2701: The Secret to Becoming Your Own Financial Expert by Philip Taylor of PT Money on Money Freedom

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[00:00:30] This is Optimal Finance Daily, Episode 2701,

[00:00:34] The Secret to Becoming Your Own Financial Expert by Phillip Taylor of PTMoney.com.

[00:00:40] And I'm your host and personal finance enthusiast, Diania Merriam.

[00:00:44] Welcome back to Optimal Finance Daily, where I'm here with you each and every day

[00:00:49] to read from some of the world's best blogs covering personal finance.

[00:00:53] So with that, let's get right to today's article as we optimize your life.

[00:01:01] The Secret to Becoming Your Own Financial Expert by Phillip Taylor of PTMoney.com

[00:01:08] Are you an expert? Do you rely on anyone else as an expert?

[00:01:13] I was once featured in GoBankingRate.com's 12 Days of Finance poll

[00:01:19] to find the most popular personal finance expert.

[00:01:22] I'm flattered to be listed in the poll,

[00:01:25] but it's crazy that I would even be on the same page with any of those folks.

[00:01:29] They each impact hundreds of thousands to millions of people on a daily basis.

[00:01:34] So when I was asked to explain what makes my brand of personal finance advice

[00:01:39] different from the others, my answer was easy.

[00:01:41] I don't present myself as an expert.

[00:01:44] I simply share my story with money, the good, the bad and the ugly.

[00:01:48] My goal is that readers will be able to see themselves doing what I do

[00:01:52] and become inspired to take control of their own finances,

[00:01:56] ultimately becoming the expert of their financial life.

[00:02:00] Here are my thoughts on expertise and some ways that you can be more proactive

[00:02:04] in becoming your own financial expert.

[00:02:07] No License Required

[00:02:10] You should know that it doesn't require a degree or a special license to be your own expert.

[00:02:15] The CFP, CPA and other designations, which many of the experts in the poll have

[00:02:20] are helpful but not required.

[00:02:23] I'm actually a CPA, but I can tell you from personal experience

[00:02:27] that being a CPA did nothing by itself to improve my financial life.

[00:02:32] Sure, I picked up a bit of knowledge about business structures

[00:02:35] and retirement investing tools,

[00:02:37] but I still need to reference IRS guidelines before I make any financial moves.

[00:02:41] Ironically, the one thing that a CPA designation actually allows me to exclusively do

[00:02:47] sign off on required public company audits

[00:02:50] is something that has nothing to do with personal finance and something I'll never do.

[00:02:55] More importantly, a CFP or CPA designation does nothing for you

[00:03:00] when you can't spend within your means or pay yourself first.

[00:03:04] These core concepts aren't taught in school.

[00:03:07] I graduated with a master's in professional accountancy

[00:03:10] and I had credit card debt and no savings.

[00:03:14] You have to learn the core personal finance concepts through living.

[00:03:18] It can't be completely outsourced.

[00:03:21] It's cliche at this point, but it's called personal finance for a reason.

[00:03:26] At any given time, each of us is going through our own unique life situation

[00:03:30] and each of us has a different net worth.

[00:03:33] This is why it's so important for you to become your own expert.

[00:03:37] Only you know the full extent of your financial situation.

[00:03:41] Only you can apply financial advice to your situation correctly.

[00:03:46] My advice to buy and hold target date funds doesn't apply to a widowed woman in her 60s.

[00:03:52] My advice to only own term life insurance doesn't necessarily apply to someone

[00:03:57] who has a child with special needs that may need long-term adult care.

[00:04:02] There are countless examples of financial advice that only applies if

[00:04:08] only by becoming your own expert can you appropriately decipher the financial headlines of the day.

[00:04:15] You are the expert of you.

[00:04:18] An important part of becoming your own financial guru is learning or accepting who you are.

[00:04:23] What are your natural strengths and weaknesses?

[00:04:26] Does making extra money come easy to you?

[00:04:28] Are you prone to save all of your money versus spending it frivolously?

[00:04:33] Your financial decisions should be made honestly with your strengths and weaknesses in mind.

[00:04:38] Does this mean you should never rely on information from outside sources?

[00:04:42] Certainly not. I'm glad you're here.

[00:04:44] I encourage you to check out other blogs and the sites of those other experts.

[00:04:49] Read as many personal finance books as you can get your hands on.

