Brain Surgery? Maybe not...
David L. Blain, CFA is the CEO of BlueSky Wealth Advisors with offices in North Carolina and California.
I’ve always been a “do-it-yourself” (DIY) person. In fact, if you have heard the story of BlueSky you know that I started the firm out of frustration when I tried to find financial and tax advice for myself as I was starting out in my investing endeavors. Unsuccessful at finding highly skilled people I could trust, I decided to teach myself. Eventually, I turned my DIY chore into my lifelong passion.
To reach the point where I am today, I’ve studied and worked on financial planning and investments for tens of thousands of hours, I’ve helped hundreds of families reach financial independence, or assisted them in staying that way. I’ve successfully dealt with thousands of different financial problems and opportunities. In all humility, I can say that I’m an expert at what I do. And, I’m significantly better than when I was teaching myself 25 years ago.
In the year 2018, anyone can feel like an “expert” at everything thanks to the internet and our friends at Google, Amazon, and YouTube. Just ask my kids. They have more information at their fingertips than was even known to humanity when I was their age. There is a website or some tool online to help you with just about anything you want to do. And of course, let’s not leave Apple out, Siri knows everything, right?
There are websites to teach or help you to do legal work, diagnose medical conditions, prepare taxes, renovate a house, or repair a car. And of course, in what seems like our new national pastime, millions of websites and blogs on how to manage your portfolio and be your own financial planner.
But as I teach my kids, information isn’t everything. Having the tools and data available doesn’t make you an expert. In fact, you can cause actual harm, physically, emotionally, and financially if you don’t know what you’re doing. This quote from Donald Rumsfeld is telling:
There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.
Situations and events that occur in that last category will hurt you the worst. The things you don’t even know you don’t know. It’s also the category that a true professional with experience and expertise can assist you in successfully navigating.
As I said earlier, I love to do things myself. Included among the projects I’ve tackled over the years are the complete restoration of a historical home built in 1915, and rebuilding, from the ground up, a 1963 Chevrolet Corvette. In each one of these cases, I did a decent job with little outside assistance, learning as I went along. Fortunately, our house didn’t fall down, and I enjoyed driving around in my car for many years without incident. However, it took me significantly longer to complete the job than if I hired a professional. Yes, I probably saved some money, but only if you don’t count the opportunity cost of my time, and the job was in no way perfect. The floors in my house weren’t level and not all the doors shut properly. The Corvette’s paint job was pretty good for a first time try, but it wasn’t flawless. However, I enjoyed both projects immensely, financially they worked out ok, but most importantly the downside of getting it wrong wasn’t that significant (except maybe the brakes on the car).
In contrast, I used to do some dangerous life threating things while in the Army. Among them, I would regularly throw myself out of a perfectly good airplane, helicopter, balloon or anything that flew, with a parachute strapped to my back. Having successfully completed hundreds of jumps and inspected and supervised thousands of jumpers, I was awarded the Master Parachutist Badge as a testament to my experience and expertise. So, if you have never jumped out of a plane before would you prefer to have a Master Parachutist go with you and guide you, or watch a video on YouTube on how to pack your own chute and jump on your own? I admit there is a segment of the population, maybe 5-10%, who would want to, and successfully, do such a thing. But for the clear majority of people, it’s not a good idea.
Just for fun, I took a few minutes today to see if I could do my own brain surgery.
- I found a book on the basics of Neurological Surgery
- A video on how to do a Microvascular Decompression of a facial nerve for hemifacial spasms
- I saw where I could buy a brain retractor tool
- and importantly, I found a video demonstrating how to use this device
With a few more hours of study, I’ll be all ready for the OR, right? Not likely.
I think 99.99% of the population agrees it's not realistic to do your own brain surgery, so what’s the point of all this? Admittedly there are some people whose financial situation is straightforward and who have the time, desire and aptitude to be their own planner, do their taxes, buy rental properties, or manage their portfolio, etc.… all without professional assistance.
However, now more than maybe any period since the Great Recession of 2008, this may not be the time to be a DIY planner and/or investment advisor. With the new tax law changes, many of the time-tested tax rules and strategies of the last 30 years are now altered, especially if you are a business owner or high-income earner. Plus, with stock markets becoming more volatile in the years ahead and interest rates rising, ask yourself if you really want to gamble with your future and possibly cost yourself hundreds of thousands, if not millions, of dollars trying to do it all yourself.
If you’re ready for some assistance, let us know. We offer several different service levels designed to fit your preference for the delivery of advice and implementation assistance you want or need.