Do You Need A Financial Sherpa?

Bill Parrott |

Sherpas are well-known for guiding climbers to the summit of Mt. Everest. The Sherpas are a Tibetan ethnic group whose name is now synonymous with climbing. The most famous Sherpa is Tenzing Norgay, who helped Sir Edmund Hillary summit Mt. Everest on May 29, 1953.

Sherpas are invaluable to Western climbers. In addition to guiding, they build camps and carry packs and gear, allowing climbers to reach the peak safely and, more importantly, return to base camp. Their experience is vital for navigating risks when climbing, especially at heights of 8,000 meters or more. Most climbers attempting to summit these peaks are fit and qualified, but climbing these routes would be nearly impossible without a Sherpa.

Navigating the investing landscape is challenging, though not life-threatening; some risks must be tamed and conquered. It is possible to manage your money, but hiring a Certified Financial Planner® to guide you toward your goals is much easier.

In addition to investing, a planner can help you with the following topics.

  • Retirement planning. You may want to retire at some point, so knowing how much money you'll need is essential. Taking advantage of your employer's work plan or opening a retirement account for your business is paramount. You can also fund IRA accounts and annuities.
  • Insurance planning. You are your most valuable asset, so protecting your income and life is vital to your family's success. Disability insurance ensures your household can flourish if you can't work, and life insurance benefits your family after you're gone. Other areas to insure include your business, home, car, valuables, and pets.
  • Estate planning. Do you have a family will or trust? A properly structured estate plan ensures your assets seamlessly transfer to the next generation. An estate plan also includes healthcare directives in case you're incapacitated, allowing a loved one to make medical decisions on your behalf. An estate plan can identify guardians to raise your young children if you have a family.
  • Tax planning. Pay the IRS what you owe, but not a penny more. Taxes are a part of life, but minimizing them (legally) is a crucial benefit to planning.
  • Cash management. Rising interest rates create wonderful opportunities for cash management beyond your local bank. US Treasuries, municipal, and corporate bonds can generate significant income, much more than your savings account.
  • Debt management. Carrying a substantial debt load is a weight you don't need, especially if you are trying to build a mountain of wealth. Reducing or eliminating debt can free up your resources to benefit you and your family.
  • Budgeting. Knowing where your money is going is necessary; a budget can help you spend confidently and adequately allocate your hard-working dollars.
  • Philanthropic planning. If you reached your financial summit, consider assisting others in achieving their goals. A giving strategy can help others and provide substantial benefits to your family.

Climbing requires planning and patience, as does an investment portfolio and financial plan. It's unwise to climb Mt. Everest spontaneously or anchor yourself to a weak financial foundation, and a financial Sherpa can be your belay as you attempt to reach your goals and dreams.

Happy Climbing

To travel, to experience, and learn: that is to live. ~ Tenzing Norgay

April 14, 2023

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on your asset level.

Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor. Prices and yields are for today only and are subject to change without notice.


Photo Credit: Suraj Pokhrel