The value of advice when it comes to choice
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We live in a world where our choices are almost limitless. Just a visit to the grocery store shows how many choices we have i.e., white bread, brown bread, multi grain bread, black bread…. with these everyday choices we have become very good at understanding our favourite or the type we need, but what happens when it comes time to decide on something we know very little about?
Superannuation comes to mind where we have lots of choice, know very little about and often feel unsatisfied with the choice. This phenomenon is important to understand and can be illustrated by my current bathroom renovation. I found choosing the vanity and basin an easy task as I only had limited choices considering the dimensions and style we wanted, however when it comes to the tile choice, we have become almost paralysed by choice and the possibilities. Here’s a great analogy I heard from my colleague the other day, ‘If I was to smash a goldfish bowl, the goldfish has limitless choices and freedom of where it can go but is paralysed to do so’.
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When understanding the correct super fund to recommend to my clients, we have 1000’s of options to choose from, so how do we help with this choice:
- We help avoid basing a decision on fear. Basing your life choices on your fears rather than goals is a problem. You see this when people invest in cash as they are fearful of the market. Investing based on worst case scenario’s is a false strategy as the worst-case scenario is rarely as bad as we believe it to be.
To help with this problem, we help clients make decisions with some perspective, is that problem (i.e. Russia invading Ukraine) really going to be a problem? And how do we mitigate against the risks as we choose.
- We help you base your decisions on your values. This can include, price i.e. you want value for money. Ethical investing, you want to avoid polluting industries.
- Get good quality advice from someone you trust and who is informed. This can include friends and families who know you well but it’s important to make sure you receive advice from professionals, before making significant financial decisions.
- Lastly, be mindful of becoming indecisive and waiting until you have all the information. The greatest enemy of a good plan is waiting for the perfect plan.
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Be great to hear if you’re facing any problems with choice and how you overcame this or wish to have a conversation about how we can help.
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