Although I don’t typically struggle with self-confidence, I’ll readily admit to the following facts: I am not a licensed investment banker, insurance salesman, accountant, loan officer, doctor, lawyer, or personal trainer. I would probably argue that I could do a portion of some of the jobs above, but if you had any sense about you that argument wouldn’t last too long. And while there are many things I’m pretty good at, I wouldn’t consider myself an expert in more than a couple of fields.
Why, then, would I assume that I am the best person to handle those jobs for my family – all on my own? I can’t possibly know enough about the case law, current accounting practices, most worthwhile insurances, and hottest investment funds that would put our family in the best position possible to succeed. Taking it a step further, I’m definitely not comfortable in settling for mediocre or negative positions either. So, to do the absolute best for my family, I realized early on that help was exactly what I needed.
I needed to work with some knowledgeable and trustworthy professionals in each of these fields to make sure we were in the best possible position to succeed.
This is financial pillar #7 for us millennials
Please click on the following links to view the introduction post (We had a huge financial crisis, now what?), or preceding posts in this series. Thanks for reading! I’d love to hear your thoughts in the comments section below.
A bit on what you’ll see below
In this article, I’m going to focus on which fields I find most relevant to get the best help out there, but it doesn’t stop there. When one wrong decision in who to trust can literally cost you your net worth, how do we determine who is trustworthy and what can I do to find that information out (preferably before I trust them with my life savings)? And for the icing on the cake, I’ll let you know what I do to nurture some of these relationships to the point where these professionals can be the type of people your kids are so comfortable with they exchange hugs when in the same room.
First – how to start then grow these relationships
I talk to some of these people enough that I’ve been able to learn quite a bit about them. Some I’d even consider good friends. When huge life and financial decisions are at stake, I’d rather rely on a friend than a stranger. Take the time to cultivate these relationships.
Here’s a quick example of what not to do
Monica and I were fed up with renting. She had had enough of apartment living and wanted to grow a few roots while I kept punching holes in the wall every time I’d send a rent check and realize $0 went to the principal (exaggeration – can’t give ‘em an excuse to keep the security deposit. Am I right??). We had savings burning a hole in our pockets coupled with an escalating desire to own. All of which led to no patience.
We walked into an open house (one of the first since we had become serious about buying) and struck up a conversation with the selling agent. This lady was personable, friendly, and seemed to know what she was talking about. What’s more was that we really loved the house. Let’s forget about the fact that it sits 30 miles from our current home, and in an area, we’d come to find didn’t fit our desired location. But, no worries, our itchy trigger finger fired a round from our pre-approval letter and the offer was made.
“Don’t worry,” the agent said. “I represent both sides of a deal often…”
I’ll let you imagine how the rest of this story plays out. Sparing the details, we paid about $2k in fees toward the school of hard knocks, and that agent’s name is one Monica and I can’t think about without raising the blood pressure a good 10-20 counts. That deal almost went through, but the only thing that saved us was that the house didn’t appraise for the agreed upon sale price… Thank God.
What we did wrong:
We rushed into one of the biggest decisions of our life with no research, no plan, and no sense. It’s embarrassing and we’re lucky, but I’ll guarantee that never happens again.
This is an example I’m more proud of
After the home buying debacle above, I called at least a dozen real estate agents until we found the one. Diane was recommended to us by one of Monica’s brothers after his experience with her, and the recommendation was spot on.
We reached out, met for coffee, talked about what and where we’re looking to buy so that she could help us to the best of her ability. We spent a ton of time together over the next few months as Diane learned more about the open floor plans we loved and the crown molding we could do without.
I remember distinctly the day she called me to say, “I have a house you two need to see. It’s not on the market yet but the owners are preparing to sell and I think this one fits you guys to a T.” …She was on vacation in Colorado. Skiing with her family. That’s the house I write this post in today.
In the few years since our home buying experience, I’ve recommended clients to Diane, kept in touch on occasion, and met one of her daughters at the above brother-in-law’s wedding. “My mom has told me so much about Mike and Monica,” was her introduction.
What we did right:
Research, patience, and a lot of communication. After all of that, we built a relationship in 6 months that has since benefited both parties and still persists today. Diane, if you’re reading this I want in on the Pelotonia this year!
