3 Years of Learning With My Financial Advisers

For most of my life, I’ve been a DIY money manager and investor. I think I’ve done OK — financially stable, on track for a comfortable retirement.

However, in 2020, a financial adviser reached out and asked if I’d be interested to plan my finances together. It was the right time for me — in my mid-30s, progressing well in my career, planning for kids — wondering what’s next in life.

I was super curious about what I’d learn, so I said yes.

Fast forward three years, it’s now time for a reflection article.

(Since my audience has grown to readers from all over the world, today’s article will cover broad learnings which should be applicable to financial planning anywhere.

Meanwhile, for the details of my experience in Malaysia, check out my article here.)

From three years of discussions, emails and financial planning reports, here are nine of the most important things I’ve learned from my financial planning journey:

1. Data Is a Harsh (But Useful) Teacher

What you think about yourself can be very different to reality.

I used to think I was a hotshot investor because I read so much and knew about all kinds of exotic investments.

When I went through my first financial review, the data proved otherwise — my “heavily-researched” investment portfolio averaged <4% annual returns. In my 20s, I’d have done much better leaving my money in an S&P 500 index fund.

Apart from crypto and alternative assets, I’ve not done well investing my own money.

Nowadays, I focus on my circle of competence, and let my financial advisers advise most of my other money decisions.

2. You Don’t Know What You Don’t Know

It’s easy to get one dimensional about money.

Some people are obsessed with saving money. Others, about getting discounts and deals. If you’re like me, it’s investing.

That’s great. But understand having a huge interest in one area could lead to blind spots in other important areas.

Looking back at my late 20s — I spent countless hours reading financial reports trying to find “alpha,” but neglected thinking about insurance and estate planning. All offense, no defense. Talking with my financial advisers made me realize I didn’t even know the basics of what happens to your assets when you die.

All those investment gains are nice bro, but what happens if you get sick? What happens to your family when you’re gone?

3. The Biggest Challenge Isn’t Knowing What To Do

It’s finding the discipline to do it.

Working with financial advisers won’t save you if you don’t work on the follow-up items — if you don’t do the homework.

Personal example: I’ve been trying to get my Will done for more than 1.5 years now. But since I don’t have as much interest in it as say, scrolling Crypto Twitter, I’ve been slow to provide the important details — despite the helpful reminders from my advisers.

It’d have been done in half the time if I were more disciplined.

As author Shane Parrish says:

4. Be Careful of Who You Take Advice From

A lot of what I used to believe was influenced by personal finance “hacks” written by anti-establishment millennials.

Who wants the boring, “get rich slowly” kinda stuff? F*ck that. No, we want shortcuts that’ll get us rich tomorrow.

See the problem?

Yes, you can learn useful things from young content creators. But there are limits. I always chuckle when parents mock productivity bro tweets from single guys in their 20s.

Meanwhile, there’s also immense value in learning from older professionals — even if you feel they’re boomers. Even if their wisdom feels boring and outdated.

I’ve learned to filter the money advice I take depending on who’s giving it. I’ve tried to be more balanced and responsible in the things I write too.

And if you ever need a reminder of how pride comes before a fall, here’s one of my favorite ever tweets, from right before the crypto market crashed in late 2021:

5. Compounding Will Always Be Magical

No matter how much I understand the principle of compounding interest, seeing the actual numbers grow in my account always feels magical.

The challenge with compounding is it’s hard to get excited about it when you’re young — because the returns feel small.

10% of $5,000 invested is just 500 bucks.

But that’s precisely when it’s the most powerful.

Do enough years of the $5,000 invested, and one day you’ll wake up to big returns like:

10% of $100,000 invested is $10,000.

6. Kids Change Everything

In my early 30s, I thought I could reach Financial Independence and Retire Early. FIRE.

Going through the detailed costs of raising kids popped my bubble. Sure, I can stinge on myself, but I’d never be able to stinge on my kids’ food and education.

I’ve made peace with it. That I’m gonna work for a long time. It’s why I think finding meaningful work is more important than hustling to earn as much money as quickly as possible.

For most of us — who won’t make it to early retirement — it’s the sustainable way.

p.s. Naval Ravikant has the best reason I’ve ever heard to have kids: “Give yourself the gift of loving something more than yourself.”

7. Improvement Is the Goal, Not Perfection

When I started my financial planning journey, I was overinvested in bonds and crypto.

Three years on, my portfolio is far from any “recommended portfolio.”

But I’m more balanced — I’ve got more stocks now. I used to be underinsured, but now have more reasonable protection for my family.

A good adviser will help you improve your blind spots.

The other thing I’ve sincerely appreciated is my advisers aren’t pushy. You feel they’re in it to help you, not to meet a sales target. (Important Note: Independent financial advisers can recommend you products from any company — whatever’s best for you). They’re not condescending either.

Encourage good behavior by celebrating progress. Not criticizing failure to reach perfection. Applies to any kind of improvement.

8. You Will Lose Sometimes. Manage Your Sizing

About a year into my financial planning journey, I came across the opportunity of a lifetime — to invest in a privately-owned fintech company.

Although I’d never touched my retirement funds before, I decided to withdraw some and invest.

The market crashed within a year, and today, I’m down >70%.

Bitter lesson.

I can still remember chatting with my financial advisers about the opportunity. They taught me something interesting about moonshot investing: It has to be big enough to be meaningful (otherwise why waste your time?), but not too big where if it fails (they considered the company above to be high risk), it’ll hurt too much.

Keeping the investment size reasonable helped me get through the pain.

Investing is not just about avoiding losses. It’s also about keeping your losses small and your wins big.

9. Time Is True Wealth

Approaching 40, I don’t have time to manage everything DIY now.

It was such powerful learning for me in my 20s and early 30s, but working with a financial adviser over the past three years has also been enlightening.

I’ll always love studying, thinking and writing about some parts of personal finance, but I’m grateful I can now pass the parts I don’t love to a professional.

It’s a joy to be able to choose what you spend your precious time on.

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In the process of writing this, I received a complimentary financial planning package from Wealth Vantage Advisory (WVA), a licensed financial advisory firm.

For my Malaysian friends — if you’re interested to get professional money advice, sign up here (and scroll to the bottom) for a free consultation session with WVA.

No obligations to take any paid services. So perhaps have that free chat and see if it brings as much value to you as it did to me?

Article contains an affiliate link. If you sign up for any of the paid services, I’ll get a small reward.

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Pic from Pexels: Gül Işık

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