When I was a teenager I suffered from migraines, as I have grown up the migraines have almost stopped. However, every time I think I am about to have a headache (which then potentially could turn to a migraine) I take tablets. There is an argument that if I didn’t take the tables then I wouldn’t get headaches and they wouldn’t turn to a migraine however I take the tablets and as a result of it I feel a lot better.
When we consider what is happening in the developed world, especially the US and the UK we don’t know what would have happened if quantitative easing had not happened and interest rates crushed down to all-time lows. But what we do know is that the US is starting to show positive signs and is an economy coming back to life. Despite those who would like to think differently I think over the next couple of years the UK will follow. If they hadn’t done this it is likely we would be in a very different place.
My recent blog discussed the value of paying a fee to a financial planner and how actually the value is greater than what we tend to think it is. Paying a financial planner is not just about how the money is invested but about listening to what someone wants and drawing up a plan to deliver on that. Effectively it is about peace of mind.
Going back to my headline should we take the tablet or not, if we take the tablet and pay for financial planning I would argue that for the average investor they will be in a much better position than they would have been if they had not. Let me give you an example, I know someone who has been saving for a deposit for a house since they were 18. They have been saving for 8 years and have around £40,000 in cash. They have no idea whether the money is in an ISA or not, or any idea what interest if any they are getting.
If they had taken the tablet it is likely they would have been in a much better place today. The tablet helps people draw up plans, think rationally and gives them peace of mind. I take tablets and I don’t get migraines. If I didn’t take tablets I could possible get migraines and I am not prepared to take that risk. There are investors who will take that risk, who will plan and they don’t need to take tablet but we are talking about a minority and not the majority we are led to believe.
So if you are an investor and considering whether to take the tablet or not, consider this before you make the decision – by not taking the tablet are you prepared to take the potential consequences of what could happen by not taking it? Remember those who offer you DIY solutions are not out there to help you, other than potentially save you money? If you are not then take the tablet and seek advice, a fee up to 1% could be the best investment you ever make.