Just because they’re your friends doesn’t mean you have to pay them for the rest of your life
Independent of the field of expertise, the professionals you hire and build relationships with should educate you as part of their process. This means that as your own experience level grows you should rely on them less often.
(Related post – Learn to live below your means (financial pillar #5) – Here I share the story of how not learning from an expert cost us close to $22k)
Of course, there is a spectrum of knowledge and skill level you’ll have across the different categories, but that doesn’t mean you can’t work to improve in each area. While you may get to the point that you’ll take the reins of your investment portfolio, you may also remain sitting next to the lawyer in the courtroom – and only speak when directed to do so. That doesn’t mean you can’t learn why you’re saying what you’re saying, though.
Learn from these people and ask tons of questions. Sure, they’ll screen your calls after a while, but they literally work for you. And if you’re being respectful of their time and learning in the process, soon you’ll be able to talk shop on a level close to theirs. When you get to the point of bouncing ideas off of each other, the professional calling the client is less of a chore and more of an efficient and constructive conversation.
Besides, if you’re not educating yourself then you’ll be stuck relying on others forever. As time moves forward, the goal should be to advance your ceiling by learning from the experts. By just taking the advice and paying the fee, you’re neither understanding the complexities of your situation nor growing in abilities. That doesn’t put you in the best position to succeed. So, pick up the phone and ask a few educated questions.
You’ll know you’re there when you know their advice before making the phone call…
Don’t feel obligated to go with the friend that happens to be an insurance salesman… just because he’s an insurance salesman.
If you have a friend, make sure they’re competent in their field. That deserves to be re-read… Go ahead.
If you don’t have a competent friend in the field, then slowly cultivate a good relationship. Start by dipping your toes into their pond and evaluating how they do business and advocate on your behalf. There are plenty of doctors in the hospital and only one of you. They can be expendable – you, on the other hand, are not.
Second – what professionals we need and when
Insurance specialist –
Unless you’re independently wealthy (and in that case, you’ll probably have more of a need), you can’t afford to not have insurance.
(Related post – Protect your income)
You read that right: you can’t afford to not pay some of these premiums. If you break a leg without health insurance, not only could you be subject to jail time in today’s world, but also you will be receiving some hefty hospital bills. A car accident without car insurance? Good luck. Someone breaks into your apartment, steals the jewelry and the flat screen, and no renter’s insurance? Thanks for the donation.
Some of the main options –
Renter’s, homeowners, health, disability, personal articles, auto, life, malpractice, and umbrella, to name a few. Deciding exactly when, if, and how to buy these policies, and how much you’ll need for coverage is more than overwhelming at first. You’ll want a professional that explains the benefits and the drawbacks to the different policies. They should cover how the premiums, coverages, and payouts will impact your family. They make money by selling you policies, yes. But the best would rather not sell you the coverage you don’t need or that would hinder your progress.
Banker / Investor / Financial Planner –
If budgeting, saving, and planning for retirement are weaknesses in your financial acumen, consider enlisting the help of a financial specialist. More than just telling you how and what to save, these professionals can help you pick the best investment vehicles to keep you covered in case of emergency and earn you maximum gains in the long term.
Some financial planners charge fees based on a percentage of money managed while others charge a flat rate. Know the difference, and what it will cost you up front. Someone who boasts a 10% return but charges a 4% commission only earns you 6%. That can mean huge changes in your expectations. Our financial advisor charges a flat rate for his services, and that’s what works best for us.
Another thing to consider is philosophy. If your goals don’t align with where an advisor wants to take you, or most importantly how you’ll get there, the relationship could become toxic. Make sure the path is clearly defined at the onset before you get too far ahead of yourself.
This one goes without saying but without your health, none of the rest of this really matters. We’re not on a first name basis with our general practitioner, but I knew she had our best interests in mind when she provided me with her personal email address to update her on my recovery progress while traveling overseas. Blood levels were checked, communicated, and orders were given all because she was willing to go the extra mile for us. We’ve since referred multiple families to her practice.
