Should I consult an expert or DIY my finances?

We have all heard the saying, “You gotta spend money to make money”.

It’s an age old expression but what exactly does it mean and how can we apply the concept to better our financial situations and ultimately our lives?

On the surface this saying seems quite simple and the concept an easy one to digest.

Traditionally people use it when referring to businesses and their need to purchase goods, services, equipment or hire staff to further the growth of the business. Each decision contains its own risks and requires the commitment of capital prior to receiving any benefit.

When we think of this in terms of our personal situations the decision set is slightly different but the concepts are exactly the same and the stakes equally as high. The most successful individuals are acutely aware of this and use the concept to their advantage.

Should I consult an expert or DIY my finances?

Take financial management as an example, we often think that the best and most cost effective way to deal with it is to do it ourselves.

We need to consider the opportunity cost of attempting this herculean task on our own.

Not only are we taking time away from what we do best from a professional perspective (think per hour cost of our time to research, manage and execute any decision) but we are essentially taking time from our most important relationships with our partner, family and/or close friends.

On the other side of the coin is the cost of making a poor uninformed decision. (This can be extraordinarily high from a capital and emotional perspective!)

If you were confronted with a law suit would you complete a law degree and attempt to defend yourself?

If you were feeling ill would you complete a medical degree and attempt to diagnose your illness? It stands to reason then that if you’re not where you would like to be financially, you probably wouldn’t complete a finance degree! There’s really no need to manage your financial situation yourself.

The most successful people understand that they are their best asset

They focus on their area of expertise and outsource the management of the activities outside of their area of competence. This ensures that:

  1. They get it right the first time.
  2. The issue is managed on an ongoing basis without them thinking about the intricacies.
  3. They actually benefit multiple times the money they pay for the service.
  4. They are not wasting their precious time!

Next time you are confronted with a decision to manage a complex issue outside of your area of competence ensure you ask yourself “is this worth my time or should I consult an expert?”

Article written by Jason Reynolds, Strategic Financial Adviser

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Disclaimer: Information contained within this article is of a general nature. Do not be rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.