“A fool and his money are soon parted.”   –  Thomas Tusser

“He who represents himself has a fool for a client and an idiot for a lawyer.”

- Old Legal Saying

It is wise to use your gifts to the best of your ability. It also makes sense to seek help when your abilities are limited. Take me, for example. I have discovered what I am good at and what requires professional assistance. Household improvements and repairs are not my strong suit. I learned very early on that this is an area that requires help immediately. After several “experiences” of making bigger problems out of small routine repairs, it has become quite obvious this is an area where I lack gifts. I can make a mountain out of a molehill! Simple tasks for most people turn into a big mess for me. Believe me, it is not fun paying someone to not only fix the original problem, but also the new problems I have created. Sometimes, even when you have the expertise, knowledge, or skills, it is still important to have a sounding board to bounce ideas off of and receive wise counsel from.

A prospective client Bill is a middle-aged CFO with more than twenty-five years of financial experience, an MBA from a good school, and decades of investment experience. The thorn in his side was his investment portfolio! Despite the schooling and book knowledge, Bill’s portfolio was a mess and nearly impossible to keep track of. Like the weeds that took over the garden, Bill left his portfolio untamed. Bill had “overdiversified” his holdings. He owned hundreds of stocks, mutual funds, and bonds. Tracking, analyzing, and monitoring all of his positions would make a full-time job. Bill thought he knew what he was doing, but his results confirmed otherwise. Bill should have sought wise counsel.

The biggest mistakes, most investors make is a lack of understanding risk.  Most investors who handle their own portfolios are either too conservative or too aggressive.  Very rarely do they have the right mix.   The average do-it yourself investor experiences returns significantly lower than the markets and falls way short of the returns achieved by financial professionals.   A recent study showed that an average investor can trail an index by as much as 8% per year!

What areas of your finances could you turn over to a professional?

Would God be proud of the way you are handling your portfolio?

What other areas of your life could you use wise counsel?

Passage Proverbs 15:22:

Plans fail for lack of counsel, but with many advisers they succeed.