"I will provide for you, and I'll stand by your side
You'll need a good companion now, for this part of the ride"
-Bruce Springsteen
After 30 years of helping people with their money, I discovered that financial issues were rarely about rates of return or asset allocation.
Money is about emotions. People often use money to buy something that is missing in their lives.
It could be they are missing love, self-esteem or security. Most of the time, money doesn't cure what really ails them. The ailment remains, but they wind up losing their money too.
People need help in finding out where they want to go and how to get there.
My solution is simple: Find advisers who have worked with more money than you have. If you win $100 million in the lottery, find advisers who have worked with $150 million.
Getting people to seek out advisers can be complicated.
There is a great disconnect in the financial world.
A comprehensive Financial Capability Study by the FINRA Investor Education Foundation said that 67 percent of Americans rated their own financial knowledge as "very high."
This is a primary reason that people blow through their money so quickly. They don't know what they are doing, but are convinced that they do.
By the time they figure out their lack of knowledge, they are broke.
The second thing that the FINRA study noted is that only 28 percent would "trust financial professionals and accept what they recommend." It then said that 51 percent agreed with the statement, "Financial professionals are too expensive for me."
In short, people don't trust financial professionals, don't want to pay for a financial professional and think they know what they are doing already.
The financial professionals know they are people who really need help, but they often do a poor job in marketing their services.
People need help. From somebody.
Going back to the FINRA study, it said that 20 percent of the population spends more than their income. Sixty-two percent did not compare features when getting a credit card.
Fifty-eight percent of non-retirees have not tried to calculate how much they will need for retirement. Forty-five percent of retirees didn't try to figure out how much they would need before retiring.
The dueling statistics remind of the Steve Goodman song "Banana Republic," which was a hit for Jimmy Buffett. A line in the song says, "You know that you cannot trust them, 'cause they know they can't trust you."
I found a great mechanic by asking people who loved cars which mechanic they used. The referral method works in any kind of situation.
The best way to find a financial adviser is to ask someone with lots of money to recommend one.
I tell lottery winners that they should consult with an attorney before doing anything else. That is good advice for most people. Lawyers can set the foundation for good financial and estate planning.
As much as people disconnect with financial professionals, it is even worse with attorneys.
Every year since 1991, the Gallup Organization has polled Americans on which profession they consider the most honest and ethical. Lawyers always run near the bottom, ahead of lobbyists, car salespeople and members of Congress, but behind reporters, bankers and auto mechanics.
Lawyers can help you with business disputes and tax questions. They can make sure your business and real estate purchases are set up correctly. Lawyers can help you plan what happens to you or your family if you should suddenly die or become disabled. And, even more importantly, they can make sure those plans are carried out. Lawyers can help if you are in an accident.
I've watched people make serious life decisions without using lawyers. That usually doesn't work well. I've seen people pay large chunks in taxes because they didn't ask a lawyer about a transaction. I've seen property disputes arise, simply because people didn't use attorneys to draw up proper deeds, leases and agreements.
I've seen people get burned because they drew up business agreements without an attorney to help them. I've watched extremely wealthy people lose everything because they co-signed or guaranteed loans and didn't ask an attorney to guide them through the pitfalls.
Arkansas football coach John L. Smith recently filed bankruptcy because of his involvement in real estate deals gone bad. I suspect that he did not understand how an attorney could have minimized his risk.
Most of us need someone to double check decisions and keep us from making serious mistakes. That is the thing that lawyers do well.
People need advisers who understand their situation. Finding one that has worked with more money than what you have is a good place to start.
Don McNay, CLU, ChFC, MSFS, CSSC is a bestselling author and expert on what to do when you win the lottery. His latest book, Life Lessons Learned From the Lottery, will be available on Kindle on November 10.