Episode 22: Becoming a DIY (Do-It-Yourself) Investor

ABOUT THIS EPISODE

On this episode of the Build Your Life Podcast with Financial Expert John Browning, we're discussing why some investors decide to become DIY (Do-It-Yourself) investors and why this might be a big mistake.

These days it seems like everything is DIY, but John explains why this could be devastating to your portfolio. Why not just search Google and do it yourself? Stop and consider for a moment that you might be wrong. Listen in as John breaks it down for you and you might just rethink things.

For more information, visit www.GuardianRockWealth.com to learn more about what John can do for you. Or, give us a call at (312) 372-5000.

Welcome to the building your life podcast with John Browning. Building your life is a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth in Lake Forest, Illinois. He's also the author of the Book Build Your Life, not a portfolio, a guide to your financial future based on your personal values. Now you can purchase John's book on Amazon, or you can stay around to the end of today show and I'll tell you how to get a free copy milk right to your door. I'm Michael Lawn, your host for the next few minutes as we chat with financial expert, business owner and author John Brown well, good day John. How are you doing today, sir? I'm doing well. How about yourself? How are you doing? Fabulous. It's a great day. took a walk earlier and just love getting outside and seeing the sunshine and enjoying life. Yeah, it's all good. Finding some months get yeah, I got some balance exactly. Work a little bit, go take a break, work a little bit, go take your break. I'm trying to figure out how to weave into my routine a nap in the afternoon and for there you go. All right, let me know if how that goes, because I need to figure that one out too. I will and maybe when I'm done I'll write a book on it. You know, hey, everybody does that, especially because, you know, sometimes I find myself getting tired, especially after the weekend. Weekends are meant to Rejuvenat us. But what I find John and, is on weekends I'm doing these projects around the house, the these DIY projects, and I go to, you know, one of two of my favorite big box stores and you know, they have everything that I need to get my project done. This last weekend I was I was doing some stuff, painting type things in my bathroom and I was at the store like three different times because it just wasn't working. That my diy project turned out to be. I mean it, I got it done, but it took most of my weekend. And we see shows on TV about diy and we all know what diy what do it yourself, right? We all think you want to save time and money when we do it yourself. And I don't know how handy you...

...are, but I got my my handy jeans for my dad and they were not very good jeans. He was not a handy guy. So my diy projects wear me out and they don't ever turn out the way they I envision them. But let's talk about diy when it comes to investing and planning for retirement and the world that you live in, John, because I know, I know, there are a lot of people out there who, like me and my home projects, think hey, I can I can do this myself. I've got the Internet, I've got all the information I need. Talk to us about somebody who's research, done all their research and and they're ready to do their own diy investing. Just talk to them. What's is that? Good, bad and different words and pros and cons. So my first question to those folks is, you know, do you do? You really get a lot of joy? Do you truly enjoy doing that? That's number one question, because if you're and again this goes back to the book I wrote, build a life, not a portfolio, is if you're spending all this time and you don't truly truly enjoy it, then we only have so many days here. You want to do what you loved and you want to spend time with those whom you love rather than sending time in front of a computer. And one of the things that that I do. You know, I love it, right, it's my job and I actually have I pay for certain tools that you know, everybody thinks everything's free. I will give you just a hint. If you want the good information and and accurate and trustworthy information, you're probably going to have to pay for it. Yes, there are some there're some good sources that are free out there, but you're not going to get the whole thing. Nobody works for Free Right. Just doesn't happen. That's as we'd like to think it does, and as much as sometimes the advertisers would like us to think that as well, it just...

...doesn't happen. So you know our do you really have the right tools? I don't know if you've ever tried to do a job where you didn't quite have the right tools like that. Every job that I try to do around the house, John, I find I need I need one more tool, yes, one more tool. And and sometimes, if you're like me, you'll try and do it with that screw driver that's just a little bit too long and you just can't quite fit it in there. But you're not going to go to the store and buying a little shorter, stubbier one just because you got to get that one screw in right. But and then a little behold, it is up taking you longer or you don't even know what the right tool is. That's another favorite of mine when you're working on the car. Yeah, and it's a I didn't know they made that tool, John. Yeah, yeah, I remember the first time that I found out that they made a specific tool for this Toyota that I was working on, and I went out night. I did get it, and this is when I was younger and I actually did my own work on cars. I don't do that anymore because, yeah, I like, I like my life, but I found this is this tool, and also the whole job was way easier, but I had to go out and I had to pay like big money, is like seventy tool, but it did the job basically for me, you know. So that's part of a too, is having the right tools. Do you have the right tools to really do this directly? And the next thing is one of the things that I really never was comfortable doing as my brakes. Yeah, sorry, no matter how much work I would do on the car, the engine or they and why do you think that is safety? If you mess up your brakes. You could die right that that's the could be bad. Consider the downside consequences. We actually do have a client that that that really does enjoy it but realizes that they don't have the...

