The Value of Advice

Today's Newsletter:

• Quote from Dolly Parton

• The Paradox of Value

• The Value of Advice

• A Money Question

Quote

“I don’t like to give advice. I like to give people information because everyone’s life is different, and everyone’s journey is different.” - Dolly Parton

Chances are you didn’t have Dolly Parton on your mind this morning. Yet, I love this quote from her. Your journey and experiences are unique to you. That unique journey has shaped many of your views of money. My role as a financial advisor to families is to be a guide, to educate them, and to give them information to make great financial decisions.

Paradox of Value

The paradox of value is a fascinating economic puzzle that pins the low cost of water to the high cost of diamonds. On one hand, water is essential for humans to live, while on the other hand, diamonds are unessential. Yet, the cost of water is cheap and the cost of diamonds is expensive.

The reason for this is twofold. First, there is a high subjective value placed on diamonds. We as a society subjectively value diamonds high thus driving prices up. In addition, society often prices goods on the marginal benefit, not the total benefit. Said another way, water is easy to get relative to the demand while diamonds are hard to get relative to the demand.

Teachers are more valuable to society than NFL quarterbacks yet one is vastly underpaid and one is paid tens of millions a year. This is the paradox of value in practice.

I share this with you because it will frame our discussion today on the value of financial advice. For 10 years from 2009-2019, I sat on the other side of the table as a client of those giving financial advice.

Today, I am going to share my own paradox of value, the advice I received, and the value it brought me.

Let’s dive in!

The Value of Advice

Personal Paradox of Value:

As an 18-year-old kid, I was drafted 9th overall in the Major League Baseball draft. That came with a signing bonus that ultimately paid me more than $7,000,000. While water was still essential to my living, the thing I was now willing to pay the most for was good financial advice.

To clarify, I was looking for someone to educate me on what I should consider, how I should position this money, and ultimately what I should do to “not screw this up.”

The reality was all the information I needed was a click of the button away on Google. There were countless articles on saving, budgeting, investing, tax strategies, and estate strategies. Yet to reference, Dolly Parton, my journey was unique to me, and finding how the generic Google strategy connected to my life was outside of my scope.

You see the marginal benefit of financial advice to me was exponentially higher than my friends at college. I was navigating a windfall of millions of dollars not trying to pay for the weekend boy’s trip.

I say this because the reality is the value of financial advice to you, me, and everyone out there is different. It is a combination of what is at stake to you and how much you care about the outcome.

The Advice I Received:

When I first started my financial journey, I gladly paid a premium for my team. In fact, I hired a financial advisor and another company that served as my personal “money police”. Their job was to oversee the team of advisors I had around me and report back on the work they did.

And guess what?

I got what I paid for. I received good advice from my financial advisor and any gaps they missed were picked up by the “money police”.

Here is how I would break down the value of the advice I received:

Education

I knew nothing about this world and part of my cost was simply an investment in my knowledge bank. I wanted to better understand what to think about and how to think about it.

Strategy 

Have you ever wondered why big companies pay consultants millions of dollars? It is because there are often billions of dollars at stake. In a far smaller scope, I felt the same way. I needed the strategy to maximize my opportunities. After all, there were millions of dollars at stake.

Resolve

When your investments drop by 10% or more and you have millions of dollars invested, that stings. The first time that happens it can be sheer panic when you open your account. My team served as my sounding board for concerns and my built-in willpower to stick to the process.

Coordination

There are endless strategies you can use to better maximize your money. Take that and combine it with the fact that every person is unique and trying to accomplish their own set of goals. That math equation comes out with a high number of possibilities. One that takes a team to implement. I found immense value in having my entire team working with one another.

Backstop

The most intangible benefit I received was also the most important to me. My wife and I have made a lot of good financial decisions over the past 15 years. Yet, the reality is I don’t know what tomorrow holds but I do want those decisions to be rewarded. My financial team both back then and today is my personal backstop. They know where everything is, they know the plan, and they know what is important to me. Said another way, no matter what the train is staying on the tracks.

The Value It Brought Me:

In short, the value it brought me has changed my life. I don’t say that lightly but the reality is good financial advice has set up my family for the rest of our lives.

It has also shaped the way that I give advice to our clients today. My goal is to educate clients on their options and be the guide to making great financial decisions. The sacrifices our clients have made to create wealth for their families are personal to me. I have seen firsthand the impact good financial advice can bring.

Yet beauty is always in the eye of the beholder. It is the paradox of value.

A Money Question

How confident are you in your finances?

Consider this on a scale of 0-10. Are you a 10 out of 10 confident that you are doing all you can to maximize the sacrifices you are making?

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I help athletes, entrepreneurs, and executives pay less in taxes, simplify their financial lives, and invest for the long run.

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Until Next Time, My Friends

Moment Private Wealth, LLC is a Registered Investment Advisor, located in the State of Missouri. Moment Private Wealth provides investment advisory and related services for clients nationally. Moment Private Wealth will maintain all applicable registrations and licenses as required by the various states in which JL Strategic Wealth conducts business, as applicable. Moment Private Wealth renders individualized responses to persons in a particular state only after complying with all regulatory requirements, or pursuant to an applicable state exemption or exclusion. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice.