Financial planning

Q: I had a really bad experience with a so-called financial advisor several years ago. Since then I’ve kept my affairs pretty simple and done everything I could for myself. Because of that man I really don’t trust anyone any more. The problem is that things are getting complicated enough where I do need some help. What’s the balance between being gullible and getting the help I need.

A: The word you are searching for is trust, and it’s something a bad person caused you to discard as too dangerous to handle when it comes to money.

When I was about five years old, I stuck a safety pin in an electrical socket and quickly discovered the conductivity of metal and the shocking power of electricity. I thought I would never go near a light socket again!

Q: I have a friend who really likes to talk about his investments. He has an account he manages on his own, and he also has an account managed by a professional. He’s always saying he can beat the pro, but he never fires the guy. I think my buddy may be full of hot air. But shouldn’t a pro be able to beat an amateur? Otherwise, what’s the point?

A: A professional should always add value. Otherwise, as you say, what’s the point?

But whenever I hear someone speaking of investment returns using competitive terminology (so-and-so “beat the market”), I’m most often hearing the opinions of the inexperienced.

Q:  I know I should get on a budget. What’s the best app for that?

A: You say you know you should get on a budget.

But why do you say that?

After all, budgeting can be a pain. You already know that, or you’d already be on one. So why should anyone go to all the trouble of getting on a budget?

A budget is a spending plan. It may be simple enough to write on the back of an envelope. Or it may be so complicated that it fills up an electronic spreadsheet.

Q:  Should I be pre-paying my mortgage?

A: Why would you want to do that?

That’s not a definite “no.” But I do not consider “mortgage acceleration” a one size fits all piece of financial advice everyone should follow.

Q: I am very embarrassed by my financial situation. I know I need help, but I’m just too humiliated to let anyone else see the mess I’ve made. Every time I pick up the phone to call someone I hang up. What do you suggest?

A: I love your honesty.

If you’ve never seen the 2011 film We Bought a Zoo, you’re in for a treat when you do. Matt Damon plays a young widowed father of two. In one scene, he is giving his young son advice on the utterly confusing and intimidating topic of females.