Like it or not, there are too many specializations in modern society to understand all of them.
For that reason, we must trust other people to render necessary services for things we need.
- An adequate service provider will probably do more business in that domain in a week or month than you’ll do in your life.
- They’re aware of more dumb details, industry standards, and what to not do than you ever could from your position.
- Per-dollar, the money you save from their advice is the best investment you can ever make.
- Even when you’re a legal/financial professional yourself, you likely don’t know the idiosyncrasies of domains that run parallel to yours.
Most of the difference between a professional and an amateur is their awareness of risks and their skill in managing or preventing them.
Understand the Basics
For any specialization, it’s vitally critical to know the gist of what those professionals are doing, for several reasons:
- If we’re not aware of that subject at all, we run the risk of a professional exploiting us.
- Even when that professional is sincere and honest, we run the risk of making a poorly-informed decision simply on the limited information that professional provides.
- Even when we make the right decisions without complete understanding of the situation, we don’t learn from it and therefore don’t grow as much.
- Over time, not learning from expert advice can make us technical idiots at worst or, ideally, experiencing limitations on finding meaning.
Generally, a 4-hour summarized class or poking around online videos/articles is all you need to get the gist of the information.
- Consider your own health, diet and exercise, self-determined goals, and money management.
- Learn the basics on investing, laws, contracts, money management, and taxes.
- Further, learn the basics of any privileges of your lifestyle: autos, home ownership, and intellectual property (if you create anything).
- You need a lot more to actually perform in most domains, but you don’t need to because you can hire a specialized professional!
When talking with them, boldly ask questions for anything you don’t quite understand.
- You’re not stupid for not understanding: they probably make it look easy because of how familiar they are with the subject.
- If that person is offended by those questions, find someone else in the field.
- Frequently, their language will reflect itself into highly specialized jargon oriented toward what they work with.
- That language is built to make their lives more convenient, but it lives in a domain of specificity that outsiders will not easily understand.
- Often, in particularly specialized fields, you may need someone who specializes in communicating with them just to know what they’re talking about!
A good professional has a unique relationship with their tools.
- Broadly speaking, a professional’s tools define their trade.
- Accountants’ tools are financial reports and tax filings.
- Programmers’ tools are software and existing computer code.
- Vehicle operators’ tools are both their vehicle and what they use to maintain their vehicle.
- They see that all tools have severe constraints, but that they all have their uses for particular circumstances.
- Even a bad-quality tool has its place, simply because it’s disposable or creates consequences a good-quality tool wouldn’t create.
- They’ll often have experience building their own custom tools for their work.
- Unfortunately, their specialization in their skill may mean they’ll overlook tools beyond their scope of work.
- The law of the instrument applies, and they’ll often think their known tools are the only way to solve a problem.
- They’ll be comparatively unaware of other domains’ tools.
- Their awareness of adjacent industries, and attitude toward them, often demarcates between extreme specialization and technical idiocy.
Assemble your own team
Consider every type of professional you will need.
- Look online at other clients’ reviews to research reputable service providers.
- If you know anyone who is particularly successful in a relevant domain, ask them for a referral.
Before talking with them, gather and organize all your paperwork beforehand.
- Unless you come in prepared, they’ll bill you to organize it for you.
- Coordinate the preparation and meeting with your spouse and any children who may need to be involved.
Walk through the same routine with each servicer:
- Agree on how you’ll work together and both your expectations.
- They’re usually bound by a confidentiality agreement where you can tell them every relevant detail without risk.
- Gather the relevant information and set one, five, ten, and thirty year goals.
- Evaluate your status and create a strategy.
- Time your monthly activities (especially December/January) to adapt for annual reporting needs (e.g., taxes).
- Understand their recommendations and possible alternatives.
- Clearly articulate what you both agreed on and put it in writing.
- Periodically follow progress with them and, if necessary, reconsider your goals and their arrangement.
- Have them review everything at least once a year.
- Ask for advice on the upcoming year to maximize investment returns, tax benefits, and minimize risk.
- Keep updating them on any significant legal or financial decisions.
Types of Professionals
Financial advisor (an IFA, or Independent Financial Advisor):
- A bad financial advisor will cost you lost investment returns, and the worst ones are con artists.
- You can do most investing yourself (since you have your own specialized industry knowledge from your career more than a fund manager can have), but retirement and succession planning requires more careful consideration.
- Research financial advisors with FINRA.
- If you ever have any uncertainties about a potential investment product, take the marketing materials to a certified IFA.
Accountant/tax preparer (CPA certified, or Certified Public Accountant):
- A lousy accountant/tax preparer will cost you thousands in missed tax benefits or a discrepant audit.
- Choose an accountant and a tax preparer in a reputable firm.
- Make sure they match the niche you need (e.g., estate taxes, small business).
- Before you go in to your tax preparer, research what you can claim, and only claim deductions/credits they know you qualify for.
- Try to prepare taxes off-season (February and March) to schedule appointments more easily and give time to get missed paperwork.
- Report all income and activities, including stock sales and gambling winnings.
- Prepay taxes to avoid incurring interest on a filing extension.
- In the USA, you can also find great tax preparers as EAs (Enrolled Agents).
Attorney (Must have passed the bar exam):
- A sloppy attorney will cost you irreparably by neglecting the legal environment for you or your business.
- Look for at least two: a general-purpose attorney for filing documents, and one for every specialization you need:
- Admiralty law (if you have maritime logistical needs)
- Animal law (if you raise livestock)
- Banking and finance law (if you’re working with large amounts of money)
- Bankruptcy law (if you have too much debt)
- Business law (if you’re an entrepreneur)
- Civil rights law (if you’re facing significant political hardship)
- Corporate law (for large-group managers)
- Criminal law (for legal issues)
- Education law (for homeschooling legal issues or if you’re a teacher)
- Entertainment law (if you’re a performer)
- Family law (for legal issues with your family)
- Environmental and natural resource law (for large-group managers, especially factory production and mining)
- Health care law
- Immigration law (for citizenship issues)
- Intellectual property law specialized in patent, trademark, and copyright
- International law (for government issues)
- Military law (for military needs)
- Personal injury law (for breaches of contract)
- Real estate law (for real estate issues)
- Tax law (for accounting legal issues)
- High-profile attorneys will charge for an initial consultation, but younger attorneys that need clientele do consults for free.
- If you like your attorney but don’t need them, hire them on retainer to prevent them from defending an opponent if the situation ever arises.
Banker (Will be affiliated with a reputable bank):
- Bad bankers will file paperwork incorrectly and can incur tremendous fees and penalties for noncompliance.
- A banker will let you easily make complex banking decisions.
Realtor (licensed to access the MLS or Multiple Listing Service):
- A poor realtor isn’t typically bad, since they’ll likely still sell your home for more than you could have done yourself.
- Beyond buying or selling a house, you need a realtor to purchase business property.
Insurance agent (licensed by a state’s Insurance Commission to produce insurance):
- Even an adequate human insurance agent gives better service than online-only insurance.
- If you can, use an independent insurance agent who can compare insurance from different companies.
- Research insurance agents by looking them up on the NAIC.
- Keep your insurance information together:
- Type of insurance, company, plan ID#, coverage amounts, agent’s contact information, monthly premium
- You can typically make small fixes yourself, but large-scale auto fixes require specialized equipment that either need a mechanic’s shop or a severely involved hobby.