posted on May 8th 2019 in LA/OC CFP Team Posts with 0 Comments /

Analysis paralysis — we’ve all been there at some point. I know I’ve been guilty of it. As a financial advisor, I see it all too often with millennials and Gen Xers when it comes to financial planning. And for even bigger topics, like retirement planning, it can feel so daunting they choose to never even start. Big mistake.

Significant value is gained by starting to save or invest — even on a small scale — just to get comfortable with it. Financial planning is a long game; nothing is ever going to change overnight, so even taking incremental steps is better than doing nothing at all, and you certainly don’t have to fear facing a make-or-break moment.

A great analogy that makes my point comes from the world of technology. In the old days, companies like Microsoft and IBM would work for years and years before launches — trying to perfect things before having their make-or-break moment with customers. Today, technology launches happen much quicker — usually before perfection — because developers know they’ll be making small tweaks along the way to fix bugs users discover.

In the modern scenario, the make-or-break moment is gone, and the same can be said about the actual process of financial planning. It used to be that advisors would meet with clients for hours to try to map out a plan for the next 30 years — providing way too much information to comfortably digest. Today, a new generation of advisors chooses to speak briefly with clients on a more regular basis, providing information in bite-size chunks and discussing actionable goals — reducing paralysis by using a much more efficient game plan.

Using our old friends Jack and Jill, here’s the difference between being paralyzed and being proactive:

Jack is so overwhelmed by the prospect of discussing his financial future that he’s frozen; he just doesn’t do it. When he does make changes, they’re motivated by emotions — maybe something he saw in the media or heard from a friend — so he’s reactive rather than proactive. He might feel like he’s doing a great job, but he’s not getting timely feedback from an expert, so he runs the risk of having to correct costly mistakes at some point.

Jill talks frequently to her financial advisor, so he can weigh in on important decisions she may be making, such as buying a car or house, changing insurance, or changing jobs/rolling over a 401(k). Her advisor also explains finance-related situations as they arise — allowing her to understand the pros and cons — and helps her stay on track with her savings/investment plan.

Who do you think will be better off as the years roll by?

It’s not hard to be like Jill, especially given all the technology at our disposal. I’m available to clients anytime via video chat or a traditional phone call, and we can even do a screen share if appropriate. I want to be involved in the decisions they make that can affect their long-term financial health, such as 401(k) contribution changes or figuring out how much of their portfolio to sell to buy a house. Financial advisors can help be the antidote to paralysis.

about the author: John Chapman

JohnChapman640x640John Chapman CFP®, CKA® understands wealth management is as much about the relationships as it is about the numbers. Strategy, experience and knowledge allow him to create the financial solutions to catapult his clients toward their goals. With WorthPointe’s sophisticated technology at his fingertips, John loves helping families and businesses organize their finances and secure peace of mind surrounding their wealth.

He prioritizes his clients’ values and takes the time to listen to their unique stories. Together, they articulate a clear vision and map out a financial plan to support it. Innately fascinated by the financial markets and global economies, John has a healthy obsession for tracking market trends and formulating projections to better inform his clients about the future ahead. Proud of his CERTIFIED FINANCIAL PLANNER™ certification, John holds himself and his practice to the highest ethical standards and client commitment.

Learn more and/or contact John

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