Well, sort of. No, this entry is not about whether you should hire a financial advisor/planner, and whether these people are competent or not…at least not really.
It is more about the importance of financial literacy. Lately, I definitely wished I had done better on this, and sooner.
I have been reviewing my investments, and particularly my RRSP. I realized how conservative I have been and how much more this particular account could earn me. I also noticed there were other products that could be suitable for my “profile” while performing better and with lower fees.
My introduction to RRSPs sure wasn’t a great one. Back in 2007, 6 months after arriving from France, I went to my then-bank to “discuss” retirement savings. In my home country, the system is widely different and I knew nothing about retirement in Canada. When I left the bank, I certainly didn’t know any more!
The advisor I met, after asking me a few questions about my finances and current situation, rushed to tell me that “mutual fund Z” was the best for me and that I had to open an account right away. I didn’t know what a mutual fund was.
She quickly explained it to me and then told me I had to put at least $ 500 in “mutual fund Z”. I didn’t understand the concept, she was getting impatient; I felt trapped and didn’t buy the product.
After that, my retirement contributions sat in an account earning 0.5% for 3 years!
Fortunately, these days are behind me, but my investments are still work in progress.
I realized being informed and educated was very important to make financial decisions, even more so than to buy a car or plan a vacation. Yet, I have spent hours researching for these 2 items. Who hasn’t?
For a long time I couldn’t be bothered to do the same with the most important item: my hard-earned money.
I also learned not to take any financial advice at face-value. In a perfect world, we should all be able to trust the professionals handling our money or making recommendations on how to manage it. But, we are not in a perfect world….
Educate yourself; feel empowered. Manage your money; be empowered.