Do I really need an adviser, can’t I just invest in a set of equity funds by myself………asked a doctor.

I said….

Sure doc finding some good mutual funds to invest is something you can easily do on your own, and you can invest However, let me tell you that ‘choosing funds’ is about 5% of the IFA’s job. Most of them would go far beyond that.

Pushing you to invest a little more than you can: exactly how the gym trainer makes you do the 20 reps 3 times instead of just 2 times. No automated software can do that, can it?

Holding your hand through bad and turbulent times.

Pushing you to nominate, make a will, buy the correct term insurance. Sure you know many of these things, but that extra push or prod comes from a good adviser.

And doctor please get a good adviser. Ok I mean get your self a good CA for your accounting work and tax work. Try to involve him more in the business by discussing pricing strategies, discounts, and payment guarantees. Get yourself a good IFA/RIA to advise you on your investments. The 2 roles are very different.

Also doctor, since you are a successful doctor, most of the CA who come to you or IFA will be intimidated by you. Put them at ease. LISTEN TO THEM. Don’t just say what you know. That is irrelevant. Hear him/her out, and then have a discussion on another day when you have done your research better. Most young professionals say 30 years of age will be intimidated by your age, white hair and your awesome net worth. However, I know it can do with some help. For example you are yet to make a will.

Assuming that you go the index fund route (you will have nothing to discuss in a party!!), you still have dozens of index funds to choose from, as many focus on specific segments  – Sensex, Nifty, Msci, small-cap, growth, value, and in India, very sadly not enough, or not many index bond funds. How will you select an index fund for bonds? And if you are a real index loving person about 40% of your money should be in US equities…that is the essence of indexing.

Once you have identified say 4 funds in which to invest, you still have to decide on how much to allocate to each of these funds. Who will help you do this exercise? You need to be clear that what you need is return without taking more risk than necessary. Risk management is about taking risk ONLY if you have to. Not just because you CAN take risk.

Understanding risk tolerance tools is very different from implementing them. Also tactically when to shift to debt, how to withdraw, buying an annuity (i mean at what age to buy) are not decisions you really want to depend on free websites and wassup group. Too much of free, irresponsible advice is available. Do you really want to take that?

Investing and managing one’s investment is rewarding, but very very boring. It also involves a lot of self doubt, self questioning, self criticism, measuring against benchmark, etc.  What you really need is a realistic self-assessment of what you want to do. You have to determine whether you’re comfortable taking on these financial issues on your own (during your spare time) and decide if you can address them adequately. If you’re confident that you can, fine. Go for it.

Remember, what sounds easy conceptually, may not be achievable realistically.

Many people can. Many, many, many people cannot.