Does Folk Wisdom Help or Hinder Financial Planning?

You’ve probably heard the saying ‘once bitten, twice shy’ to describe how people tend to react after they try something and it doesn’t quite work out. A lot of us also take that approach to our finances—if something does not work out the first time we try it, we may give up on it altogether. Depending on what the money management practice is, giving up might be the right thing to do or it could mean missing out.

Some of us also are too afraid to try. Rather than taking the risk of investing some money or changing financial institutions, we maintain the status quo, adhering to the adage that ‘better the devil you know than the one you don’t know.’ Again, fear can keep you locked in situations that are not to your advantage and your money may not grow as much as it might have if you’d tried something different.

We know of someone who went from impulsively and disastrously investing in gold futures to putting his family’s savings under the mattress. While we certainly understand why investments that don’t prosper would make one want to use a mattress as a bank, we would advise against giving up on investing altogether. A balanced, well-diversified approach is what is best in the long run.

You may have also heard the saying that the month of March ‘comes in like a lion and goes out like a lamb.’ When it comes to investments, March is not the only volatile month. This is why you shouldn’t go it alone when it comes to money management. When you opt to weather changes in varying investment markets with advice from a knowledgeable Fee-Only financial planner you can feel confident in your choices.

 

About the author

Claire Emory, MBA, CFA, CFP®

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