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Why You Most Likely Do Not Need a Financial Advisor
The gatekeepers of the finance industry have done a number on us –– women and BIPOC especially. They’ve held the keys just out of reach and told us that managing your own financial portfolio is simply too difficult, too nuanced, or too far above our understanding that we simply can’t do it without them.
The good news is, the keys they’re dangling are just copies –– the stock market, investing, and building long-term wealth is not nearly as complicated as they want you to think it is. It’s accessible, and you can start with as little as $50.
Believing that investing is complicated is a long con game of the patriarchy. They set you up to fault by believing that you need them to build wealth. It is, without a doubt, a complete lie. I’m living proof –– I have enough money to retire at 27 years old, and I manage my portfolio 100% on my own and have since I opened my first Roth IRA in my early twenties.
If you’re feeling stuck and unsure how to manage your own portfolio, Treasury app is here to help. Treasury is my one-of-a-kind investing education community, created to provide resources and a judgment-free zone where you can learn how to manage your portfolio. Gain access to Treasury and become an investor with our Investing 101 workshop.
Here’s a breakdown of why 99.99% of the time you don’t need a money manager or a broker to help you invest.
You can manage your portfolio alone
Despite what the aforementioned gatekeepers may have you believe, opening a retirement account is a quick and easy process and doesn’t take a lot of money to do. You can start investing today with as little as $50 in an IRA.
A retirement account is just for that –– retirement. Accounts like IRAs and 401Ks have yearly contribution limits and early withdrawal penalties (usually before you’re 59 ½ ), which means that the money you invest in these accounts is for your retirement. It’s not as sexy as day trading (gambling) or Crypto (high volatility), which is why it is so necessary.
The years after retirement are some of the most expensive of your life, and living them without a savings can make this time additionally stressful, and for many, put off retirement indefinitely. That’s why I spend so much time talking about investing early –– even with a small amount, you’re making sure your older self is taken care of so your golden years can actually be golden.
Why managing your own portfolio is a good money practice
Another great reason to manage your own money is the domino effect on your finances. The more you interact intentionally with your finances, the better you are with them and the more motivated you are to hit your savings goals. Many investors start out doing the bare minimum, which is 1000% OK –– but as they learn more and watch their money grow, they start to understand the power of compound interest. As their confidence grows, they begin to feel more confident in all financial areas.
Managing your own portfolio forces you to really take a hard look at your finances and learn to adjust as you grow. As you make more, you’ll be inclined to save more, change your goals, and adapt in difficult times.
Where to go when you’re unsure
One of the biggest hesitations I come up against when I’m talking about managing a portfolio is this general feeling of “I don’t know enough to make smart decisions.” That may feel true now, but the good news is that there are so many amazing creators out there delivering high-quality education so you can make the best decisions for yourself with the knowledge to back it.
The hunger for financial education is huge, and there are hundreds of books to be read to help understand the basic concepts (read more: some of my personal favorite personal finance books).
You won’t just “know” how to invest –– they don’t teach it in schools, and like I said above, gatekeepers gonna gatekeep. So staying plugged into a community like Her First $100K or following some of the authors above will help you grow your knowledge and your confidence.
Another helpful community is Treasury, our one-of-a-kind investing app that walks you through the steps to fully invest on your own. It’s part community, part investing app, part education platform.
Scenarios where financial advisors can help
Every once in a while, I meet someone who truly could benefit from a wealth manager –– but they are usually people who have very, very specific situations like multiple trusts, real estate, or other more complicated portfolios that benefit from having a guiding hand. Again, this is extremely rare, but if you are in this scenario, please please please make sure your financial advisor is fiduciary.
A fiduciary is legally bound to make decisions in your best interest –– so there’s an extra layer of protection and professionalism.
Red flags and scams
I hate that these exist, but we have to talk about it because scams are rampant in this industry. More and more, we’re seeing them getting more insidious, with spam accounts impersonating personal finance creators like myself and asking for money. Here’s how to spot a scam:
They promise to double/triple/quadruple your money in a few weeks or months. If it feels too good to be true –– it is.
A personal finance creator or good financial advisor would never DM you and ask you for money over Instagram. Never. Block and report, friends.
If someone claims to have “exclusive” access to some secret investment, RUN.
It bears repeating –– if it seems too good to be true, it probably is. In the year of our Lord, 2022, I should also note that we should not be giving our money, time, or energy to finance educators or gurus who use shame as a tactic or don’t address systemic inequity. The shame-ship has sailed, bon voyage!
Managing your own portfolio does not have to be complicated, and it certainly is possible for most people. Take it from our success stories –– getting your financial shit together (which includes investing) is a journey, but it’s so worth it.