Have you ever had a great coach? What was it that made them great?
Were they a great teacher? A great listener or inspirational speaker? Did they provide you with tough love? Looking back on your experience, what did you learn that’s served you through life?
Coaches are required to do a lot of things. They need to teach fundamentals and help players continually build new skills. They provide corrections when and where it’s needed. They help their athletes practice and train diligently so they can perform at their best when the lights come on.
A great coach prepares their athletes for peak performance. They position their players for success.
Today, we’ve got coaches for every aspect of our lives. There are life coaches, executive coaches, diet and exercise coaches, and financial coaches.
Should you have a financial coach? What do they help with? Why would you choose one over a financial advisor?
I started my career as a financial advisor in 2001 and I started a financial coaching company in 2015. There’s a big need for both types of professionals, because people have all different kinds of financial needs. It’s my goal to share my perspective on the value of working with a financial coach.
Here’s what we’ll cover:
- The skills we need to be good with money
- How to get those skills
- How a financial coach helps
Let’s get started.
The skills we need to be good with money
Personal finance is a lot. It starts with setting goals and putting a plan together for reaching them.
We need to understand the basics like managing cash flow and household budgeting. From there, we need to understand credit and stay out of debt. We need to be able to save money, and then figure out where we should be investing and how much. Then there’s insurance, estate planning and taxes. Once we accumulate enough to retire, we need to create a plan for generating consistent and sustainable retirement income.
And then we need to learn to deal with adversity like market crashes, inflation and whatever else comes our way. Like I said, it’s a lot.
If your initial impulse is to move on to something else, and worry about this stuff “tomorrow,” you’re not alone. And you also know that’s not a recipe for success. The real first step to personal financial success is taking ownership of it. There will never be anyone more interested in your financial success than you are. It’s time to start acting accordingly.
How to get those skills
Over my 20+ years of helping people get good at money, I’ve learned you need to meet people where they are. Some of us want to do everything ourselves, and others don’t want to do any of it. Most of us are somewhere in the middle.
Young people just getting started need different things than people who are retired and thinking about their legacies. In order to do a good job, I’ve created a framework for helping understand how to get the skills you need to be financially successful.
There are three tiers; DIY, Invest and Partner.
DIY
Just as it sounds, it’s more than possible to do personal finance yourself. There is literally a limitless amount of information on every imaginable topic available through our smartphones. Everything you need is a Google or YouTube search away.
If this is the route you decide to take, I encourage you to seek out information from several sources on each topic. One of the maddening things about personal finance is that there’s not a “correct” way to do things. For every person telling you stock market investing is the path to wealth, there’s someone advocating for real estate or crypto investing.
Take the time to gather information from a variety of sources and decide for yourself what makes sense.
Invest
This means you’ll spend money on your personal financial education. Most commonly through a course of some kind. We’re fortunate there are a lot of smart people who have taken their time to put their knowledge into an online course.
Investing in a course can be a great way to benefit from someone’s expertise and experience. Should you decide that an online course is the way to go, be sure to look into the creator to make sure they know what they’re talking about.
Partner
The third tier is about finding someone you can team up with to get the job done. This can be a financial advisor to help you with your investing or to develop your plan, an accountant to file your taxes, or an estate planning attorney to create a trust.
When you partner with a professional, you not only benefit from their expertise, you also benefit from their wisdom and experience. While you’re not handing over complete control, you are outsourcing a portion of your personal financial life.
Even when you do partner with professionals, I still want you to think of yourself as the CEO of your financial life. You’re still the one in charge. You’re still making the final decisions.
As you’re thinking about how best to proceed, your answer may be a combination of some or all three of the tiers. Depending on where you are and the life stage your in, you’ll gravitate towards the solution that’s best for you.
How a financial coach helps
“If more information was the answer, then we’d all be billionaires with perfect abs.” – Derek Sivers
That’s such a profound quote. I’m sure you’ve felt, as I have, like you’re drowning in information. There’s too much of it, and not enough wisdom.
Going back to the three tiers, a financial coach falls in between Invest and Partner.
A financial coach won’t “do” the things for you. They won’t make investment, tax, estate planning or insurance decisions for you. Rather, with a strong knowledge of every aspect of your financial life, they’ll coach you in your decision-making process.
They’ll help you determine what new learnings you need, help you gain the required knowledge, and guide you in your decision-making process. From there, they’ll help you execute and put everything in place.
Why consider a financial coach over a traditional financial advisor? 9 times out of 10, it will be less expensive. Most financial coaches charge a flat and transparent fee. With my financial coaching clients, I have one to two sessions a year with them. I’ve found that’s ample time to ensure everything is moving in the right direction.
Making it real
I think taking a hybrid approach and utilizing all three tiers makes sense. There are many aspects of personal finance you can learn on your own. You’ll no doubt greatly benefit from online courses. And there’s no substitute for one-on-one interaction.
I’m biased, but I’d love for you to check out our Academy Coaching Program. It provides that hybrid approach for a reasonable annual fee.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course.
Connect with one of our Certified Partners to get any question answered.
Stay up to date by getting our monthly updates.
Check out the LifeBlood podcast.
You’re capable of becoming financially successful. Let me know how I can help.