what goes down will come back up. They understand what influences the market’s fluctuations and what causes the dips and upticks. They know that over the long haul, your investments will make money. Because of their knowledge, they can provide a steady voice in the chaos.

3. Peace of Mind

Ramsey Solutions’ study also showed that 56% of Americans lose sleep over retirement, and anxiety is the top emotion for those sleep-deprived people. But here’s the good news: Americans who work with a financial professional are twice as likely to say they are very confident that they’ll have enough money to retire. Not only that, but 70% of Americans who feel confident about their future know who to talk to about their retirement questions. Knowing that you don’t have to know it all can help you sleep easier.

4. Seasoned Guidance

Picture yourself at the base camp of Mount Everest. Would you rather trek to the mountaintop with a seasoned guide or try to go it alone? I don’t know about you, but I don’t trust my own mountain-climbing skills. I’d much rather go with the guy who’s been dozens of times and lived to tell about it!

Working with a financial professional is a lot like that. You could navigate the path of investing and retirement by yourself, but investing professionals have taken others on this road and know the way. They live in this world all day every day. They know the ins and outs. They understand the technical and legal jargon. They understand tax implications of different investing options. They know which information is important and what’s just media hype. Their experience gives them an added advantage—and that advantage can help you!

5. Long-Term Strategy

Investing is only one aspect of retirement preparation. A good financial professional understands that you need to take other steps to build and protect your wealth. These pros can refer you to colleagues who can become a part of your dream team—that group of people who walk alongside you toward and in retirement.

Who needs to be a part of that team? Your investing professional, of course. You’ll also need someone who can help with insurance (life, health, auto, home, etc.), estate planning, taxes, and real estate. As you get older and move closer to retirement, your needs in each of these areas will change. You need to have a long-term strategy in place that addresses your changing needs.

The Lone Ranger would also tell you that working with a partner means somebody always has your back. And that’s a good feeling, especially when it comes to your retirement. It can be challenging to keep up with the different elements of retirement planning, so it’s reassuring to know someone else is helping you build and guard your wealth.

The Right Partner for You

When selecting a financial professional to work with, you need to be picky. Not all investing pros are created equal. I want to encourage you to meet and interview several people before choosing the person who will manage your investments. Here are some questions to ask:

  • What kind of experience do you have?
  • How are you paid?
  • What are the charges for your services?
  • What is your investing approach?
  • What licenses, credentials or certificates do you have?
  • How often would I be able to communicate with you?
  • Would I be working with you individually or with a team?
  • Do you have any favorite funds?
  • How do you discover my risk tolerance?

Remember, you don’t have to work with anyone you interview. You need to take your time and find the right fit for your personality, needs and retirement goals. You’ll be working with this person for a long time, so you need to choose someone you trust and someone who is comfortable when you ask questions. If you ever come across someone who talks down to you or who gets defensive when you ask questions, walk away. You don’t want to work with them.

It’s In Your Hands

Even if you have a dream team, and even if that dream team includes your financial professional, you are still responsible for reaching your retirement goals. You can’t find the right people and assume everything will turn out okay. You’re still in charge of your future. You have to stay actively involved in every aspect of your retirement plan.

The Lone Ranger had Tonto, but he still controlled his own future.