Are you informed, knowledgeable, or wise?

brainWhen you go online you can Google anything and come with a lot of information. Many people do this for medical concerns and then go to a Doctor well informed in their own mind, but not at all wise about actually properly diagnosing the problem (for example, often there is more than one issue –  how do you tell them apart … and how do you treat each one where drug interactions don’t cause side effects bad for the other … did you do any lab work, how do you adjust drugs for you personal metabolism, etc, etc). This is an example between being informed and having knowledge, or even wisdom, about the problems you have.

When I taught personal finance classes long ago, I made reference to the differences between data, information, knowledge and wisdom. Most people feel satisfied reaching the information level. However, just like with your medical life, your financial life also requires knowledge and wisdom.

DIKW-diagram

 

So … the point of my blog … you may be informed and possibly a bit knowledgeable about some financial areas. What you want to look for is someone wise (beyond knowledgeable) in those financial areas (and any other area in your life for that matter) where you are not. Especially when that wisdom looks at how one area affects another too.

The old saying “Jack of all trades, master of none” gets to the point that it takes years of experience to reach the wisdom level, and a couple hours of internet search is not going to hack it. On a personal note, I recognize I’m wise in just one or two areas and awful in the rest in life. Thus I seek out the wisdom of those knowledgeable and experienced in their specific field when needed.

This means you should have many experts in your life, or more than one in the same area depending on how complex that area may be: medical, legal, tax, financial … and in all the many other areas in your life where expert help is better than trying to do it yourself. I’ve found that experts do it right the first time, thus for less all things considered, and do a better job! This idea is best expressed by Larry Light in his article “Advisors Aren’t Needed, Right?”

Wisdom is what I strive to give you in your life for retirement planning based on the practical application of relevant research.

My prior blog on how a wise adviser may add value for you and this article on the same in Financial Planning by Allan S Roth.

Diagram source.

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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