When it comes to investing in financial advice, the age-old adage “you get what you pay for” holds far more truth than you might initially think.
Renowned author of The Behavior Gap and New York Times columnist Carl Richards is known for his insightful perspectives on how behaviour and finance correlate. In his latest essay, Richards offers a compelling analogy to support the idea that investing more in a quality item upfront can actually save you money in the long term.
Drawing from his own personal experience with ski gear, a similar principle applies to financial advice – investing in high-quality, personalised financial advice will save you money in the long run compared to opting for cheaper, poor-quality or “stock standard” advice.
The Case of the Moonstone Ski Bibs
In the early 2000s, faced with a tight budget, Richards and his wife found themselves in need of new ski clothing. Rather than succumbing to the temptation of purchasing cheap knock-offs in an effort to save a buck, they chose to invest in a pair of high-end Moonstone ski bibs – costing them nearly $250 more than the cheaper counterpart. Two decades on and the pair still own their original Moonstone bibs, serving as a testament to the wisdom and quality of the initial investment.
Now let’s apply this principle to financial advice. Although choosing a more expensive, reputable advisor may initially seem like a steep investment, the long-term benefits and savings far outweigh the upfront cost. Not only that, the potential pitfalls and costly mistakes of poor quality or incorrect advice could actually see you spending even more on financial advice than if you’d invested wisely at the beginning.
The Cost of Cheap Financial Advice
It’s understandable that many individuals may not have the immediate resources to afford a premium initial investment. However, opting for cheaper, subpar alternatives may prove to be a more costly decision in the long term.
20 Years of Ski Gear
$50 Knock-off ski gear x 20 purchases over 20 years = $1000
$300 Moonstone ski gear x 1 purchase over 20 years = No brainer?
Just like those $50 knock-off ski pants that would have needed replacing year after year – the cycle of continuously replacing inadequate advice can incur extensive additional costs. It also leaves you vulnerable to potential obligations or indictments that an inexperienced advisor may not even be aware of.
Not only are you losing out on opportunities for precious returns, but you could even find yourself in the line of fire with governing financial bodies, should your advisor not have the knowledge to ensure you are meeting your obligations and making educated and legal financial decisions.
The Value of Investing in Quality
We live in a world with a constant desire for instant gratification. Where we want more, more, more and we want it now. Making smart financial decisions begins by cultivating a mindset that values saving for and investing in quality products and services.
Quality financial advice, much like the enduring Moonstone ski bibs, provides lasting value. When you choose to make a strong initial investment in a reputable financial advisor, you avoid the need for constant replacements, potential mistakes, and position yourself for significant long-term savings and financial growth.
Carl Richards’ analogy of the Moonstone ski bibs serves as a powerful reminder that a quality initial investment will always outdo a cheap spend in the long run. You’ll find the initial cost is a small price to pay for lasting financial security and peace of mind.
So, if you want to spend less in the long run, try investing in quality financial advice today. Remember, if you buy nice, you won’t need to buy twice!
Make your initial investment into advice the right one with BIS Cosgrove. Get in touch with one of our expert accountants or advisors and find out how we can help put your mind at ease. We understand more than just numbers, we understand life.
While you’re here, be sure to follow our socials so you never miss a thing! Stay up-to-date with the latest industry news, tips, and valuable insights as they become available.
The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