...resources or the expertise. You know, I've been doing this thirty years. It's just what I do. Worked on Wall Street and it's it comes a lot of this come second nature to me. So he has a certain portion of his portfolio that he does all himself. And you can set up those accounts on the e trade fidelity or swab or wherever you like, and you can take a portion of your portfolio if you really enjoy it and and do it yourself. But I would caution against that. What's the downside risk of putting your entire nest egg in your own hands? And you can be pretty confident and I've been. I know I have been supremely confident before and I have failed miserably. So consider just for a moment. There's a famous quote on this. I can't remember who said it, but consider for a moment the idea that you might be wrong. And that's something I do every day, even with investing and investing for client accounts, and I will ask other people on my team, but their opinion is and what I'm missing, because none of us are infallible. So just consider the downside risk. If you're going to be a DIY investor. You know what's the downside? Could I completely eliminate or eradicate my retirement for that made the goal that I have to send my kids to college and unfortunately, Michael, I have actually spoken with people who have come to meet too late and you know, there's there's only so much catching up you can do and it's just a really painful and sad experience. We do what we can for them with the time that we have, but it's just really too late thing. It's some serious damage has been done and just consider that the outside risk if you're going to do be a dotyourself. Yeah, and that that's good. It reminds me, and I'm going to slaughter this quote, but you might be able to help me with it, and it really it's not around the financial world as more around the legal world, but as when somebody goes to court and represents himself and in...

...somebody said that if you know when you do that, you've got a what a fool. For our client and terrible attorney or something like that. I'm sure that plays over into the same thing that if you don't have the experience and you're just working on I'm sure there's lots of great information on the Internet, but it's surface level information, and we just talked about this in the last episode and in multiple episodes of how deep you dig into companies and corporate structures and people and management teams, how deeply you dig in with your clients and understanding their values to pull those things together. And I think, John, this is your full time job, right. This is my fulltime job. Yep, this is what I do. So I'd wire on investing is really is trying to make this a parttime job. And if you want to set something up and say I'll check back in six months they see how we're doing, you're probably they're probably missing the boat on a lot of things when you say now, that's that's right. And and another example that I that I use in this is very true, and I actually I'll use myself and as as an example here. We have a myopic view of ourselves, right. We it's the same reason that you don't like a doctor doesn't operate on himself. He and he doesn't treat himself, generally speaking, and he doesn't treat family members. They won't even let of the doctor, who's a family member in the room right because they want to micromanage. They know too much, but they're too close to it emotionally. With my own portfolio, I have somebody else look at my own portfolio and it's just it just makes sense because you know I'll get it emotionally at. I admit this, I get emotionally attached to a particular position in my portfolio. Yeah, it needs to be sold. And my partner takes a look at that and he's like, John, why I needed something here, and you know I try and be good, but you know, it's just is who we are, is we're human. Yeah, so that's the other caution for sure. Well, that's...

...good and well. And here's I assume that. I mean this is an objection right to going from diy to work in with somebody like you. Is John, I love I just don't want to pay the fees that are involved in all of that. Talk to me about that. Well, there's so there's there's several things. Yes, like I said earlier, if you want quality work, you're going to have to pay for that. If if I want to quality job when I have somebody put a roof on my house, going to have to pay for that same thing. Working on my car, my plumbing, my electricity, or you name the project that that is not my full time job, then I'm going to have to pay for that. It's not that you should pay too much for it, but the other thing is there's a lot of hidden costs. Despite all the work that has been done to make things transparent, there's a lot of hidden costs out there. And if you're investing in, say, a financial product, what are the costs that are built into that financial product? And it is good to compare and understand. If you're talking with a financial advisor, what are their fees? Besides their fees, do they make any money doing anything else with your account? Are they also a CPA the take care of your taxes? Do they do the legal work as well? And, frankly, for guarding rock wealth, we did not want to do that because we want no appearance of impropriety. So we outsource that. We've got great partners for the legal and the tax side of things and we concentrate on the planning and the money management so that there's never any thought that were making money because we made a particular recommendation that had a tax consequence or a legal estate consequence that made us money on the legal side or the or the accounting CEPA side. So we have a CPA on staffs. We understands that, but we don't charge for that.

