For the Investment Phobics...

There's statistically significant portion of the wealthy population that can be categorized as investment phobics. You may even be one. Here are some of the signs:

  1. You can't stand the idea of managing investments
  2. Technical investment jargon is maddening
  3. If you have to get involved at all, your decisions are based on trust or gut instinct (such as choosing an advisor)

And that's ok. Especially among married couples, there's often one among them who shows some characteristics of investment phobia, so advisors are accustomed to shifting the conversation away from one spouse to the other. That can work, as long as the decision-maker in the marriage isn't also a phobic. The question for today is: What do you do if you're on your own?

What follows are specific suggestions for those among you who are investment phobics and are also in the driver's seat for financial planning/investment planning decisions. (Note: it doesn't necessarily mean that the money is yours. A common example is a adult child making decisions for their parents.)

  1. First of all, stay calm. You can successfully navigate through these decisions without taking classes or earning yourself a financial planning designation.
  2. Find an advisor. Your friends, family, or coworkers will all have ideas about who might be a good fit. Start looking for someone who meets some of the tenets of modern financial advice (fee-only structure, goals-oriented planning, and evidence-based investing).
  3. Ask questions in your own terms and your own style. People are sometimes burdened with the idea that they must translate everything into industry terminology. That's your advisor's role.
  4. Keep it simple. Goals-oriented planning can be more approachable than you realize. Your advisor will help you identify a purpose for your wealth and design a plan with that goal in mind. Even a phobic can get comfortable with a process like that.
  5. But if you still aren't comfortable, feel free to involve a friend or trusted family member. It's actually quite common.

And just like that, an investment phobic can conquer their fears and build a sound strategy for success in their investment plan.