May 27, 2020
I am so thankful that we had glorious weather this past Memorial Day Weekend! It’s hard to believe that there was snow on the ground three weeks ago and we were not only stuck in quarantine, but praying for the ability to get outside in warmth. As my husband and I were sitting in the back yard watching our kids swim in the pool, I made the comment of how nice it was to feel like we had the yard put together this early in the season. Traditionally this is an effort we fail at each year but with extra time on our hands we were able to get ahead of the game. Thank you, coronavirus.
At the same time, I was looking around our yard and making mental notes about the things that I still wanted to do. These “things” are not exactly things though, but more like projects as my husband so nicely pointed out, and of course I want them all done yesterday! I tend to get ahead of myself on a regular basis and have been known to put ridiculous expectations on timelines. I call it the curse of a type-A personality and my husband likely calls it a super annoyance because, of course, usually I corral him into helping. Truth be told, our very opposite personalities work well so we have been lucky enough to accomplish many things over our past twenty years together.
But I have a confession. I am a DIY addict and Pinterest is at the top of my list of favorite things. This is where I get all of the ideas for the many projects I want to do! I have always been a crafty person and I like to keep my hands busy. I took up gardening with my grandmother as a young child, I learned to sew and quilt in my teenage years, and I can’t remember when I found my love of cooking because I have been doing it as long as I can remember. These are all things I love and there’s not much that I haven’t tried. I think homemade gifts are the best kind and I have always enjoyed receiving the same. As much as I love to DIY almost anything there are several things I am not capable of doing, such as painting furniture or frosting a cake evenly. Not all DIY is created the same!
That is especially true of investing. Over the past several years the idea of DIY investing has become increasingly popular. There are essentially two things we can control when it comes to our money. How much we save, and how much we spend. When we are able to control our expenses we can increase our wealth and DIY investing gets to the core of a saved expense in not having a financial advisor or paying management fees. There is a school of thought that a well-diversified passive index strategy can yield similar results as an active portfolio manager, and if the deviation is not significant then the money you are not paying an advisor goes right back into your pocket. This is true, but there are many things a DIY platform or robo advisor cannot offer you that a live person can.
Investors are not cookie cutters and the way people feel about their money varies to a huge degree. I have worked with clients who are retired but want a more aggressive portfolio, and I have had younger clients who are averse to risk. If you are investing on your own you can certainly set up a portfolio in line with your risk tolerance, but it requires a tremendous discipline to maintain your strategy and not try to time the markets in times of volatility. In addition, an online calculator is not going to be able to model what I refer to as outside considerations. We all know we need to save money to retire, but what happens if we get sick and cannot work? What happens if you have multiple children in college at the same time? Can you leverage financial aid to your benefit? Are you suddenly faced with caring for elderly parents? The list could go on and on.
Anyone can benefit from having a financial plan and there are so many components that go into one. Anything that impacts the way you live will impact how you feel about your money. This is where you get your real value in working with an advisor. People engage with an advisor not strictly for investment management, but because life happens and advisors can offer the ancillary counsel and services to properly adjust your plan when and if it’s needed. You may not need all components of a plan at the same time, but developing a relationship with someone you can trust, who understands your goals, and who can guide you through the game of life can be extremely valuable and worth the cost. Do what you love to do and partner with those that can help with the rest! That’s why I love my cake lady.
Iris Buczkowski is the founder of Birch Wealth Management (birchwealth.com). Original content provided by Iris is for educational purposes only and should not be construed as investment advice.