Everyone should have the unique experience of moving into a new construction home at least once in their life, if for no other reason than to know exactly how inept about some things people can be. In this case, I am “people,” and clearly dealing with new construction and developers is outside of my “sphere of excellent.” Financial matters – yes, investments, mortgages, financing college, planning for retirement, squeezing every last ounce of value of a dollar – I’m good. Picking tiles and paint color, not so much . . .
You say, “yeah, so how does this have anything to do with a financial planner???”
wait for it . . .
At the beginning of the process, my wife said to me, “we need to hire an interior designer to help with the decisions about the house.” Now for me, when I hear the term “hire an interior designer,” I think “waste of money,” but we were pressed for time and if nothing else the designer could help expedite the process – she speaks the same language as the builder; I agreed to meet with her and hear her pitch. What happened next was truly amazing.
When I sat down with her she gave me her credentials, “designed the home of Pierpont Moran this and Martha Brewart that,” The more she talked the more expensive it sounded. She must have noticed that my eyes were glazing over so she lobbed in that “she would actually SAVE US MONEY,” I woke from my slumber “come again,” I said. “Let me explain.” She said. “When you hire an interior designer you are hiring someone who has access to information that ordinary people do not. We get you 20 percent off of almost everything, haggle on your behalf with the builder to extract a better price, and in general make the process smooth (as smooth as new construction in the middle of a recession can be), and the best part is that you are less likely to make a mistake because we know what you like – even more than you do. . .”
Always the skeptic, I asked “how she got 20% off” and “how she was able to haggle with the builder to extract a better price?” The bottom line was this – in business, companies will pay for referrals – most home supply companies give professional discounts as standard operating procedure for those in the know. Additionally, most builders in a recession are faced with two competing forces, the force of reducing prices to make a sale, and the other force of trying to make up for it by cutting corners, keeping “allowances” below market, and in general trying to make a few bucks here and there at the buyer’s expense. When you stack up all of the ‘few bucks here and there,’ it becomes meaningful. A good designer makes sure that what’s fair is fair.”
“And you’re telling me this why???” OK, I’ve kept you in suspense long enough. A good financial planner is like a good interior designer, helping you avoid “silly” mistakes – paying too much in fees to questionable mutual funds, avoiding the “Hail Mary, too good to be true investment” and digressing from a financial plan that makes sense.
Financial planning is important for most people, whether you are one of modest income or have more money than you know what to do with – a good financial planner will help you maximize what’ you’ve got. The trick is finding the right planner – the subject for our next article. . .
All the Best