We outsource that to a trusted partner. So what are all the fees that are charging? What are the potential pitfalls and and ways that just might be a temptation of the financial advisor or yourself. and Are you if you're doing yourself, or are you able to dig down into all the perspectuses, which is that big tissue, paper thin thing that you get from all all you know, anything it's change traded that you buy, you're going to get a perspectus. It's not exactly environmentally friendly, but at least now there are ways that you can email those things right right. That's that's way. It's easier hit the the late button and throw away right for us. They don't want to. Can't see that. I know I said that line, ever, because they yeah, they're important, but I don't want to read through it all, John. That's why I want you to do it right and and know what those hidden expenses are. Well, and the other aspect, guys, I assume they're from, and there are dozens of studies out there that on average, somebody like you who's an expert at doing this, if I go against you at the same dollar amount over time, you're going to outperform me my nine times out of ten. There's always an exception, but by and large you know what you're doing and I think I know what I'm doing. But if I'm scared because I'm paying a few fees here or there, what's going to happen is I'm actually probably going to eliminate all those fees and gain some more money when I have a professional doing it versus me. That's certainly the idea and we found that to be true. It's again again. There's so many hidden things. And the other thing that you'll see and that do it yourselfers, and I'm not disparaging to do it yourself, which if that's what you love to do and you have the time, and I would say that if you've got a day job and you're working eight hours a day or so at a day job, you do not have the time because it's just too much information to know. But if you're retired or something like...

...that and you really have the time and the expertise, you do yourself, it's you know, go for it. But there's there's there's things out there on the Internet that will pull you in because as free you know, quote unquote, and they'll say things that I hear this all the time. This is the person that called the Internet crash in two thousand. This is the person that called apple when it was a dollar a share or Amazon when it was two dollars a share. This is the guy, as if that's the only person that did that. Or you know, well, what is he done for me lately? And they of course, they don't usually mention what they've done for you lately. They just use that as all I better listen to this guy. And there's a there's thousands of them out there and and they get viewers and then they get advertising dollars from you sort of clicking on their on their thing that they do, and a lot of times they'll eventually try and charge you as well. But they're not licensed professional or they're not license typically speaking, you know with the SEC and all that, right, don't the regulations that we have? Yeah, that's just another caution. Well, it is, and that's good. And the and you mention something earlier on about one of your clients who's retired, to think, and he has a portion of his portfolio that he invests himself because he likes to do that and that's always an option for somebody there. But but you need to look at the broad picture, set your goals for retirement. That's the last episode that we talked about goal setting, the importance of that, how to do that. So make sure you listen to the last episode on Goal Setting. But you're not opposed to it. If they've got their their portfolio set and they say, John, I want to take this ten percent of my portfolio and and I want to do it and see how I do, that's great. That's part of the portfolio. But that's okay. Right, that's okay. And and typically what we'll find is that is the people, folks like that, will concentrate in an area like they really know the technology space and...

...they like to buy things that they know and you know, maybe they're a big gross stock, but what they're not as good at is creating a balanced portfolio that protects you in times like March and things like that. Make sure that you don't, you know, the bottom doesn't drop out of your portfolio right as you maybe need some money to live on or something like that. Well, and the other aspect is when you're doing it yourself. I I do this on my projects at home all the time. Is, how do I know that I'm really doing this right? You know, I was mixing some plaster to do some stuff on the wall right and they said, all right, for for this much water in with all this mixture, and I I'm like, how do I know if it's the right mixture? Well, somewhere between pancake batter and peanut butter. Well, that was helpful. Thanks, right, but if a guy does that, I had a friend come over who just does drywall stuff all the time. He's like, well, know, you do it like this, and there it was. It was perfect. I just don't know. And the same thing holds true with investing. How do I know I'm doing it right if I'm doing it myself right? And that's why having somebody like you, John, that you know can pick up I can pick up the phone and call you and John, here's the thought. What do you think? Am I okay? Do I need to rebalance? You have that with your partner and your own portfolio? R Right, it's John, time to change. Or John, you're doing just right. Yeah, and and I love that that, even with thirty plus years of experience doing this, John, you don't diy your own investments. Yeah, you have somebody look, somebody else look at it, and that that just speaks integrity and smarts. So encourage, let me encourage our are your listeners, to just reach out to you. Go to your website, get a copy of your book. Build a life, not a portfolio. He'll help you understand how to do that. Have a conversation with a have a zoom call like this. He's this, he's this way all the time. So you can really enjoy talking with John and understanding, goal setting, what we talked about last time, but understanding if you know what are the...

...pros and cons of doing yourself, doing it yourself in retirement, what are some of the risks and how do you how do you make that part of your report folio if that's part of your band? John will talk to you about all of that. So great episode. John, I I'm going to have to call you in next time I do a project around the house and but that's okay. Making sure that we do it right, making sure we have the right information, have the right tools and really having somebody as a lifeline that we can call who's guiding us down town, down the path to a solid financial future. Wherever you are, where the retirements beckoning at your door, or whether you're twenty or thirty years away from it, having somebody like John Helping you navigate everything is really, really helpful. So, John, thanks for thanks for doing this podcast and letting us have just bite size pieces each and every week to understand a little bit more how we can build a life, not just a portfolio, and how we can set ourselves up to have a great retirement when that day comes. Appreciate you, all right. Is My pleasure. All right, you, take care, have a great week, buddy, you too. So thanks for listening to the building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it is released. Have a terrific day,.

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