A lot of smart people have a financial secret: They feel stupid about money.<\/p>\n
\u201cOne of the most common things I hear from clients is, \u2018I feel like I should understand this better, and I\u2019m embarrassed to show you this,\u2019\u201d says Linda Leitz, a certified financial planner and co-owner of Peace of Mind Financial Planning Inc. in Colorado Springs.<\/p>\n
But it\u2019s better to admit what you don\u2019t know than to let fear of looking foolish drive you into\u00a0bad decisions. When they\u2019re afraid to ask \u201cdumb questions,\u201d people don\u2019t get the information they need to make good choices, and they can get talked into the wrong financial products, Leitz says. Or they avoid money decisions altogether.<\/p>\n
\u201cI see this issue a lot. It generally comes in the form of paralysis,\u201d says Christina Empedocles, a certified financial planner and owner of Insight Personal Finance in San Francisco. \u201cPeople are embarrassed to find themselves adults without a clue about what to do with their money, and they\u2019re afraid of reaching out.\u201d<\/p>\n
So they delay doing anything, sometimes for years. \u201cThere\u2019s this long period of agonizing,\u201d she says.<\/p>\n
Afraid of looking dumb? Here\u2019s how to prevent that fear from getting in your way:<\/p>\n
If you feel like you should know more about managing money than you do, join the club.<\/p>\n
\u201cEspecially with educated people, they feel they should know,\u201d says Gregory Aloia, a certified financial planner with Abacus Wealth Partners LLC in Philadelphia.<\/p>\n
But often they\u2019re in the dark and feel fearful as a result, which can lead to bad decisions, he says.<\/p>\n
\u201cWe imagine our friends and our neighbors know so much more and are doing so much better than we are,\u201d Empedocles says. \u201cSince people hesitate to share this vulnerability, they don\u2019t realize that a lot of people are in the same boat.\u2026The first thing I do with new clients is to normalize this issue, so they realize they aren\u2019t alone.\u201d<\/p>\n
That realization can serve as a jump-start. In the personal finance workshops she leads, Empedocles says participants start to come to life when they realize they\u2019re not the only ones who don\u2019t know what a Roth IRA is.<\/p>\n
You may not know a lot about personal finance, but you probably know generally what you want.<\/p>\n
Think about your big goals and concerns. Once you can articulate those, it will be easier to move forward. Maybe you want to pay down student loan debt, or start a college fund for the kids or retire in 20 years.<\/p>\n
\u201cIt\u2019s difficult to get good advice if we ourselves don\u2019t know what direction we want to head,\u201d says Robert Carroll, a certified financial planner and managing director of Carnegie Investment Counsel in Cincinnati. \u201cWithout having a sense of your own needs, it\u2019s a little like pulling up to the drive-through and asking the order person, \u2018What should I have?\u2019\u201d<\/p>\n
Feeling hopeless? Don\u2019t let shame over past mistakes and inaction keep you stuck.<\/p>\n
\u201cDon\u2019t worry about what you should have done,\u201d Leitz says. \u201cLook at what you can do now.\u201d<\/p>\n
It might make sense to work with a\u00a0financial adviser\u00a0if you\u2019re overwhelmed, dealing with a big life event such as divorce, or feeling financially insecure.<\/p>\n
Ask a\u00a0financial adviser questions\u00a0to help you\u00a0find the right match. Above all, understand how the adviser is paid. Some advisers are paid commissions for products they sell. Fee-only advisers don\u2019t get paid commissions. Instead, they charge a percentage of your assets, a flat fee or by the hour.<\/p>\n
Ask advisers to explain terms in everyday language, says Cristina Guglielmetti, a certified financial planner and president of Future Perfect Planning in New York. \u201cOr repeat what they say in your own words to make sure you understand it.\u201d<\/p>\n
Good advisers encourage questions.<\/p>\n
\u201cAlong the way, nothing should be a mystery. From investments to planning, the steps should be clear and the mechanics openly discussed,\u201d says Marianela Collado, a certified financial planner and co-owner of Tobias Financial Advisors in Plantation, Florida.<\/p>\n
If you don\u2019t feel comfortable asking an adviser questions, then it\u2019s probably not a good match.<\/p>\n
\u201cA good financial planner will not make you feel stupid,\u201d says Larren Odom, a certified financial planner with Chastain Wealth Management in Atlanta. \u201cYour planner should spend enough time with you to educate you about what you\u2019re doing.\u201d<\/p>\n
\u201cYou should never invest in something you don\u2019t understand,\u201d Odom says.<\/p>\n
But many people do because they\u2019re afraid of asking questions or think it\u2019s easier to trust the salesman. (He seemed like such a nice guy!) When in doubt, get a second opinion from an adviser who\u2019s not earning a commission on the product sale.<\/p>\n
\u201cIf someone is trying to sell you something that doesn\u2019t make sense, either ask them to explain it until it does make sense and where you can make an informed decision, or walk away,\u201d says Elizabeth Buffardi, a certified financial planner with Crescendo Financial Planners in Oak Brook, Illinois.<\/p>\n
If the salesman thinks you\u2019re stupid, who cares?<\/p>\n
https:\/\/www.marketwatch.com\/story\/dont-be-afraid-to-ask-dumb-questions-about-money-2018-08-02<\/p>\n