When it comes to personal finance, one of the most common—and frustrating—answers you’ll hear is, “It depends.” Whether you’re asking about the best way to invest, how much you should save for retirement, or how to minimize your tax burden, the response is often the same. And while “It depends” might seem like a cop-out, it’s actually the most honest and accurate answer anyone can give.

Financial Advice Isn’t One-Size-Fits-All

The reason “It depends” is the answer is simple: your financial situation is unique. General guidelines can be helpful, but true financial advice needs to be tailored to the individual. What works for one person may not work for another, and the right financial strategy for you depends on a variety of factors—including your age, income, lifestyle, risk tolerance, family situation, and future goals.

For example:

  • “How much should I save for retirement?”
    It depends on when you plan to retire, how much income you’ll need, what kind of lifestyle you envision, and what other sources of income (like Social Security) you’ll have. For one person, contributing 15% of their salary might be enough. For another, it may fall short.
  • “Should I buy or lease a car?”
    It depends on how often you drive, how long you plan to keep the car, your financial priorities, and even the terms of the deal. For some, leasing might make sense if they like driving a new car every few years. For others, buying and driving the car for 10 years could be the better choice.
  • “How should I invest my money?”
    It depends on your risk tolerance, time horizon, and financial goals. A portfolio that’s perfect for someone in their 30s, focused on long-term growth, could be too risky for someone in their 60s, who’s prioritizing income and capital preservation.

Why Googling Your Financial Questions Can Be Misleading

In today’s digital age, it’s easy to turn to Google for quick answers. A simple search can give you information on almost anything—investment strategies, tax tips, savings guidelines. But here’s the problem: Google doesn’t know your specific situation. While it can provide general information, it doesn’t consider your unique financial picture.

For example, you can Google “How much should I have saved for retirement by 40?” and you’ll likely find a broad recommendation—say, three times your salary. But that advice may not be right for you if you plan to retire early, live in an area with a high cost of living, or have a pension. Generic advice can be useful, but it’s no substitute for tailored guidance that takes your personal circumstances into account.

The Value of Personalized Financial Advice

We understand that hearing “It depends” can be frustrating. After all, you’re looking for a clear answer! But the truth is, giving a blanket response to a complex financial question would be disingenuous. We could tell you to save 20% of your income or invest aggressively in your 30s, but without understanding your goals, those recommendations wouldn’t be meaningful.

That’s why working with a financial advisor is so important. We take the time to understand your specific situation, your financial goals, and your concerns, so that we can provide advice that’s truly tailored to you.

In the end, “It depends” isn’t a copout—it’s an invitation to dig deeper, to ask the right questions, and to create a financial plan that fits your life.

 

This material was prepared for Bob Chitrathorn’s use.

All investing involves risk including loss of principal. No strategy assures success or protects against loss in a declining market. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Simplified Wealth Management and LPL Financial do not provide legal or tax advice. Please consult with your tax or legal advisor regarding your personal situation.