Every day, such arguments and discussions over money take place all over America. They’re part of our culture. But they and the angst that goes with them can be dramatically reduced to no longer dominate our lives. I’d be lying to you if I said it’s possible to eliminate all our money problems. But they can be significantly reduced by getting help and guidance from experienced financial advisors. Just knowing that they are there and can offer positive advice significantly reduces our anxiety over money issues.
Practically every hardworking American dreams about having all his financial problems lifted from his shoulders. What better evidence than Americans’ obsession with the lottery? Even though the chances of winning the lottery are miniscule, the compelling, adrenaline-charged fantasy that they could win, however remote, propels many to play.
Americans Spend Far More Than They Should
Americans in the forty-three states where lotteries are legal annually spend about eighty billion dollars on lotto games, according to the North American Association of State and Provincial Lotteries. That breaks down to more than 230 dollars for every man, woman, and child in those states—or three hundred dollars for each adult. That’s more than Americans in all fifty states spend on sports tickets, books, video games, movie tickets, and recorded music sales.
Practically speaking, however, it makes sense to do everything within our means to reduce our financial worries and get our financial act in order. Angst reduction alone is a wonderful benefit of having a professional we can call upon when stressed about money. Aside from providing expert advice, advisors can defuse our irrational, emotional involvement with money.
Human beings get overly involved in their decisions about money, making it very difficult to divorce ourselves from them. Many studies have found that investors fall in love with the stocks they buy. An irrational, emotional involvement with their purchases makes it difficult to sell them at the right time.
In 1987, when I was a rookie broker at Shearson Lehman Hutton in New York City during the famous stock market crash, I witnessed firsthand clients begging their brokers to sell their stocks without even knowing their individual prices. Sell orders were coming in so quickly that market technology could hardly keep up with them.
This was a textbook example of panic. Unable to see beyond the emotionally charged moment, investors threw reason and rational thinking to the wind and made a lot of bad decisions they later regretted. You can imagine how thousands of investors who panicked during that historic period must have felt a year later when the market hit new heights and kept on going.
How many times have we bought stocks near their highs and then sold low? Likely during every market bust. But then we complain about how lousy the market is. How many times have our stocks risen, yet we kept thinking they will continue to climb, and fail to take profits at the right moment? The stocks suddenly plummet, and we’re forced to wait a couple of years until they come back. An advisor could have prevented those irrational moves and given us the perspective we needed.
Financial advisors can be likened to shrinks, rabbis, priests, or pastors, because they take the stress and tension out of financial planning. We don’t have to endure angst about paying tuition for our offspring’s first year of college or obsess about the poor performance of our 401(k) plans. Instead of expending needless energy worrying about these issues, we can dump them in our advisors’ lap. They’re the objective voice of reason that can unemotionally and objectively evaluate problems, providing sound and practical solutions.
Wealth Management Can Be Learned On The Weekend, Right?