Steven here from munny.club, a weekly newsletter where I share a different perspective on personal finance concepts. If this doesn't interest you or you don't find it valuable, you can unsubscribe at the bottom of this email. If you have feedback, just shoot me a reply!
Today's note will be surprising for people who know me.
Last week I mentioned that the biggest driver of your financial performance over the long term is actually your behaviour in response to market change, not your portfolio. It’s a hard reality to face and one we try to deny because changing your portfolio is much easier than changing ourselves. If that's the case, what can we do about it?
If you're familiar with anything written about habits, you will recall they talk about designing systems to help you perform instead of trying to go against the grain of human nature and try to power through. This is why companies like Wealthsimple write so much about how you should react to the market and have designed the app in a way to not make immediate changes too easy. While willpower may or may not be limited, why take that chance when there is an easy way out?
So what am I suggesting? A financial advisor could be an asset for you, and you should seriously consider it. You don't need to take their advice when it comes to investments, but you need to make sure you follow your own. The job they will fulfill is a division of your emotions from actions. They will ensure you stick with your financial plan and check your behaviour for you. This may be an unconventional relationship with an advisor, but it's the only one I would recommend.
I think about the decision fatigue I personally experience when it comes to exercise or even something as simple as what to eat. I think I would hate cooking less if I was just told what to make each day. The same goes for a workout, coming up with a circuit is the worst part for me, which is why I am willing to pay for services that do it for me. That's not to say I couldn't work out on my own if I had to, just that I'd rather not.
So this advice isn't for everyone; there are lots of people who manage to succeed in managing their own money and temperament. But as with all things, that's only true until it isn't. I encourage you to consider it.
Full disclosure: I don't use an advisor as my ego tells me I can power through it.
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