“If you want something done right, you’ve got to do it yourself.”
Not necessarily! The appeal of doing it yourself is understandable. There’s a great feeling that comes with being resourceful, learning a new skill and doing something that challenges you. However, there can be pitfalls to DIY and sometimes, there are benefits to getting an expert involved.
We tend to be proud of what we create and place greater value on things we’ve made ourselves. There’s a statistical difference between the dollar value someone places on something that they’ve built, compared to what another person would pay for it. This is for good reason known as the “Ikea effect” as it even applies to putting together flat-pack furniture.
Making DIY look easy:
With all the information we have at our fingertips, encouraged by the appeal of learning a new skill and guided by the power of Google and YouTube videos, we’re emboldened to give things a go. Whether it’s fixing that dripping tap, troubleshooting the laptop that’s playing up or even investing your hard-earned dollars, DIY has never looked so easy.
The growth in DIY:
The DIY mindset seems to be one that’s on the increase. When we think of DIY we tend to think of home improvement and fixing things around the home. This market has increased by almost 10 million dollars in the last ten years.i The statistics reveal more than half of us are taking up the tools, with 55% of homeowners deciding to take on home improvement and repair jobs, rather than seek professional help.ii
DIY can be a lot more than just picking up a hammer though, and our love of DIY also extends to our financials. The search for additional income in an inflationary environment has seen an increase in traders keen to take the reins and invest for themselves. Over the past decade there has been a steady increase in the share of retail investors, with equity trades by a retail investor nearly doubling in volume from a decade ago.iii Equally, when it comes to getting ready for retirement the number of people setting up self-managed super funds (SMSFs) continues to rise, increasing by around 9% over the past 5 years.iv
Reasons to be careful:
There’s a lot more to lose if there’s a problem with your financial situation, compared to a leaking tap, so it’s important to think seriously about what’s at stake when you manage any aspect of your own financial situation.
The bottom line is you want to be getting the best outcomes and that doesn’t always happen if you’re a novice and taking a DIY approach. For example, when it comes to investing, a number of academic studies have shown that DIY investors tend to underperform the market and that underperformance ranges between 1% to 10% per year.v
Getting an expert involved:
The trick with any form of DIY is to do your research, understand the task and what’s involved, and acknowledge when you might benefit from a helping hand. There are times when it’s OK to have a go yourself and times when it makes more sense to get professional advice and support. You can still learn and gain skills that you can apply to future situations, but in these cases, it can make more sense to maximise your efforts, while leveraging the skills of an expert.
When it comes to your financial life, whether it’s investing and growing your portfolio, protecting your wealth, or planning for your retirement – there’s is a lot to know and consider. Consulting with a licensed and reputable financial adviser can significantly add value and help you avoid potential pitfalls.
Seeking professional help doesn’t mean being passive and not engaged. The best outcomes are achieved when we actively work together in partnership to achieve your desired outcomes.
There is a world of difference between totally going it alone and maybe floundering a little, and obtaining advice and guidance to reach the best outcome. So, if you want something done right, sometimes it’s best to call in the experts! With over 180 million dollars in assets under management, Clear Sky Financial’s Investment Committee, along with our team of professional advisers and industry specialists, is here to help.
i https://www.mordorintelligence.com/industry-reports/diy-home-improvement-market/market-size
ii https://blog.idashboard.com.au/2022/05/13/understanding-the-home-improvement-and-diy-market/
iii https://public.com/documents/2023-the-retail-investor-report
iv https://www.morningstar.com.au/insights/retirement/246207/smsfs-continue-to-thrive
v https://occaminvesting.co.uk/do-diy-investors-underperform/
Information contained in this document is considered to be true and correct at time of publication. In addition, the information provided is general information only, and does not take into account any individuals’ objectives, financial situation and needs. Before acting on any information contained herein, you should consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs.
