We’ve all heard the saying, “Practice makes perfect”, before. It tends to be true whether you’re talking about public speaking, golf, playing the drums, or becoming a great cook. It’s been said that most successful individuals have failed more times than the novices have even tried. The recurring theme is to keep showing up and learning from your mistakes/failures.
I couldn’t help but be reminded of these concepts when reading a recent post by Ben Carlson of A Wealth of Common Sense. Ben discusses the worst part about big financial decisions, and refers to Richard Thaler’s Misbehaving: The Making of Behavioral Economics. Ben summarizes Thaler’s points writing:
“Thaler tells us in the book that in order to learn from an experience two conditions must be met: (1) frequent practice and (2) immediate feedback. With low stakes decisions we all get plenty of opportunities get things right because everyone has to make minor moves on a daily basis that have a small impact on their finances. It’s those big decisions — buying a house or a car, savings for retirement, paying for your children’s college education — that we get very few chances at perfecting. Yet those decisions will have by far the biggest impact on your finances.”
It seems unfair, doesn’t it? We can have all the practice we want making peanut butter and jelly sandwiches or mowing the lawn, but saving for retirement? One shot. No pressure or anything.
I’m not saying that finding a good fee-only investment advisor will solve all of your retirement planning issues, but it might help. This is something we get to help people do over and over again. While we all (personally) only save for retirement once, advisors help individuals save for retirement every day. This daily practice brings the lessons and wisdom you would expect to come along with it. Unfortunately, nobody has it all figured out, but there are many experienced and intelligent advisors out there willing to help.
So if you’re worried about making big financial decisions on your own and would like some guidance, do a little research. Hopefully you’ll be able to find an investment advisor who’s right for you and your personal situation.