The following is my answer to a Quora question: “Is it better talking to a professional or asking family and friends when making important financial decisions?”
When you have a medical problem, you see a doctor. Do you ask your family to vote on your treatment? When you have a tax issue, you engage a tax consultant. Do you discuss this with your friends? Your family are interested parties in your personal finance. In what universe would that be a good idea? Your friends are not your family. Why would you imagine they have your interests at heart? You should also consider if they understand financial planning, investments and insurance. If they are as ignorant as you, how is their input helpful?
Consider the implications of people closest to you knowing your true wealth. Do you think your spouse would not be tempted to plot your death and take your money – especially when she finds out you were boning the neighbour or the vice versa? What happens when one child finds our that another sibling gets more from the new will? What happens when the family finds out you intend to leave all that money to the local hippopotamus shelter? What happens when your current family find out you intend to leave something for your children from a previous marriage? What about that idiot cousin who has a startup, and discovers you put your money in Apple stocks?
Never, ever, ever, ever, and I mean, ever, discuss the intimate
details of your finances with anybody in your family or social circle. That is why we have financial consultants,
relationship managers, lawyers and tax consultant. Professionals are bound by client confidentiality
laws. Your family and friends will have
conversations about your money without you around. The only time you get family involved is when
they are a direct stakeholder in the decision, such as joint ownership of
assets, or transfer of assets with possible liabilities to them.
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