As much as I like talking about personal finance – as in, check out the amazing deals I got at Anthropologie or Chapters today – I realize I do need to take the leap to investment finance now. It has been pretty easy to avoid because I have been quite convinced that we don’t actually have enough dough to invest (see shopping references above) so why bother? In fact, somewhere deep inside - most likely in the same place I justify eating the last six Oreo cookies, because the alternative is allowing my kids to eat such unhealthy snacks and that would be irresponsible, right?- I may have justified some of my um, generous spending habits by convincing myself that we don’t even have enough money to be investing – so this is actually *spare* or *extra* money anyway.
Yet, earlier this week, as my best buddy and I sat and enjoyed our $5 lattes, we both realized that along with crows feet and giving up skirts above the knees, growing up means taking ownership of our finances – we just didn’t really know what that meant, exactly. We both understood that saving and investing were necessary, way more advantageous then say, shopping all day long. Yet agreeing to that still led to blank stares as we wondered aloud what the right next step was. Visit the bank? Get a financial advisor? Speak to my accountant? Maybe I have watched a few too many Micheal Moore documentaries but the thought of placing my trust in just anyone frankly makes no sense and is just as irresponsible as my current frivolous financial habits.
So, I was intrigued to read about Investment Policy Statements (IPS) in the Globe& Mail this morning. Relieved too, because I though IPS stood for Irritable Pouch Syndrome – which is a thousand times way worse, so this is totally less scary! The author, Preet Banerjee likens investing to flying – having a destination for the former is as important as it is in the latter.
He explains, “An IPS is specific to your investment portfolio, whereas a financial plan is more encompassing and includes things like estate planning, a long-term tax strategy, credit planning, cash flow, etc. An IPS will define your tolerance to loss, what are acceptable and unacceptable investments for you, and what to do in reaction to different market events before they happen.”
I am curious to know whether tolerance to loss is measured the same way as tolerance to pain. So curious in fact, that I hunted Preet down and threatened him with with mothballs & moldy cheese politely asked him if I could interview him about how exactly to find the best Investment Financial Advisor. I’d like to know where I should look, what credentials I should be seeking, things to avoid, what I can expect to pay for these services and more. Summer Sales be damned, I am determined to be an Investor!!
In the article, Preet goes on to say, “You don’t need to understand how the pilot flies the plane, but you certainly want to know where you are going and how much turbulence to expect on the flight”.
With that in mind, I’d like to know how to choose the right pilot. Images – nice, slightly lusty ones - of Maverick “That’s right Iceman, I am dangerous” a la Top Gun immediately spring to mind. As does Han Solo. I suspect neither will make it into our conversation next week, though I will try….
So, I’d love your help: What questions do you have for Preet about finding the right financial advisor? Let me know and I will be sure to pass onto him when he stops hiding from me we chat next week
