As I am writing this, a flood of inputs are deluging my brain. The first was a call from my bank erroneously telling me I was out of money in an important account. As I said, it was an error, but it gave me an extreme scare. What if I really were out of money? What would I do?
What about the people who really are out of money? What about the millions of Americans who simply do not have the money to pay their mortgages and are losing their homes?
At the same time these thoughts attacked me, I was texted by a friend who had lost her home.
She was DESPERATE.
Almost simultaneously, I was called by a longtime pal who suddenly had been dismissed from her job and was in a total panic. This, again, set my mind whirling. And then, out of the blue, appeared on the television images of a dear friend and mentor (so much richer than I am that I might as well be a homeless dog by comparison).
There was Warren E. Buffett, the most successful investor of all time, receiving the Presidential Medal of Freedom. Suddenly, I recalled a brilliant line from Mr. Buffett’s seemingly bottomless gold mine of wisdom. “It’s important to have a plan,” said Mr. Buffett. “An idiot with a plan can beat a genius without a plan.”
Now, to be sure, one can quibble with this thought. After all, there can be some very bad plans, like the South’s plan to secede. And there can be some bad financial plans, like a plan to invest all of your money in Internet stocks in mid-1999. But by and large, Mr. Buffett’s point is right on the money where personal finance is concerned.
If you have a good plan for your money, you are light years ahead of operating on a day-by-day, hit-or-miss basis. This means, very simply, that you should have a gifted financial planner, a good asset manager. If he (or she) has a track record and can provide long-term references, and if he (or she) draws up a plan for you — and if you follow it scrupulously — you will generally stay out of trouble.
Or, I can put it another way. Unless you are yourself an expert in financial planning, unless you are either a registered money manager of some sort, or a planner of a high degree, you should have a financial manager and planner working for you. Or, I can put it even more bluntly: In all of my life, I have never met a man or woman who had a highly qualified financial planner or asset manager helping him or her, who listened to the advice, who got into severe financial distress.
Money is a supremely emotional subject. It scares the daylights out of many people.
It is essential to have someone who can look at your financial situation carefully, dispassionately, realistically; someone who knows jobs, spending, assets, investment choices, annuities, and can make a solid plan for you to get you through college for your kids (if they want or need college) and — far more important — can get you to and through retirement.
In today’s uncertain world of inflation, real estate collapse, and extreme concern about government and private finance, you must have a plan, and that means you must have a planner. In a world in which a defined benefit pension plan is becoming unknown, you must have some source of funds in retirement, and that means employing a planner who can make it happen.
Except for the very few, personal finance is too darned complicated and upsetting to do it yourself. It involves rules and laws and principles that are beyond what most persons know.
It is a lot like medicine: Personal finance — in today’s world — is just too complicated for even very intelligent laymen.
When my friends get into financial hot water, I often ask them if they had any kind of plan. Usually the answer is no.
In fact, I’ll correct that. The answer is always no. And when I ask why not, they usually say, “I never got around to it,” or “the whole subject is just too scary for me.” But if you don’t have a planner, you had better get around to it, and soon. College for your children comes up fast. It is almost unbelievable how fast age 65 comes up, and it’s staggering how unsettling it is to have to spend money without a regular paycheck coming in.
Making the choice of the right planner is tricky. Some are better than others. But you ought to begin the process of investigation and selection right now.
Fear of financial insecurity is a cruel terror. Actual financial insecurity is even worse. Truly running out of money is so frightening it’s almost beyond comprehension.
Employing a financial planner is a powerful first step to making sure it never happens.
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