“Advice after injury is like medicine after death.” – Danish Proverb
In 2018 I went with a few friends to hike Machu Picchu. The hike took 3 days. The mountain was huge, and the scenery was beautiful. See picture above.
We had a great guide. He had everything prepared, where to go and when, where to stop, told us the history of the places with visited, talked to us about the influences and the culture. Instead of us, coordinating every single detail ourselves, our guide saved us a ton of time and effort. We did not have to think about much. We just enjoyed the view.
On the hike our guide, Julio, made our trip enjoyable as well. We had to carry some of our things, but he organized the arrangement of donkeys and horses to carry the heavy camping supplies and overnight items, that made the trip way more comfortable and safer. We also did not have to think of which path to take. Julio told us which way was best. We just put one foot in front of the other and enjoyed the view.
Julio’s ranch hands would go ahead with the supplies on horses and have everything prepared for our lunch, and dinner, and overnight stops. This was also safer. If one of us broke an ankle, we could use the horses to take us to safety.
Could we have hiked that trail alone? Maybe, but it would have been more dangerous.
Same goes for retirement planning. Some people take the risk and go it alone. Others prefer to the comfort and stability of having a guide.
Another way to say it is, some people buy a boat, drag it to the marina, put it in the water, pack their food, map out where they want to go, and drive the boat themselves. Other people, simply hop on a yacht, tell the boat captain where they want to go, and enjoy the view.
Which do you prefer?
But Jeremy isn’t a yacht expensive??
You may be able to ride the yacht and have it pay for itself. HOW? Vanguard did a study on INVESTOR returns vs INVESTMENT returns. The difference meaning, that an investment can yield let’s say 10% return over a one-year period, but the investors return can be more or less, depending on when they put their money in and how much they added. For example, if they bought low and then sold high, the investor could do better than the index. Conversely and much more common, if the investor bought high and sold low, their own return would be lower than the index. See figure:
A good financial advisor could potentially, save well over their expense, by preventing the client from making mistakes. Vanguard states that this “behavioral coaching” along with other benefits, could save the client as much as 3% per year! Gives new meaning to the old saying, “Don’t be penny wise, and pound foolish.”, doesn’t it?
Let me know if you have questions.
On the lighter side, Elliott is taller than me now and he reminds me daily…
Hope all is well with you and your family,
Jeremy Finger, CFP®, CIMA®, CRPC®, CPFA
Founder & CEO
Wealth Management Advisor
Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information. My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.
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Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.
This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.