Imagine you have never cooked a meal before and you are sent to the grocery store to buy ingredients for an elaborate meal you’re going to cook.
Unfortunately you only have a vague idea of what you’re trying to cook.
On all of the shelves there aren’t any prices, or if there are, they are hard to understand because they’re written in small print and written in code.
You begin to walk up and down the aisles choosing ingredients that you think look good. You start with some lettuce, then some flour, ginger, sour cream, cereal and chocolate pudding. From there, you check out, not knowing what it costs you, but knowing that some money has been taken from your bank account to pay for the ingredients. You then take them all home and throw everything you just bought into a big frying pan and start cooking them all together.
This sounds ridiculous.
No one would shop like this.
Plus, this combination of ingredients prepared in this way would taste disgusting.
Why the grocery store analogy? Because this is what happens each and every day with regular investors.
Often, when we have someone sit down with us, we find that the ingredients, or investments, they have in their portfolio don’t match up with the thing they’re trying to cook, or the goals they’re trying to achieve.
Furthermore, we often find that people get into investments without really knowing the true cost.
We speak with a lot of intelligent people, who probably have good ingredients, but they might have the ingredients for someone ELSE’s recipe, not their own. There are no bad ingredients, just bad ingredients FOR YOU.
That’s why we encourage you to go to the store with a list. A good financial advisor can help you decipher exactly what your financial goals are and present options, or ingredients, that they believe will help you accomplish those goals. Furthermore, a good financial advisor can provide a cost benefit analysis on your possible options so you can decide if you’ll be receiving value for what you’re paying.
If you don’t know if you have the right ingredients or the right Sous Chef to help you along the way, maybe it’s time to get a second opinion.