I’ve been thinking a lot lately about the line between managing our own money and handing over the reins to a professional.
After a recent and incredibly insightful conversation with financial planner Dana Anspach, I decided to sit down and record a solo “10 Things” episode of the Earn and Invest podcast to tackle this exact dilemma.
In the personal finance community, there is a loud, persistent narrative that you should always manage your own money to save on fees. But the truth is much more nuanced than that. The skills required to build wealth are fundamentally different from the skills required to safely spend it down.
To help make sense of it all, I split this new episode into two distinct halves: five insights for the accumulation phase, and five insights for the de-accumulation phase.
Here is a quick look at what I cover.
During your younger, wealth-building years, managing your own financial plan is actually fairly straightforward. In the episode, I explain why DIYing is so manageable early on:
It is easier during accumulation. When you are building wealth, your main goal is simply to heavily allocate your savings into broad-based equity index funds. It is actually quite difficult to make a catastrophic mistake here.
Emotions trump knowledge. The hardest part of this phase isn’t the math; it’s managing your own psychology. If you find yourself panic-selling when the market drops, hiring an advisor is a wise choice, not a failure.
Just keep buying. To borrow a phrase from financial writer Nick Maggiulli, continuously buying equities over decades is highly likely to result in long-term success.
Market beta is good enough. Chasing market-beating returns (”alpha”) through active stock-picking is incredibly difficult. Accepting standard market returns (”beta”) through index funds makes DIY investing highly manageable.
Bonds and cash are less important. When you have a reliable job (your “sweat equity”), you don’t need to drag down your long-term returns by holding excessive cash. You want equities to do the heavy compounding.
Once you retire and stop earning a regular income, the financial landscape changes drastically. This is where safely DIYing becomes significantly harder:
De-accumulation is a different ballgame. Transitioning to spending down your wealth is highly complex. Mistakes with taxes, health insurance credits, or Medicare premiums (IRMAA) can cost you dearly.
Returns become less important. In retirement, your focus shifts from maximizing growth to risk mitigation. The goal is no longer pure financial efficiency; it’s preserving enough wealth to decrease your anxiety and let you sleep at night.
There are more decisions to make. How do you draw down taxable accounts vs. Traditional IRAs vs. Roths? How do you manage conversions and the Net Investment Income Tax? The sheer volume of decisions multiplies.
Cognitive slowing happens. As we age into our 70s and 80s, our decision-making abilities naturally decline. This makes retirees vulnerable to missing critical payments or falling for scams. Having a trusted professional or family member in place before this happens is vital.
You should think less about money. The ultimate goal of retirement is to focus on purpose, identity, and connection. If DIY administration causes you stress, paying for professional help to take that burden off your shoulders is a priceless investment.
Are you struggling with the transition from building wealth to spending it? Do you wonder if you should finally hire an advisor to look over your drawdown strategy?
Tune in to the full episode to hear me unpack each of these ten concepts in much greater detail, and learn how to build a financial plan that supports your life—rather than a life that revolves around your finances.
Join the Conversation I would love to hear your thoughts on DIY planning versus hiring an advisor. Send me an email and let me know how you are handling your own accumulation or de-accumulation phases.
Also, a quick reminder about our schedule here at The Purpose Code Substack: you can expect companion articles and show notes every Monday and Thursday, with traditional blog posts and community polls going live every Wednesday.
Thank you for being part of this community!
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