DIY Investing or Seek Financial Advisory

I am off the age when peers are starting jobs, earning a decent salary, pursuing their dreams and basically holding a job. Last nite I had dinner with friends who were keen on investing.

Some had the view of doing it alone. Others believed that having a Financial Advisor helps because the advisor acts like a confidante and helps to hold in check speculative urges.

The awkward truths

Financial Planners in Singapore earn a Basic and a Commission based on a stream of future payments from the financial services that you purchase such as Insurance and Funds. That is true.

It is true that they make more money if they have more clients.

It is also true that they'll make more money if they sell more of a certain type of product.

So what?

Your job is to optimize your investment opportunities. In secure long term investment, your biggest enemy is yourself because:

1. You make all the final decisions. Therefore you determine the outcome. (You and the sum of your stupidity and irrational fears.)

2. You spend a lot more time thinking about investment opportunities rather than worrying about possible dangers.

3. You get emotional and irrational when you hear others are doing better than you in Fund/Stock/Investment Idea XYZ. You switch between funds and incur huge transaction costs when ideally you should park your money and let time do its thing.

Therefore Financial planners:

1. Offer you advise and counsel and can help you get up to speed on financial issues sooner.

2. They've got the tools to help you come up with an investment plan in a rational, logical manner which can act as a framework for future planning. (Its nothing more than an Excel spreadsheet based on Annuity calculations that you can download from the Net, but seriously, do you have the time and inclination to study the assumptions and work through the model and figure out why exactly Money has a Time Value and how that affects your returns?)

3. By going through a financial planner in an investment plan, you avoid OVERTRADING which increases the transaction cost of your investments.

Financial planners' advisory role dampens irrational desires to trade when you don't really have to.

After saying all that, if you still want to do it your own way you can start here: fundsupermart.com

Alternatively, you can drop me an email and I'll help you get in touch with a couple of friends who are dead keen on maximizing your wealth without sacrificing your sleep.

Donc.