E27: Evaluating Your Advisor: Are You Getting Your Money’s Worth?

Wealth Well Done

When discussing financial advice, there are three main aspects to consider: tactical, practical, and spiritual. Tactical advice focuses on specific financial situations such as taxes, estate planning, and investments. Practical advice looks at how these concepts apply to your everyday life, including money management within relationships and avoiding raising spoiled children. The spiritual aspect delves into what the Bible has to say about money and applies biblical principles to financial decisions, with stewardship being a key component. Today's topic will explore how to evaluate your financial advisor, encompassing all three of these principles.

Here are some topics from today’s discussion:

• Three main aspects to consider when it comes to financial advice
• The dangers of acting on greed and fear in investment decisions
• Why diversity often feels like losing
• How to justify your investments
• Understanding the results of the DALBAR Study
• The best places to invest your money
• How to find value in your investment advisor

Episode Highlights:

[04:04] The Dangers of Acting on Greed and Fear in Investment Decisions

When you take on the responsibility of making investment decisions without professional guidance, it's natural to be influenced by two powerful emotions: greed and fear. However, acting solely on these emotions can lead to dangerous investment choices. Don't let greed and fear drive your choices; instead, seek a holistic understanding of the underlying factors before committing your hard-earned money

[12:01] The Best Places to Invest Your Money

Index ETFs: Eric believes investing in index ETFs is a good long-term strategy, but warns against frequent changes to investments due to short-term underperformance. He advises paying close attention to them and conducting thorough due diligence before making an investment decision. It's important not to be swayed by short-term underperformance and to have a long-term perspective when holding index ETFs. Adam believes that, in most cases, holding them for the long term is the best move.

Kingdom of God: One of the best places to invest is undoubtedly in the kingdom of God. The returns it offers surpass any other investment opportunity, with guarantees that extend even beyond this life. While it's important to emphasize that this is not about promoting a prosperity gospel, the assurance of heavenly rewards makes it a compelling choice.

Invest in yourself: Develop new skills through education, training, or starting your own business as they will pay huge dividends both financially and personally. Investing in yourself has the potential for high returns while also providing fulfillment and opportunities to use your talents to help others. It's an investment that keeps giving back.

Real estate and alternative assets: They provide diversification beyond stocks and bonds, may offer higher potential returns through active management and use of leverage, help hedge against inflation as real assets, and give access to private investment opportunities not available in public markets.

[16:57] Finding Value in Your Investment Advisor

To find true value in your investment advisor, Eric recommends evaluating both tangible and intangible factors. An advisor should provide thorough research, emotional management support, and discipline around diversification for fees paid. However, value is also found in holistic guidance spanning taxes, estate planning, real estate, and biblically-aligned money principles. Asking how fees translate to this full-scope advice helps ensure an advisor relationship optimizes both finances and faith.

Resources:

If you want information on ways to get access to direct investments, email Eric directly at [e-mail].