There are some things that should be standard procedure. Today, let’s start with a story. I want you to imagine Paul and Mary. They’re a married couple and have a few kids. One day Paul says to Mary, “I’ve got this pain in my side. I can’t figure out what it is. It just won’t go away. It’s nagging me. So I’m going to go to the doctor and get this checked out.” So Paul goes to the doctor’s office, and sits in the waiting room a little while. His name gets called so he goes into the exam room and sits patiently. And after a short time, the doctor comes in. Now, keep in mind, to this point, he’s gone to the doctor, he’s sat in the waiting room, he’s in the exam room. He hasn’t filled out any medical history questions. There’s been no nurse to come in and check his blood pressure, check his pulse. But the doctor’s there and the doctor does a good job. He asks a lot of good questions, does a thorough exam, and says, “Okay, here’s the diagnosis. “Take this medication. “You’ll be fine, no problem.” So he goes home, does what the doctor says, and a week later winds up in the hospital. His blood pressure’s through the roof, they’re trying to get all the things under control, trying to figure out what’s going on. Turns out the medication he was given caused even higher blood pressure than he already had. Keep in mind, they didn’t check blood pressure when he went to the doctor’s office. He was just prescribed some medication that made his blood pressure even worse.
Now, how often does this happen in the medical world? Sure, there are some mistakes that are made. No doubt, we’re all human, stuff happens. But how often do you go to the doctor’s office and they don’t check your blood pressure, or check your heart rate, or ask your medical history, or if you’re allergic to certain medications? All that stuff. How often does that really happen? Oh, never? Yeah, that’s right, never. They have to check your medical history and some basic things about you, like blood pressure, pulse, temperature. These are standard procedures.
I want to bring this back to financial planning. It’s not a soft segue. There are some things that should be standard procedure. One of those is if you are working with an advisor and they are helping you with any significant questions that you have, they should always, 100% of the time, look at your tax return or they should be working closely with somebody that is, like a CPA. I have seen far too many examples, and very expensive examples, we’re talking, $10,000, $20,000 or more, where an adviser gave advice that had terrible tax implications. And that all could have been avoided. Completely avoidable errors. All it would’ve taken is a quick phone call to the CPA or a review of the tax return and maybe an hour or two of analysis, maybe. These were not super overly complex things. They were just completely missed, honestly because the adviser didn’t take the time either to learn about the tax implications or simply pick up the phone and call an accountant.
The lesson that I want to make today and make very emphatically, is that if you’re working with an adviser, great. That adviser should be looking at your tax return and your tax situation always. Or if they are not and they don’t know that information, that’s actually okay, but they must work with somebody that you are working with on your taxes, like a CPA. They should always be working closely with them so that if a question arises, they can call the CPA, email the CPA, just double check to make sure that whatever it is that you’re deciding upon is not gonna have some nasty tax implications. So that is my public service announcement for today. Again, if you’re working with an adviser, awesome. Please make sure that either they know taxes or they are working closely with the person that is helping with your taxes.