You’ve probably read about how oral health and overall health are linked (Mayo Clinic), and that poor oral health can lead to increased risk of cardiovascular disease, dementia, respiratory infections, and diabetic complications. If not, feel free to start learning more about the connections.
Based on recent conversations with our family’s dentist (Monica – my wife), I’ve heard that often times people overlook dental health until the situation has regressed to the point of a total loss. And although there are procedures to help people in those situations, we are strong advocates of regular cleanings and checkups to maintain great oral health – which is shown to be tied to good overall health, self-confidence, and professional success.
Another reason the dental office should be in your virtual phone book? Dr. Monica now tells me she has identified cases of high blood pressure in patients that would not have otherwise known. This was possible because of the increased frequency of dental appointments compared with other health professionals. Those patients were able to seek out their needed care because they sought dental treatment initially.
One more thing – don’t buy into the hype that a dental chair is a scary place. Regular appointments that educate patients are great steps toward reducing the amount of cleaning needed by the hygienist. On top of that, our dentist is the nicest person I’ve ever met (you’re reading this, right honey?).
Personal experience has shown me there is a drastic difference between enlisting the help of an accountant at tax time (from one of the tax mills that pop up every spring) compared with growing a relationship with an independent or industry specific accountant.
I am currently working on an article that will touch on more of this topic (how we made a few tweaks to our personal finances that netted huge gains at tax time), but for now, I’ll say that the expertise of a knowledgeable accountant can’t be overstated.
If waiting until the end of the year, tallying everything up, and seeing where the chips fall is your strategy (it had been mine in the early days), then like my past self, you’re missing the boat. And probably a large sum of money that could stay in your accounts. Learning how to keep the money you’ve already earned is much easier that learning how to make more money another way.
I’ve heard the quips, and probably so have you. Lawyers aren’t always held in the highest regard… But I think maybe that’s a bit misplaced. Also, if you ever find yourself on the wrong end of a lawsuit, in the position to buy a business, or in court for any reason, I’d posture a guess you’d want to have someone that you trust arguing and advocating on your behalf.
One thing we’ve recently found is that good lawyers don’t come cheap. I hope to have more about this experience coming after a few months, but for now, I’ll say that when you’re paying around $300-$400 / hour, I’ll grant you the right to actually get along with the individual. If you make the wrong move and hire someone who is in over their head or even someone who is competent but that you can’t stand, things can get bad quick. Especially when you’re paying such a high rate. I don’t know about you, but I expect a lot in return for that price.
We’re fortunate to have worked with a couple of great attorneys and one or two that we don’t think as highly of. But, knowing that legal fees have become part of the cost of doing business, it’s vital to find someone who knows their business and who can educate you in the process. They should also communicate efficiently… At $35 every six minutes, I tend to skip the small talk.
Someone who can build/fix things –
If you’re “handy” as some in my family would say, then can I have your phone number to pick your brain when things pop up? I thought I knew my way around a toolbox until we moved into our house. When a few shingles blow off the roof, a water spot on the ceiling, a couple bathroom fixtures the need tightening, a wobbly toilet, and the power goes out in the middle of a rain storm (hello sump-pump), the flat rate $100 visit charge becomes a bit ridiculous.
You may be happy to know I didn’t call for the bathroom fixtures. The toilet was related to the water spot, the shingles were covered under our warranty, and luckily the power came back on before things got too crazy (battery backup now in place).
The point is that I’d love to have handled all of this stuff independently, but truth be told, I’m learning on the fly. At this point, I would probably pay someone to bring me to their place to help them fix something just so I could learn a few things. I didn’t value these skills all that much 5 years ago, but I see now that having the ability to use your hands to make and fix things is one of the most rewarding tasks us guys can conquer. And until you’re able to do so independently, it’d be ideal to contract the help of a knowledgeable friend.
Professionals in these fields will have their hands in some of the biggest decisions you make as an individual, a family, or as a business owner. That is why it is so vital to make the right choices in these areas. I’m talking about A) whether to seek help and the first place and B) who to rely on when you decided you need some help. The wrong move can mean disaster while the right decision after (sometimes) months of experience and analysis can lead to further success and stability for you and the fam’. So take your time, ask questions, and make an informed decision that advances your future.
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