Even the most educated shudder at the thought of figuring out finances
By Mary Ann Pierce
I met with a wonderful group recently to talk about investment basics.
This group was a mix of people of all ages, from different backgrounds and varying professions. Every single person in this group appeared to be confident and competent.
We had a lively discussion, and there were many relevant questions asked that were interesting to group members.
However, at one point, a woman remarked, “I feel so stupid about finances and investing. I just feel as though I should know this.” This sentiment was echoed by just about everyone in the group.
All of a sudden, this great group of intelligent, capable people began to put themselves down.
Why do so many feel this way? Why should you be expected to understand all of the “ins and outs” of financial planning and investing?
Financial planning is not something that is generally taught in school unless that is the course of study chosen.
Finances and investing are also not necessarily intuitive. We’re not born knowing how to save, invest and plan for our financial well-being.
I believe that part of this stems from the myriad of advertisements we are exposed to in magazines, on TV or on the internet that encourages us to be a bunch of do-it-yourselfers.
These ads tell us that we can — and should — be able to navigate a labyrinth of information to evaluate among the thousands of investment options available to choose an appropriate investment mix of stocks, bonds, mutual funds and exchange-traded funds.
And we’re also told that we can balance our portfolios so that we can someday retire and live comfortably off our investment earnings.
Feeling overwhelmed by all of this is understandable. Also understandable is an urge to procrastinate when faced with this overabundance of information.
Then we beat ourselves up because we feel that we should be doing all of these things, in addition to spending time at work, running our household, and perhaps raising a family. It would be easy to feel incompetent.
Do your homework
My suggestion is to take enough time to learn the basics of investing — learn about the different types of investments, and what vehicles, such as a 401(k) and IRA’s, are available to help us save and invest for our future financial goals.
Having a good grasp of the basics will lend a sense of empowerment and trust that we are making sound financial decisions.
I also think it is important to have a team of reliable professionals to work with to assist in meeting financial goals. It is important to work with an attorney to discuss your will and estate plan. Tax advisers are important to ensure that we are not paying more tax than we are obligated to.
It is also important to work with an insurance and/or financial adviser to define and implement strategies for achieving financial goals. Each of these professionals will work together to ensure that you have an appropriate financial and estate planning strategy.
Every one of the individuals I was speaking with had the intelligence and capability to learn all about investing and financial planning if that was his or her desire.
However, finance is not their chosen career and they did not have that knowledge. For them to feel they are somehow “not smart” is placing unreasonable pressure to be proficient in an area that is not their main area of expertise.
As I said to this woman, “Let’s turn this around. Should I feel bad that I don’t understand your profession (medicine) and should I have my hand held throughout every exam and procedure and have the ‘language’ explained to me?” I asked.
Of course not, and neither should she or anyone else.
Mary Ann Pierce is a securities licensed principal at Marathon Financial Advisors, Syracuse, East Syracuse.She holds the chartered life underwriter designation, awarded by The American College in Bryn Mawr, Pa. Pierce has been involved in the insurance and financial services industry since 1989.