Other People’s Money

What does the phrase “other people’s money” bring to mind for you?

Maybe it’s how the big banks have gotten a little too comfortable with other people’s money. Or maybe you think of our Federal government. Maybe it’s something else.

But I’d like to ask you to think about it in terms of how you think about your own money versus how you think about other people’s money.

Most folks, if asked, think my work involves managing money for my clients. And sure, that’s a part of it. But much more important than managing the money is managing the people I work with. Money can’t make its own decisions, but people can, and this is where the real work of financial advice happens.

For more on why this is, read any article on cognitive biases.

I see these biases regularly when I’m talking to clients and other people I’m introduced to.

Despite my being a financial advisor and dealing with financial decisions all the time, I still wrestle with these financial bad habits from time to time. Not with my clients’ money decisions, but with my own. And it’s because I’m human.

So perhaps one of the reasons why my clients hire me to help them create and execute a personalized financial plan is because I can provide objective advice since their money isn’t my money. And it’s for this same reason that I get help with my own financial planning — because I need someone else’s perspective about my money.

The challenge is finding a trusted financial partner that can provide objective advice and counsel while also being focused on your best interests. Trouble arises when the person giving advice is so detached from your money that they don’t consider or care about the consequences of their advice and your decisions.

These are the horror stories we read about in the paper or see on the news.

However, if you’re patient and willing to interview several professionals, I believe you can identify a trusted advisor to help you navigate your path to financial well-being while providing enough objectivity to help you avoid the potential pitfalls that can weigh on our financial decisions, not because we’re dumb or because we don’t have enough available information . . . but because we’re all human.

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