In 2007, I actually sought a financial advisor, developed an asset allocation model, and started to track my finances more closely than ever. All good moves, but after reallocating some of my investments, I made my third mistake:
3. Underutilizing Financial and Tax Advisors
I mentioned that I developed an asset allocation model with my new advisor (after lots of meetings and questionnaires, mind you). Nowhere did I say I actually read it.
I skimmed the hefty report, then tossed it aside. It’s hard to explain this incredibly lax behavior on my part. I called my advisor and asked her to summarize, then acted on what she said, yet the report remained shut. I am reading it this week, because after admitting my behavior here I am sufficiently humiliated. Shame on me.
But not reading the report led to even more bad behavior.
Because I hadn’t read it, I didn’t keep in touch with her the way I should have. As the market began acting up, I wondered whether I should reallocate my investments, but never reached out to ask. She told me my investments were long-term so I shouldn’t spook at the first sign of decline, but I still should have asked. She might call me if she sees trouble ahead, but there’s no guarantee. It’s my money, and I need to manage it, actively.
From this comes a goal. In 2008, I am going to check in with her on a monthly basis, even if it’s just an e-mail. It’s going onto my calendar so I can’t possibly forget.
Another mistake: Although I did my own taxes last year, I have a long-standing relationship with a tax accountant and planner, and as questions flitted across my mind this year, I didn’t call to ask them.
I’ve a sneaking suspicion that if someone examined my tax situation, they’d find I could actually donate even more to charity while optimizing my deductions. Last year I just gave as much as I felt I could, but I need to have both my advisor and tax accountant address this with me for 2008.
I’ve started a running list of questions for my tax and financial advisors which I keep on my desktop so I can jot them down as they arise. By March, I’ll schedule a meeting to address all the queries I’ve gathered to date.
If nothing else, I plan to learn from my mistakes.
Published or updated January 7, 2008.