Managing finances can be as complex as Sydney’s famous Opera House’s architecture. At Ikigai Wealth, we understand the unique financial challenges and opportunities that come with life. While we advocate for professional guidance in navigating the intricate world of finance, it’s also essential to explore all options. Let’s delve into the alternatives to using a financial planner and how they might fit into your life.
- DIY Financial Planning: Empowerment Through Education
In the age of information, the DIY approach to financial planning has gained popularity. Numerous online resources, books, and seminars offer a wealth of knowledge. Platforms like the Australian Securities and Investments Commission’s MoneySmart website provide valuable insights. The key here is education – understanding financial concepts such as budgeting, investing, and retirement planning.
However, while the DIY route can be empowering, it requires time, dedication, and a fair bit of financial literacy. It’s akin to sailing Sydney Harbour solo; thrilling but demanding expertise and constant attention.
- Robo-Advisors: Technology-Driven Financial Guidance
Technology has revolutionised many aspects of our lives, and financial planning is no exception. Robo-advisors, algorithm-driven online platforms, offer automated investment advice based on your financial goals and risk tolerance. They’re cost-effective and accessible, making them an attractive option for those starting their investment journey.
However, like any technology, robo-advisors have limitations. They lack the personal touch and deep understanding of individual life goals that human advisors.
These tools are essentially just asset allocation tools. They will recommend an investment portfolio based on your risk profile but are unable to make holistic recommendations on how to plan your financial life as a whole, considering your goals, tax and investment strategies outside of assets.
- Online Financial Management Tools
The digital world offers a plethora of online tools and apps designed to help with various aspects of financial management. From budgeting apps like Mint to investment tracking tools, these resources can help you stay on top of your finances.
But remember, these tools are aids, not strategists. There is a certain amount of knowledge you need to have in order to get the desired outcome from these tools.
- Community Workshops and Financial Literacy Programs
Community-based financial literacy programs and workshops can be valuable resources. They offer a space to learn and discuss financial concepts with peers and experts. Libraries, community centres, and even universities in Sydney often host such events.
While these programs provide a good foundation, they may not offer the personalized advice and long-term planning.
- Money Coaches
A money coach can be extremely useful to get a handle on your finances.
Money coaches help people with their money behaviour. They help them understand why they are making certain financial decisions and mistakes, help them create a budget and spending plan and allocate more money to savings and investments etc.
The limitation with money coaches is that they cannot provide financial advice. This means they cannot give any product advice or recommend any specific strategies around superannuation, investment products or insurances etc.
- Informal Financial Advice from Peers and Mentors
Sometimes, advice from financially savvy friends or mentors can be helpful. They can offer practical tips based on their experiences.
However, while this advice is well-meaning, it may not be tailored to your unique financial situation. Financial planning is not one-size-fits-all; what works for one may not work for another.
- Books and Financial Literature
There is no shortage of books and literature on financial management. From classics like ‘The Richest Man in Babylon’ to modern takes like ‘The Barefoot Investor’, these resources can provide valuable insights.
A book can show you the layout of the land, but never forget that books are written as “advice to many” meaning their recommendations are not personalised to your individual needs and goals. You will need to take this information and apply it to your personal circumstances and objectives, in order to get the value you need.
Conclusion:
As you navigate the options available for managing your finances, it’s important to weigh each one’s benefits and limitations. At Ikigai Wealth, we believe in a life-centric approach, where your financial plan is as unique as your fingerprint and as tailored to your life as your favourite suit.
Whether you choose to manage your finances independently or seek the guidance of a professional, the journey towards financial well-being is a personal one.
The biggest issue I see people make with their finances is not picking any of the above options. They have big dreams in the back of their minds but never take action and get started.
What’s the biggest thing holding you back?
