“In life, you need many more things besides talent. Things like good advice and common sense.” Hack Wilson
In the financial world what constitutes good financial advice may not be seen straight away.
Recent news from the banking royal commissions and our increased access to information it is not hard to understand why people rely on family and friends or simply go it alone.
Usually, when we read about a financial guru we seem to isolate themselves as an oracle and the original source of that advice and therefore their success is purely self derived.
When we seek out answers, we look for definitive answers in which we don’t consider the moving parts of our lives. Where possible we try to abbreviate and spend as little time possible to achieve the best possible outcome with the least amount of money spent.
This may work in many other professions where there may be natural constraints or other concepts which can be relied upon, in the world of finance it is usually much more complicated.
In a recent mybusiness.com.au
post in which Andrew Aravanis a Bankruptcy Trustee shared the top 10 professions that are more likely to go bankrupt according to his data. These are:
- Managers (sales, marketing, PR, business administration, ICT)
- Machine and stationary plant operators
- Road and rail drivers
- Business, human resource and marketing professionals
- Health professionals (nurses and midwives)
- Design, engineering, science and transport professionals
- Construction trade workers
- Other labourers
- ICT professionals
- Electrotechnology and telecommunications trade workers
Although, this may not be definitive it does reveal that regardless of your education, status or income you are not immune to poor financial outcomes. In fact, in many of the professions listed above their income would be well above the average Australian and the educational requires extensive.
What gets unsaid about financial advice, is the separation between the information gathered and the decision making process.
Information is king, and it shapes how we investment. More importantly, we trust that the information is correct and verifiable and for the most part it is …. from a certain point of view.
Many of those at the top of the financial game, have vast infrastructures in place to ensure they get accurate and verifiable information in a timely manner. Additionally, those that present opinions and ideas are vetted.
They wont just be analysts either, it would be a diverse group of individuals experts including law, tax, accounting and subject matter experts.
All of this enables them to be the best decision makers possible by exploring all of the alternatives on the table, and selecting the right decision for them. They extrapolating their own point of view. Yet, this does not immune them from loss, sometimes loss affects everyone and they lose less than the rest of us.
For now, we can ask ourselves the following questions:
- If I just read the financial section of the news what is the difference between that and the racing form guide? What about advice from Uncle Bob or my friend Suzy?
- If I don’t ask critical questions of those offering advice, how good is that advice?
- Do I have an infrastructure in place to help me make decisions?
- What could go wrong with my investments? What are the consequences?
- If I have outsourced my financial decision making, have I really gained control of my life?
Its always easier to be proactive and take the time to ensure you are on the right path. Call our office on 03 9846 6542 or email: firstname.lastname@example.org
General Advice Warning
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on the author’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.