With the increasing popularity of the internet, managing your own finances has become a hot topic for consumers. Resources on up to date market information, bank rates from across the nation accessible at the click of a button, and cable news shows and commercials teaching investment skills to the public, many people are being lured to manage their money on their own.
But is it safe to manage your own finances? What should you do on your own and when is it time to turn to professionals?
According to Mark Lamkin, founder of Lamkin Wealth Management in Louisville, Kentucky, professionals such as Certified Financial Planners and CPAs should have a large involvement in your financial life.
“Managing money is about managing your behavior…and often times, you’re not the best person to have an objective opinion about yourself,” Lamkin explains.
“Managing money is just about what “not to do” as it is about “what to invest in”…..managing your emotions versus facts is the critical part of investing. Let me put it another way….Tiger Woods is the best golfer in the world. But he still has a golf coach. Find your coach, build a plan, and have well thought-out steps.”
Lamkin says there are things people can and should on their own, including budgeting, debt management and simple banking transactions. He also suggests that long term investors pay less attention to the media – especially in tough markets when it is easy to question your decisions.
If you are going to hire a professional, always do your research before meeting – and especially before you turn over your money.
According to the Certified Financial Planner Board of Standards, there are key questions you should ask before hiring a professional. These include questions such as “What is your experience level and qualifications?” “How are you compensated?” and “Do you have any public illegal or unethical complaints against you?”
While it can sometimes be more cost efficient to manage parts of your finances by yourself, you must consider whether you honestly feel comfortable enough to do so on your own. You must also consider the complexity of your financial situation. Remember that no matter what – you hire – but you also fire. If a professional is not living up to the standards you expect, then “go on take your money and run.”
This is a weekly featured post on Own The Dollar from Sara Peak, a Certified Financial Planner and a veteran of the finance industry. In addition to her monthly “Money Matters” column in Kentucky Living magazine, she also writes about money and personal finance topics on her blog.
Be sure to look for more great featured articles every week from Sara. If you have a question or topic that you would like for her to discuss, please contact us.