You Don't Need Financial Advisors
Be your own advisor.
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Read time - Less than 5 minutes
Learning about investing can feel daunting, especially when you're juggling a busy life.
It's easy to think, "I'll just hire a financial advisor, they know what they're doing."
But here's the thing: most financial advisors don't do what’s best for you.
In today’s newsletter, I will cover why most young adults don’t need financial advisors and the 5 reasons you should manage finances yourself.
Think about it this way: Imagine you have $10,000 to invest.
A financial advisor might charge you a 2% annual fee helping to invest your money.
That means they're taking $200 from you every year, just for "managing" your money.
Over 50 years, that adds up to a whopping $179,900 in fees!
You're essentially giving them a huge chunk of your potential returns just for them to...well, what exactly are they doing?
Many advisors rely on complex strategies to "beat the market," but research shows that most don't succeed.
Here are 5 reasons why you should manage by yourself and be your own advisor:
1) Financial advisors don’t always do what’s best for you
They may claim they want the best for you, then proceed to…sell you the most expensive plans.
I’m not saying don’t engage one or don’t insure yourself, what I’m highlighting to you is that they often overcharge and it’s always the client (you) who’s losing out.
Remember the fees part? That’s what many young adults don’t know.
2) Index funds are a simple, low-cost way to invest
They track a specific market index, like the S&P 500 (500 of the largest companies in the United States), and are managed by computers, not expensive advisors.
Think of it like this: Imagine you want to invest in the stock market, but you don't know which individual companies to choose.
An index fund is like a "set it and forget it" way to invest in the entire market, without having to pick individual winners.
3) You can save thousands of dollars in fees by investing in index funds
Instead of paying advisors 2% annually, you can invest in index funds with fees as low as 0.03% per year.
For example, the Vanguard S&P 500 ETF (VOO) charges just 0.03% annually.
That means you're keeping almost all of your hard-earned money to grow!
4) Learning about investing is easier than you think
There are many resources available, like websites, articles, and videos, that explain the basics of investing.
You don't need to be a financial expert to start, you can start by researching and choosing a low-cost index fund.
(If you need more guidance, consider The Financial Toolbox, a step-by-step course platform to teach you to invest yourself).
5) You have more time and control than you think
You have more time than you realise to learn about index funds and make informed investment decisions.
By investing yourself, you take charge of your financial future, avoiding high advisor fees and customising your portfolio.
If you do this long-term, it can help you reach your financial goals.
Conclusion
Instead of handing your money to an advisor who might not beat the market and will charge you hefty fees, take control of your financial future.
Here's what you can do:
Start learning: There are countless resources online and in libraries.
Choose a low-fee index fund: VOO, VT, & VTI are all good options.
Invest regularly: Even small amounts can add up over time.
Investing doesn't have to be complicated or expensive.
Take charge, learn the basics, and watch your money grow.
Want to learn how to take charge of your finances?
The Financial Toolbox is your comprehensive guide to building wealth and taking control of your money.
This digital course will equip you with:
Proven frameworks for building savings: Learn how to consistently set aside money and watch your wealth grow.
Investment strategies for growth: Discover where to put your money to work and unlock its full potential.
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Click here to enrol in The Financial Toolbox today.
See you next week.
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