What to do if you are not ready for financial advice… yet  

Last year, I wrote a blog outlining how to determine if paying for financial advice makes sense for you. In short, you need to weigh up the potential value a financial advisor can deliver against their fees. To do this, typically, there are four main considerations: the size and quality of your existing investments, how much you intend to invest each year, your own capability to make smart financial decisions without advice, and the complexity of your personal financial circumstances. 

At the end of that blog, I recommended a DIY approach if you decided the timing was not right to seek professional financial advice. In this blog, I would like to expand further on that DIY strategy. 

Two types of financial decisions  

I categorise financial decisions into two types: straightforward and complex. 

Straightforward financial decisions are those where the right answer is obvious if you follow an evidence-based approach. That’s precisely why I wrote my book, Investopoly, back in 2018. My goal was to outline a set of 8 fundamental principles that anyone could use to guide their financial decision-making. While I acknowledge that what’s obvious to me might not be immediately clear to everyone, once you understand key financial concepts and fundamentals, it becomes relatively straightforward to identify the correct step.  

For example, the key to building wealth through property is to benefit from decades of compounding capital growth. Therefore, it’s clear that someone just starting their investment journey should prioritise property investment before considering assets like shares or superannuation. This isn’t my opinion – it’s basic math.  

Complex financial decisions, however, are not straightforward. They usually involve greater complexity, multiple viable alternatives, or situations where it’s unclear which option will deliver the best outcome. When the right path isn’t obvious, and the stakes are high, it’s essential not to guess. Instead, this is exactly when you might need expert guidance to make the right decision confidently. 

Typically, investors do not face complex financial decisions in the first 10 to 15 years of their wealth-building journey. This means that people in their 20s and 30s can usually start investing without needing to involve a financial advisor until later, often in their 40s or 50s, when their circumstances naturally become more complicated. 

How to navigate “straightforward” financial decisions  

I believe that most people can confidently navigate straightforward financial decisions using a two-step process.  

Firstly, you need to educate yourself. You don’t have to become a financial expert, but you do need to clearly understand the fundamentals. The best way to achieve this is by reading or listening to independent educational resources, such as this blog. Our firm earns its revenue solely from providing advice – we don’t sell investments or products – so what I write isn’t influenced by any self-interest. The risk with relying on education from someone who is trying to sell you something is that their guidance may not be balanced or impartial. Remember, financial fundamentals are the rules that guide investment decisions. These fundamentals are usually facts rather than opinions, have been around for decades, and are grounded in sound logic and basic maths. 

The second step is to find a mentor. While this could be a friend, I believe the best mentors are usually professionals who already work for you, such as a great mortgage broker or accountant. 

Now, I must clarify that I’m not suggesting you take financial advice from just any mortgage broker or accountant, especially since they typically are not licensed to provide formal financial advice. However, there are some accountants and mortgage brokers who are particularly financially savvy, often because they have actively built wealth for themselves. You need someone whose primary motivation is genuinely helping people – there are a few good ones around.  

A good mentor can steer you in the right direction, stop you from making costly mistakes, and perhaps most importantly, connect you with their trusted network of professional advisors. 

When navigating straightforward financial decisions, most people do not require extensive guidance. Usually, they just need reassurance that they are on the right track and assistance finding the best professionals to implement their plans. This is why having a professional mentor can be incredibly valuable. 

How to find a mentor?  

The best way to find reliable and trustworthy professionals is usually through referrals. Ask people you know and trust, especially those who have successfully built wealth, who they would recommend. 

If referrals aren’t an option, another effective method is to look for professionals who actively produce content such as blogs, podcasts, or articles. Typically, people who genuinely care about helping others tend to share their knowledge freely without any sales pitches.  

When will this approach not work? 

If your financial situation is complex or you have several investment options to weigh up, then your decisions probably are not very straightforward, and you may need to engage a financial advisor. 

Another scenario where this approach might not be suitable is if you have low confidence in your ability to understand and apply investment fundamentals. Some people naturally grasp financial concepts and find investment decisions intuitive, while others struggle. If you are in the latter group, it’s likely you may benefit from engaging an advisor, even if your financial situation is not particularly complicated. 

Case studies: How this approach could turn out for you 

The sole aim of this blog is to educate readers. I never want it to become a sales pitch for our business. However, I would like to share a couple of real client stories that illustrate the value of having a professional mentor to guide decision-making and refer you to other trusted professionals.  

About two years ago, a new client approached us. It quickly became clear that purchasing an investment property was the right move for him. We arranged finance and introduced him to a fantastic buyer’s agent in Brisbane. The client purchased a house in mid-2023 for around $1.1 million, earning $850 per week in rent (4% p.a. yield). His plan was to acquire a second investment property as soon as feasible. Recently, we had the bank revalue this Brisbane property, and it came back at $1.4 million. As a result, the client can access the equity in this property and has pre-approval to buy another property in Melbourne – in time before its next growth cycle.  

Another example involves a client who has worked with us for more than 16 years. Back in 2015, we recommended he stretch financially to purchase his “forever home” in Perth, initially renting it out to benefit from negative gearing. Implementing this strategy had its challenges – both from our perspective regarding borrowing capacity and from his perspective in terms of cash flow. However, the client has since acknowledged that had he not followed our advice, he would now be priced out of his desired suburb. He purchased the property in mid-2015 for $1.2 million, and today, it is estimated to be worth more than $2.5 million. This single decision has provided substantial financial and lifestyle benefits. 

Do you have a mentor? 

Surrounding yourself with excellent professionals, including a mortgage broker, buyer’s agent, and accountant, will greatly enhance your ability to build wealth. Ideally, one of these professionals should be able to mentor you through straightforward financial decisions, delaying the need for a financial advisor until your situation becomes more complex. 

Sidebar: It would be remiss of me not to mention that the team members at ProSolution who offer taxation and mortgage broking services are eager to mentor clients in the ways described above. They have access to a wealth of internal and external resources to support this and are more than happy to help wherever possible.