Life After Full-time Work Blog

Learn about preparing for life after full-time work through posts from Don's upcoming book.

#2: You Don’t Need to Become an Expert

Really!  Here’s why you don’t ever need to be an expert on any aspect of this.

This is really important, so I’m going to explain it fully.  I hope it’ll make you realize that everything you need is within your control.  You may just want to skim through it, initially.  When you’re dealing with, or about to deal with, an expert, that’s when the details become more relevant to you.

My goal is not to make you an expert, on investment or happiness or anything else.  That would take far too long, and isn’t necessary.  There are experts everywhere.  You can be a consumer of their expertise.  But I want you to be an informed consumer, so you can use their expertise to best effect.  If you want advice, go to an expert and explain your situation and your goals.  What I’ll give you is education, so you can communicate better with experts and assess the advice they give you.

Specifically, here’s how I hope you’ll feel at the end of my teaching: “Now I know how to think about issues connected with this phase of life.  I have more knowledge than before, it’s knowledge that’s relevant, and it has helped to shape my opinions and attitudes.  I understand the issues.  I know what questions to ask, and so I’m more likely to get useful answers.  I realize that it’s not really as complicated as it’s made out to be.  And because of all of that, I’m in control.  I’m setting my own path to a happy, comfortable time of life.”


OK, now let me explain what I mean about being an informed consumer of expertise, and why you don’t need to be an expert.

In your life, you deal with doctors, you deal with lawyers, you deal with all sorts of experts.  And yet you’re probably not an expert in any of those fields, and you still cope.  The reason is that you don’t have to be a doctor to interact with doctors, you don’t have to be a lawyer to interact with lawyers, in a useful way.

What you do need is enough information to work with them, to know how to help them to help you.  They provide the expertise.  You’re a consumer, a consumer of their expertise.  And you ought to be an informed consumer of their expertise.

To get you to that point, I hope to show you two kinds of things.

Here’s the first.  It’s to give you a framework to put things in.  You know how you see pieces of a jigsaw puzzle, and you wonder how they fit together?  It helps a lot if you have the cover of the box that the puzzle comes in, with a picture to show you what the whole thing looks like when it’s complete.  If you have that picture, it becomes easier to see where any one piece of the puzzle fits.  I want to give you that sort of big picture about post-work life.  So: the principles that underlie the subject, how they fit together, that sort of thing.

Here’s the second thing.  What does it mean, exactly, to be an informed consumer of expertise?  What does it help you to do, when an expert tells you something, or gives you advice or makes a recommendation for you to follow?

It helps you to do three things.  It helps you to assess the expertise, it helps you to challenge the recommendation, and it helps you to apply the principles to your own situation.  Again, let me explain what each of those phrases means.


(1) Assess the expertise.  How do you assess what an expert tells you?  To assess means to judge, to evaluate.  Well, to do that, you need to understand what are the main messages that the expert is giving you.  So, if you don’t understand the main conclusions of the expert, say so, and make sure they get explained to you in a way you do understand.  For example, every stage in the tour that I write about in my book that has an explicit destination, a point that you need to understand.  Anything an expert tells you should also have a point, one that you understand.

(2) How do you challenge an expert?  Well, this is where being informed is important.  You need to understand the principles that are behind the recommendation.  (And that’s the point I hope to get you to.)  So, when you see recommendations, make sure you understand the principles on which they’re based.  Make sure you get the expert to identify those principles.

Also make sure you’re told about any research that underlies the recommendations.  Where does the research come from?  Where’s the evidence?  Is it based on stuff that’s happened in the past?  And if so, is the same sort of thing likely to happen in the future?

This is one of the important principles you’ll come across in investing.  The future may not look like the past.  The reason is that investing isn’t like the physical world.  If you throw a stone upward, it’ll rise, then at some point it’ll start to fall.  That will always happen.  It’s because of gravity.  Gravity pulls physical objects back to the earth.  It did it yesterday, it does it today, it’ll still do it tomorrow.

Investing isn’t like that.  Investing involves putting a price on assets and buying and selling, and those prices are based on people interacting with one another.  You know how it is with people.  There’s no guarantee that they’ll always act the same way.  They’re allowed to change their minds, in a way that gravity can’t.  And so, particularly as new information becomes available, prices change all the time.  Investors are trying to anticipate what tomorrow’s price is going to be.  No one ever gets it right all the time.  Getting most of it right in the past, isn’t a guarantee of getting most of it right in the future.

