Chapter 5: Learn or How the heck do I ensure I reach Financial Freedom come what may?

5.3 Collaborate with an Investment Advisor for Results and Mastery


Do you recognize that there are limits to how much you can achieve through a DIY investing approach? Outsourcing investing is not for you if you don’t want to give up control on how you money is invested. You need a fiduciary Investment Advisor, who is willing to work with you, and not provide you only advice. What more do you need from them? What is required for this to work effectively?  What fees and fee structure would be suitable? 
 
You often need help in areas that are important to you but you don’t have adequate knowledge, skills, resources, and time to manage it well. You need this even more if you don’t see yourself fully equipped to handle this any time soon.  Just like you need expert advice from a doctor, lawyer, accountant, you need advice for investing your hard-earned money. While this is necessary it is not sufficient to enable you to reach Financial Freedom come what may. 
 
I answered this in the section on Strategy under chapter 4.5 By Investing in Equity ‘Systematically’. The key question we addressed there was how do you ensure you or anyone meets the goals eg the desired rate of returns over long periods of time when you do not control what can happen. If anyone is guaranteeing this, he is taking you for a ride and is violating regulations laid down by SEBI. 
 
However, you need a way of achieving this and the answer you have seen is Investing Systematically: When your Investing Strategy is to Invest Systematically it means you follow a Process and have a System that enables you to implement the Process. More importantly it enables you to check and analyze the performance and improve the Process and the System. Essentially it enables you to do the PDCA cycle completely. 
 
The PDCA cycle, Plan-Do-Check-Act Process applied to your Process + System is what delivers results. It also enables continuous improvement in how you invest. It is in-fact a Learning Cycle and for you the route to Results and Mastery. 
 
Investing Systematically = Process + System + PDCA =>> Results + Mastery. 
 
Or Investing Systematically = (Process + System) ^ PDCA =>> Results + Mastery.
 
Because PDCA helps you implement the Process, use the System more effectively and continuously improve both which really gives compounding benefits and hence is much more than simple addition. 
 
And that is what your Learning Strategy-Stage 2 should aim to deliver. But it requires much more than a traditional Investment Advisor. It requires your Advisor to be your Coach and Partner. Let’s understand this better.
 

Who can be your Investment Advisor? 

The guiding principle for getting and also giving such advice is that the expert must not have any conflict-of-interest. That is the advice giver must not benefit from the actions taken by the client on the advice. So, a stock broker cannot be your stock adviser and help you build and manage your portfolio because they would earn money in brokerage when you buy or sell stocks advised by them. This creates the...........Read More

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