Guest Post by Steven Schoenberger

file9041284658924Photo Credit: Morguefile/Cohdra

AAt the gym, the only way you are going to get stronger is by lifting your own weights. As nice as it would be, watching a workout video without getting off the couch will not provide much benefit to the spectator. This, however, is not true when it comes to many other areas of life. In many cases it is far better to outsource than to try and do something yourself.

How then, does one decide what to outsource and what to keep in-house?

Being a father is a full time job. Often times this is on top of another full time job which pays the bills. While child care can be outsourced as easily as any other task, most dads find it fulfilling to play catch with their kids, have a meal as a family, hear about their children’s day, and maybe even change a diaper. These activities, even if infrequent, create tremendous value for both you and your children. Therefore, ‘tis far better to seek opportunities where your contribution, as a dad or otherwise, does not add value, and outsource that activity instead.

There is a concept in economics called ‘competitive advantage.’ This theory essentially asserts that a party should focus on those areas where the party can perform at a higher level than others . . . which allows the conclusion, that you should let others perform in areas where they can perform better than you. No one can be a better father to your children than you can be, so you have a competitive advantage as a dad. Thus you should strive to perform this role yourself. Everything else? Well let’s see what can be best handled by others.

You probably can’t hire someone to do your day-job – at least not in an economically feasible way. As we made clear at the start of this article, you cannot readily outsource fitness or mental health activities. I’ll assume you need at least a little sleep. And, you definitely don’t want to outsource your role of spouse or partner.

You can, however, and you really should outsource your role as your family’s financial advisor. Not only are there others out there who can do this better than you, they can do it more efficiently, at a lower cost and with a better outcome.

If you don’t believe me, try this thought exercise. Look at someone out the window, look at the person sitting next to you on the train, Google ‘random stranger’. Then, ask yourself, could this person do your day-job today as well as you do it in 10% of the time? How about 25%? 75%? Even 100%? I am sure the answer is no. (Don’t waste your energy thinking of contra-scenarios, I am just trying to make a point).

In order to do your job well, it probably requires years of experience, upwards of 40 hours/week, industry specific knowledge and maybe even additional training or advanced degrees. Even if this isn’t true of your job, it is true for anyone managing financial assets. Trying to do an effective job of taking care of your family’s financial welfare without relying on a professional is a fools errand. For many situations, you don’t even need to hire a professional, there are people out there who are able and willing to help who get compensated in different ways. (Commissions, assets under management, selling advertising, etc. I’ll cover how to sort the good advisors from the bad in a future post.)

Don’t get me wrong, you need to take an active role in making sure your family has a good financial plan. Be a proactive saver, utilize tax advantaged savings options that are available, don’t spend more than you can afford. But rely on a professional to help you make decisions about where to invest your money, how to buy insurance and in creating an estate plan, among other things.

Think of your financial world in three buckets: (1) Big Picture; (2) Financial Strategy; and (3) The Details. Only you can make decisions about the big picture. Do you want to switch jobs to try and earn more money? Should you hire a nanny or use day care? How much do you want to spend a month on discretionary items like entertainment?

Financial Strategy is not the 30,000 foot view, but it isn’t granular either. How much should you be saving? What should the asset allocation of your savings be? Do we need a will and trust? And, how much insurance should we have? All of these questions are best answered by working together with a qualified advisor who can walk through your whole financial universe and help you make educated and informed decisions.

Once you have the big picture and a financial strategy worked out, sit back and let the professionals take care of it. You certainly have to invest some time up front to find good advisors whom you like and can trust, but after that start-up period you can use the found time to do stuff with your kids, enjoy the time with your spouse, be a better dad, and maybe, even change a dirty diaper.

Lift On!




About The Author

Steven Schoenberger

Steven is a former estate planning and trust attorney turned life insurance and wealth management professional with Tamar Fink, in Minneapolis, MN. He is a husband and father of four. Steven is a CrossFitter and former swimmer.