For now, it’s enough to note that one way in which you can challenge an expert, is to ask what assumptions about the future the expert is making, what other ways are there in which the future can evolve (in other words, what could go wrong), how would the recommendations work out if the future doesn’t evolve in the way the expert has assumed?  You need to be able to make that sort of challenge, in order to evaluate, to assess, whether you’re comfortable with the advice you’re getting.

(3) And finally, I said that you ought to be able to see how the advice actually applies to your own situation.  In fact, that’s the area in which you’re the expert.  You know your own situation better than the expert does.  To make the expert’s advice as good as it can be, you need to be able to convey the elements that define your situation to the expert.  That way, the expertise can be tailored to fit you, rather than just being off the peg.  Not that off the peg is necessarily bad – I don’t mean that at all.  But the more the expert knows about you, the better the fit.

The expert on any other subject is, in fact, an informed consumer of your own expertise about yourself.  So, explain yourself, and the expert will know how to make the advice fit you as well as possible.


How do you explain yourself?  Let me suggest two things you can do.

(A) One is to paint a picture of success.  Imagine yourself (your partner, your family, whoever) several years down the road.  What would make you feel that the outcome has been good?  There are several categories to think about, as you paint that picture of success.  They’re actually the focal point of much of the education in my book.  But if you can convey to the expert what that picture looks like, that’ll help enormously.

As human beings, we’re notorious for hoping for way more than is reasonable.  Typically, our financial ambitions far exceed our willingness to pay for them, or the amount of risk we’re willing to take.  That alone is worth discussing with the expert: to see how feasible your definition of success is.

(B) And so, of course, the other thing you can do is to paint a picture of failure.  What sort of outcome, several years down the road, would make you feel disappointed?  If you can let the expert get inside your head, it might be possible to detect early signs, in the future, that events are working out well or disappointingly.  It might be possible to design a Plan B that isn’t too difficult or expensive to move to.  All kinds of possibilities.

All of this should make you realize how much better you know yourself than the expert knows you.  I hope this realization will give you the courage to challenge the expert’s advice – something you might otherwise be afraid to do, because after all, they’re the expert, right, and what do you know?  You know yourself, that’s the answer.  And so, raise the issue with any expert whose advice doesn’t make you comfortable.


You can get all the benefit of the expertise that you need if you’re an informed consumer.


I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.

6 Responses to “#2: You Don’t Need to Become an Expert”

  1. David Hartley says:

    I really like Don’s suggestion to paint pictures of success and failure. This is likely to be meaningful for a broad range of investors. The follow up is the role that financial wherewithal plays in those pictures of success and failure; as we do know that money is not everything.

    While it is true, as Don says, that “investing involves putting a price on assets and buying and selling”, not all investors “are trying to anticipate what tomorrow’s price is going to be”. In fact asset prices are only relevant when an investor wants to buy or sell; at other times they are a potential distraction.

    I am reminded of a colleague who suggested to his father that he should reduce his exposure to shares as he got older in order to reduce “risk”. His father was deriving sufficient income from dividends to support his lifestyle and had observed these dividends increasing over time. To him, rises and falls in share prices were completely irrelevant, providing that dividends remained sufficient to support his lifestyle. Fortunately he did not sell his shares and invest in cash, as interest rates subsequently fell sharply and he would have had to draw on a diminishing pool of capital to support his lifestyle. In this particular case, the suggestion to sell shares in order to reduce “risk” actually would have increased the risk of not meeting defined objectives.

    Starting with the pictures of success and failure, investment objectives can be centered on distinct purposes with strategies designed to use both asset allocation and stock selection to meet those objectives. So, for example, for a portfolio that has a purpose of generating a sustainable long-term income, shares that pay no dividends might not be very useful as the reliance on the fickleness of market pricing is too great.

    As populations age, I expect that there will be increasing demand from investors for sustainable dividends. There may also be increasing pressure on governments to adjust taxation policies that currently discourage the payment of dividends.

    • Don Ezra says:

      Thanks, David. I’m glad you like the idea of painting pictures of success and failure. They’re helpful in identifying and communicating our goals and risk tolerance.

      You make some very important points.

