At The Money:  When Should Do-It-Yourself Investors Fire Themselves?  

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Barry Ritholtz** (0:32)
Are you a do-it-yourself investor whose needs have become more complex? Is the world making you concerned about your portfolio? How do you know when it's time to bring in some professional help?
To help us unpack all of this and what it might mean for your portfolio, let's bring in Dr. Jordan Grumet, a physician whose specialty is the intersection of money, mortality, purpose, and regret. He's trained and worked in both internal medicine and hospice care. His prior books include Taking Stock, A Hospice Doctor's Advice on Financial Independence and Living a Regret-Free Life and The Purpose Code. So, Doc G, let's just start very basically, what does it mean to fire yourself as a DIY investor?

**Jordan Grumet** (1:25)
Well, Barry, I grew up in the Financial Independence Retire early movement. These are the young, scrappy people who are trying to save enough so that they never have to work again. And so we were kind of cheap back in the day, right? This idea of why pay someone else to do what you can do for yourself, that was good in a sense because it made us deeply understand our investments. But as I get older, I realize that sometimes it makes sense to fire yourself. In other words, bring in the help when you need it because you can't know everything.

**Barry Ritholtz** (1:57)
So I know you've worked with other financial advisors. What has your own experience taught you about what financial advice should and should not address?

**Jordan Grumet** (2:09)
I had Roger Whitney the other day on my podcast, and he is one of the financial advisors I really respect. And we're talking about this idea of the balcony of your life. This idea that you want to stand on that balcony with your financial advisor, look out at your future and start to plan. This doesn't look like, boy, I want my net worth to be this many millions of dollars. It's more a question of how do I see the landscape of my life appearing in the future? That has to do with money, but that also has to do with family, it has to do with travel, it has to do with career. And so it's really this holistic approach. As a doctor, we used to see people, and we talked about the biopsychosocial model, the idea of not just seeing what's hurting a patient, but how they fit in their environment and their needs. And I think with the financial advisor, it's actually very similar.

**Barry Ritholtz** (2:58)
Huh, really, really interesting.
What are the tasks that a smart do-it-yourself investor can probably handle by themselves? And what areas do they tend to run into trouble?

**Jordan Grumet** (3:11)
So the truth of the matter is, when you are young and you're in the accumulation phase, it's almost hard to mess up, right? You have to do it. Nigma Julie says, just keep buying.
And so when we're young, there's lots of room for errors. So starting to understand the stock market, starting to understand index investing, writing out your investor statement or plan, basically accumulation is really something that most people can manage. Now, the caveat is that you have to be able to control your emotions, right? So anyone who's going to sell the minute the stock market drops on any given day probably needs financial advice right away. But assuming that you have the solidity of your character enough to be able to realize, okay, the market dropped, but I'm going to stay where I am and leave my money where it is. As long as you can pass that hurdle, a lot of accumulation and being young is quite possible to do it yourself.

**Barry Ritholtz** (4:06)
So how can a do-it-yourself investor recognize the difference between being reasonably capable and becoming overconfident? What are the red flags that they should be paying attention to?

**Jordan Grumet** (4:21)
Well, here's something I think we don't normally think about. When we're talking about building wealth, what we're really talking about is concentrating risk. For your average person, you're going to be concentrating risk in your career, right? You're going to be building and getting promotions and working more. You're going to be concentrating risk in your business. If you're a founder or if you have a side hustle, what you don't want to be doing unless you're a professional is concentrating risk in the stock market. So overconfident people seek alpha, right? They're saying, boy, I don't want to just take what the market has to give me beta, but I'm going to seek alpha. And that's exceedingly hard. So some of the signs are you're zooming in and out of positions.