Playing to your strengths and outsourcing your weaknesses

Last month I hired a man to replace all the guttering and some lead flashing outside my house. It cost £3,176.

It wasn’t an emergency and someone less forward-thinking might have postponed the job another five years. After all, who wants to drop that kind of money on something so uninspiring and noncritical?

But the brickwork gets wet during heavy rain, and I was concerned about the impact mould could have on the cement. Leaving it until it gets worse could set me back £10,000 or more.

According to YouTube, this is the type of job that anyone can do with the right tools, but after watching a couple of videos I decided to leave it to the experts.

This got me thinking about the importance of knowing your strengths, admitting your weaknesses, and staying in your own lane.

I know what I’m doing when it comes to finance and planning, but I’m not a guttering expert.

Rather than learning a new trade every time something breaks in my house, I’m better off hiring a tradesperson who commits their career to painting walls, fixing sinks, or installing fancy light fittings.

Not only is this an effective way to get the job done, it frees up my time to focus on what I’m good at — helping my clients with their finances.

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The problem with trying to do your own financial planning

Many people avoid hiring financial planners because they’re concerned about the cost and believe they can do it themselves.

They may go on to make bad decisions, invest in the wrong things or fall victim to scams. Or perhaps they’ll go down the DIY route and do okay. They might end up with a healthy savings account, well-funded workplace pension, and a diverse stock portfolio that aligns with their risk tolerance.

However, without the right qualifications and many years in the finance industry, it’s difficult to cover everything. It’s hard to look at the full picture when you don’t know what you should be looking for. Sometimes, you need an outsider’s perspective.

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Identifying your strengths and weaknesses

If you’re reading this article, chances are there are elements of personal finance that you’re already good at. Perhaps you’re an excellent saver and you squirrel 40% of your income into ISAs and Premium Bonds.

But being a savvy saver alone isn’t enough. Do you also invest? Do you know how to spend with purpose? Do you know how to manage your money in a way that’s tax efficient? Do you understand the complexities of wills, trusts, and IHT?

You don’t have to know all these things, of course. 

You’ll have your own knowledge and skills that’d take a financial planner a lifetime to learn. 

But once you’ve acknowledged your skills and weak points, you can begin playing to your strengths and outsourcing your weaknesses to others.

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Too much of a good thing

‘Too much of a good thing’ is a common issue in the world of personal finance and wealth building.

I know someone who is so focused on saving money that she’s lost sight of what’s important. She’s aware that it’s a habit – a good one, but one that’s stopping her from being able to enjoy her money. 

She worries about how much her husband spends on coffees for members of his team, but he enjoys this small, monthly act of generosity, and it’s not as if they can’t afford it. 

And surely this is what life is all about? We can use money to make ourselves and others happy or we can hoard millions out of fear.

I’m trying to help her find the confidence to stop saving and start spending.

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Getting the balance right

When working with clients who fear spending their money, I might ask them what they’d like to achieve in the next few years and long into the future.

Do they want to travel? Move house? Spoil their grandkids?

Together, we’ll look at how much money these goals will cost and develop an action plan to make it happen. Believe it or not, we can usually do this without depleting the savings account.

We’ll also assess timelines.

If a couple are wishing to move to the countryside in the next five years, I’ll help them determine whether it’s better to buy a house now with what they already have or wait until they’ve got a larger deposit. 

Should they buy a small cottage in cash or take out a mortgage on a bigger home? If they do the latter, they could invest in index funds with some of the cash they would’ve spent on the cottage. But perhaps they dream of the emotional benefits of being mortgage-free.

Should they sell their current property or rent it out? Selling their home would help them finance the new one, but the rental income could help them fund their retirement.  

Many couples will make these decisions by themselves, but there are so many rules, variables, and possibilities, it’s easy to miss things. And, more importantly, it’s easy to get fixated on the wrong thing and spend time and energy following the wrong path. 

It’s often not so much the money, but what you do with it that counts. With a financial planner’s help, you can get the balance right.