      One is a reminder that prices are only relevant when we’re buying or selling. We understand this in connection with a home. We don’t let our sleep get affected by whether home prices rose or fell yesterday, yet some people really do follow other investment prices daily, and it affects them psychologically. Being aware of whether home prices are higher than usual or lower than usual can affect our planning, but that’s different from being obsessed with daily numbers. (Thank goodness they’re not available!) At some point I’ll post something on the fact that financial risk and psychological risk aren’t the same thing.

      Another point you make is that investment fluctuations shouldn’t matter if there’s enough to support the desired lifestyle. Very true. In the phase of life after full-time work, risk is really the chance of the lifestyle being affected, rather than the chance of assets going down in value. Certainly declining asset values can have an impact; but there are ways to cushion that impact, so investment risk is an indirect risk rather than a direct risk. A subject for another future posting.

      Your point on using the dividend stream to live on is one that many professionals think about. I’ve done some research on it (spoiler alert: yes, it can be a good idea as a stable base), but I’m thinking that’s a geeky topic and it’s more one for the experts than for the average reader.

  2. Richard Austin says:

    Thank you. I enjoyed the column. It starts at the right place for someone, like myself, who is does not know what questions to ask and, more importantly, who to ask them of.

    I understand the importance of challenging an expert – to ask what assumptions about the future the expert is making, what other ways there are in which the future could evolve, etc. But that, to me, is the second part. The first question, albeit a more basic one, is how to come up with a stable of candidates to ply with these questions. I have an investment advisor, a lawyer, a banker and so on. I am not sure though who I need to help me with this next phase. Is it a financial planner? Or does it not matter what the person calls themselves, so long as they have certain basic skills and experience?

    • Don Ezra says:

      Thanks, Richard. Yes, first you find someone before you ply them with questions. How might you find someone? Often people simply use their bank. Or you might seek references from people you trust — that’s probably the most sensible way to start, because trust means a lot. Or look at advertisements. The approach may be different in different countries, depending on how easy it is to find professionals in your field of search. You might also have different fields of search, as I think you anticipate. For example: planning your income for this phase of life, investments, taxation, insurance, estate planning, long-term care – there’s no end to the things you might seek expertise about. And you might use one professional for all your needs, or several members in the same firm or partnership, or several individuals or firms or partnerships – in which case some co-ordination will be necessary to ensure that all the relevant bases are covered and dealt with in a consistent way. There’s no one-size-fits-all approach. But to answer your final question explicitly: yes, it’s the skills (more than basic, I hope) and experience and empathy that you’re looking for, though formal qualifications implicitly add some professional body’s authorization. Hope that helps.

  3. J. J. Woolverton says:

    The real question in the investment industry is: what is an expert? How will you know one when you see one? One truism in the investment industry is that “past results are no predictor of future results”. The top fund managers, if really successful, might have a track record of around 60% (either outperforming the market or their peer group) — which is not very comforting. I don’t think any of us would hire a lawyer, doctor or accountant if we knew that they were only successful 60% of the time — and that they might be unsuccessful for a stretch of time.

    With doctors, lawyers and accountants you, typically, have been exposed to all three during your working career. You know the right questions to ask: I have a pain here; I am buying a property; and, I need my taxes done. For a financial planner (the “expert”), you, generally, don’t seek one out until late in your career — and there, generally, are no reference points along the way.

    The investment industry also hides behind terms that, sometimes, even the professionals do not understand (e,g., alpha, beta, P/E ratios, convexity, sigma, value, growth, ETFs, passive vs. active, large/mid/small/micro caps, etc.) The industry tries to confuse so it will hide the fact that a lot of so-called experts are just not very good at what they do. Which makes finding one so much more difficult.

    So, what is an “expert”? To me it is someone that will take the time to educate me to the level that I understand what might happen to my investments during various economic cycles as well as market cycles, in a language I can understand.

    Soooo, back to your point: yes, you must be “an informed consumer”. Once you answer the question: what do you want to spend your money on?, then you are ready to take on the “expert”.

    • Don Ezra says:

      Thanks very much! Words of wisdom from an industry veteran, that I’m sure readers will take to heart. Your points about educating the client about what might happen, in the client’s non-technical language, is central to the relationship. I hope you’ll find the education that I aim to provide to be pretty consistent with your views.

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