[00:04:53] Take all of this information, vet it, and use it as a filter with which you view your own unique situation.

[00:05:00] Expertise takes time and consistent action.

[00:05:04] The next step to becoming your own financial expert is gaining confidence in your decision-making.

[00:05:09] This can only be accomplished through a series of actions.

[00:05:13] Try something. Open up the account. Apply for that rewards card. Get that insurance quote.

[00:05:19] These actions create awareness and momentum in your financial life.

[00:05:23] Do something is not always the answer to problems, but it's certainly the answer to learning what to do when you encounter problems.

[00:05:31] In the 2007 Harvard Business Review article, The Making of an Expert, it was noted that, quote,

[00:05:38] consistently and overwhelmingly, the evidence showed that experts are always made, not born, end quote.

[00:05:46] It's going to take time and a lot of action for you to become your own financial expert,

[00:05:50] but you're the only one that can fill that role properly, so you better get with it.

[00:05:55] So what's the secret? The secret is threefold as I see it.

[00:06:00] Number one, only you know the detailed ins and outs of your financial situation.

[00:06:05] Number two, no one cares more about your money than you.

[00:06:08] And number three, all you need to do is keep learning and try new things.

[00:06:13] Here's to becoming your own personal finance expert.

[00:06:17] The best financial advice I've ever received.

[00:06:20] For the record, the best advice I ever received was making savings automatic.

[00:06:25] That's been a big one for me.

[00:06:27] I'm a disciplined guy to some degree, but in my early to mid-20s, I wasn't saving enough.

[00:06:33] For the most part, I took what was left over at the end of the year and threw it towards a traditional IRA.

[00:06:38] I guess that's better than nothing though.

[00:06:40] Still, I wasn't contributing to a 401K and I wasn't building up a decent emergency fund.

[00:06:46] The problem was that I was trying to rely too much on my discipline to spend less,

[00:06:50] then take the leftovers and dump it into savings.

[00:06:53] Sometime in my late 20s, I started catching onto the idea of automating my savings contributions

[00:06:59] by direct depositing a percentage of my check into a separate account before I had a chance to spend it.

[00:07:05] Who can I credit for kickstarting me on the road to automated savings?

[00:07:09] My dad sure did tell me a lot about paying yourself first and dollar cost averaging back in the day,

[00:07:15] two concepts that automation builds upon.

[00:07:18] David Bach's automatic millionaire also really took the concept to the next level for me, I think.

[00:07:23] Since then, my savings, both short and long-term, has really taken off.

[00:07:28] I now contribute automatically to a Roth IRA and separate savings account for my various things, like our property taxes.

[00:07:35] My goals are being met by making savings automatic.

[00:07:43] You just listened to the post titled, The Secret to Becoming Your Own Financial Expert

[00:07:48] by Philip Taylor of PTMoney.com and I'll be right back with my commentary.

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[00:09:45] Truth be told, I've branded myself a personal finance enthusiast because I cringe when people refer to me as an expert.

[00:09:53] The way I see it, I figured out my own personal finances, but I don't see myself as an expert when it comes to anyone else's finances.

[00:10:01] Yes, there are practical things to know about money, and you should do the tactical stuff like track your spending,

[00:10:07] develop and engage with a budget, and create a financial plan or order of operations

[00:10:12] of what to do with the gap between your income and expenses.

[00:10:16] Automation, investing, getting rid of debt, etc., are all amazing tactical things we should all be doing.

[00:10:22] What you need to do with your money to build wealth is relatively simple and easy.

[00:10:27] I think the harder part is developing a sense of empowerment around your money

[00:10:31] and having a mindset shift about the role money plays in your life

[00:10:35] to start seeing it as an exciting tool rather than a source of shame or embarrassment.

[00:10:40] This requires an emotional shift that will allow all of these tactical things to feel less like deprivation.

[00:10:47] And when you can approach your personal finances with an attitude of curiosity,

[00:10:51] recognizing that all this stuff is figure-outable, even if you make mistakes along the way,

[00:10:56] it can really take the pressure off as you grow more comfortable managing your own money.

[00:11:01] But I think that does it for today.

[00:11:03] I hope you're having a great day.

[00:11:05] Thank you for being here, and I'll see you on tomorrow's episode where your optimal life awaits.

[00:11:10] Thank you.