Discuss Latest WCI Blog Post: Can I Be My Own Financial Advisor? 8 Reasons You Can and Should Be

[8arclay]

Got it, thanks for the response. I would suspect most here could navigate those things appropriately, just wanted to see if I was missing something

[Steven Podnos MD CFP]

Some common pitfalls are as mentioned-being sold bad products like many annuities and cash value life insurance (for most people). Also not being diversified, and succumbing to the lure of rapid gains (crypto anyone?)
It is totally correct that designing and implementing a good asset allocation is not hard. What is hard is sticking to it and not being pulled away by fear OR greed. Paradoxically, the hardest time is when things are going well-everybody making money in real estate and the stock market either stirs greed or false confidence in one's ability to weave in and out of markets.
But a good advisor is there for so many more things that come up-how much home to buy, new contracts at work, side business ventures, asset protection, retirement plan design for independent physicians, realistic spending in retirement, educational planning and much more. All of these have potential pitfalls.

[Lordosis]

Any physician is capable of DIY investing. Basically anyone smart enough to graduate high school has the brainpower to do it. It is the motivation and dedication that comes into play. It does not take a ton of time to manage a portfolio but learning the ropes might take a while but still not a crazy amount of time. It makes way more sense to pay someone to clean your house or mow your lawn for the sake of saving time. If you find it boring who cares! We do lots of things that are boring. We are adults! Suck it up!

[Lithium]

The most common mistake I see many of my friends and colleagues make is choosing a bad advisor (or salesman).

[JBME]

But for us here, Im also curious about our common pitfalls.

No evidence, but I strongly suspect the most common pitfall among forum users is they worked too long/saved too much

[Kennyt7]

Many probably think they are smart enough to beat the mkts and get in trouble with risky investments
We all know that a diversified portfolio of Index Funds is the Winning Game. Everything else is a LOSERS GAME

[billy]

Genuinely curious, what are the most common pitfalls you see?

I think there's a vast gap between those of us posting on these forums, and the general physician community. So I'd be interested to hear more about the common pitfalls of those of us with this level of financial acumen. For the general physician community I can think of many pitfalls, including using whole life or mistaking insurance salesmen for advisors- for those with no interest in finance, yeah a good financial advisor probably saves them from many mistakes. But for us here, Im also curious about our common pitfalls.

[8arclay]

We end up working with many DIY physicians as they approach retirement and see many mistakes that resulted in losing a great deal of investment capital throughout their professional lifetimes.

Genuinely curious, what are the most common pitfalls you see?

[Steven Podnos MD CFP]

Jim, I think you greatly underestimate the amount of work and study that goes into being able to be a good financial advisor for one's self. I have no doubt you have hundreds if not thousands of hours of study and experience yourself having read your books and hearing you talk.
The overwhelming number of busy physicians do not have the interest, aptitude, or time to pursue the work of being a good advisor (I practiced pulm/CC for over 25 years and have now been doing fee only planning for 20). I have spent 20 full time years becoming competent at financial planning (which has its own science and history) and still have much to learn.

We end up working with many DIY physicians as they approach retirement and see many mistakes that resulted in losing a great deal of investment capital throughout their professional lifetimes.

Certainly physicians are smart enough to do this work, but do they have the time or interest? Can't they be their own lawyers and accountants also?

[The White Coat Investor]

Financial advisors cost a lot of money. Learning to be your own advisor may save you time, money, and hassle. Here are eight reasons why.

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