Toronto had a flash severe thunderstorm yesterday. Trees were down all over our neighbourhood, and I thought our house and property were spared until my wife pointed out a small piece of our roof’s soffit that had blown away. [FYI…soffit is a large aluminum plate with small perforated holes installed under the outside edge of the roof, under the gutter. It has several functions: it protects, it is aesthetic, and it allows ventilating the attic.]
The missing piece was on the ground intact and, while I have no formal education or experience in installing soffit, I considered getting up on a ladder and figuring out how to put the piece back myself.
My wife – who is much smarter than me – immediately advised against it, but I considered it nonetheless. Why would I pay someone hundreds of dollars for what looked like 10 minutes of work (especially as prices for everything seem to be going up these days), when I’m fairly sure I can figure this out myself?
I got a few quotes, ranging from $225-$450 (!) to do the work. I then took a second look at what it would take for me to do it myself. I would have to get our ladder on a steep angle to reach the spot and if something were to go wrong – and I estimated a small-ish 5% probability that something could…there is no doubt I would be risking my life. Fixing this clearly wasn’t as easy as I thought. So, I immediately accepted the $225 quote and am waiting for the work to be completed.
What does this story have to do with wealth management or investing?
I’ve been noticing a trend in recent years and even, surprisingly, in very recent days (even amongst some of the most challenging market and investing environments any of us have seen in our lifetimes), of highly reputable financial journalists from highly reputable publications making comments along the lines of: “investing is easy.”, “why pay x% for advice when you can just do it yourself”, “just buy ETFs, it’s cheap and easy”.
The above ignores the fact that while people are smart, they may not be knowledgeable about finance and investing, nor the emotions involved in finance and investing; they may not have lived through (or paid attention to) severe past market volatility; they may not know what the acronym “ETF” means and even if they do, they may not know which of the literally thousands of ETFs they should choose from. And finally, almost no articles I read make any mention of any other investable assets other than standard stocks and traditional bonds.
There is a world of finance and investing knowledge that comes from living and breathing it 24/7, for – in my case – almost twenty-five years. And our clients rely on us to help them navigate these markets, select ETFs (hint: exchange-traded funds), find other asset classes that act differently than stocks and bonds, and grow and protect their hard-earned assets.
If you are confident and comfortable, there is no problem going-it alone. But if you are unsure of how to manage your investments, please don’t be convinced that paying an advisor (a tax-deductible fee) to do so, is a poor decision. Investing isn’t easy. And I suspect many people who – for the past few years thought it was – may now be rethinking that decision. Like my decision with my broken soffit, don’t risk your life (savings) trying to do it yourself.
Stay tuned for another article on this theme when I review Benjamin Graham’s book, the Intelligent Investor. Warren Buffett calls it “By far the best book on investing ever written”. You may be surprised by what I think the Father of Value Investing was actually trying to teach us.