It seems weird for me to suddenly talk about DIY or “do-it-yourself” with regards to investing. After all, investors with Fundsupermart are all DIY investors. But I still believe there are many people out there who do not take charge of their own finances, and yet, it is a very important decision.
There are so many reasons I have come across for people who do not want to DIY. But one of the biggest reason is that there is a spouse, a relative (father or mother), etc who is better and that relative handles it all for them.
This is not a very good reason I feel personally. Especially if the trust is to such an extent that they have no idea what is being done to their money, just that this trusted relative manages it for them. First, about the spouse. Let me state that no matter how secure a person feels about a relationship, at the very least, one has to know what your spouse is doing with your money.
Not asking might seem like the ultimate in a trusting relationship. But its your money, surely you have a right to know what is being done to it? For all you know, it was put into some risky business venture, and its all gone, if you never asked. Just because one’s spouse in more knowledgable in investing does not make him or her the best person to handle your money. You are the one that knows best how much risk you can handle.
Also, at risk of being overly brutal, divorce cases are going up, and money is often one of the factors that break up a marriage. No matter how much in love you might feel, one should always maintain a certain amount of independence. Relying on your spouse to handle something as important as your investments is a dependence that is very dangerous. What happens if the unthinkable happens and there is a divorce, by then, trying to think back and track and get back whatever money you placed with your spouse would be a very difficult task. Yet, it could be money you have saved for years, meant for retirement, kids, etc. And to lose track of all of that because it was “handled” by your spouse would be terrible. Imagine if he or she turned around and said that it was all lost in a huge market crash, or some risky overseas venture. You would have little recourse since you were the one who willingly left everything to be managed by your spouse.
Also, even if it didn’t happen. People can die. So, if you chose not to know anything about how your investments were handled previously and if your spouse (touch wood) suddenly passed away. Now, on top of the grief of losing a loved one, you would have to grapple with investments, which at this point, you might have no inkling or idea about.
This happens to anyone you place a huge amount of trust in managing your personal money on. No it your spouse, relative, etc. Things may change. One thing that doesn’t change though, is your own knowledge and your own motivations. No matter what, you will always be looking out for yourself, when you are managing your own money, and any knowledge that you gain with regards to investing, stays with you. They don’t disappear if someone died, or if your stock broker quit or something.
So, I am talking to my wife, trying to teach her more gradually about investing, even though she is exactly such a classic example. She nods off five minutes into a conversation about investing. And I mean to teach my kids about investing when they are young. Its always better to be well informed, and such investment knowledge can only be an asset as you get older.
So, go the DIY way. Take control of your own financial destiny. Only you know yourself best.
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