Struggling with your electric bill? Get an energy assist from SDG&E and save. You may qualify for an 18% discount. Visit sdge.com/fera to find out more. Today I'd like to invite you to join me for a brief thought experiment and metaphor. Here's the question. If I ask you to make a list of all the different types of hammers that you can think of, how many hammers can you put on that list?

You're welcome if you're driving to take a moment and hit pause and think about this, or if you are in front of a piece of paper, I welcome you to take a moment and jot a few names down. I'll wait. Now the number of hammers that you've put on your list will vary greatly depending on your job.

And the types of hammers that you've put on your list will vary greatly depending on your occupation. My guess is if your job has nothing to do with construction or with using a hammer on a daily basis, you probably struggled to know the name of even a single kind of hammer.

And you just said, "Well, a hammer, the kind that I bang nails in the wall with." But you might not know the distinctions of that hammer and might not know what the type of hammer that you have in the drawer at home is actually called. I noticed a zero headline article a couple days ago called – here was the headline, "Home Depot Panics Over Millennials Forced to Host Tutorials on Using Tape Measures and Hammering Nails." It was interesting just to demonstrate the lack of proficiency with basic DIY and home construction tasks that many young men and women have.

Very different perhaps than past generations. So if you are one of a young person who doesn't have a job related to swinging a hammer, you probably struggled to come up with the name of the hammer you're picturing in your head. But if I gave you some time and you did this experiment, you could probably at least come up with something like a sledgehammer, right?

There's two types of hammers. Or perhaps some of the hammers that have funny names, maybe you thought of something like a ball-peen hammer or a rubber mallet. These are things that many of us have seen and many of us have used. Now if you have a job or occupation that's not basic carpentry but does involve a hammer, you might have thought of some of the types of hammers that are unique to your business.

For example, there's a lineman's hammer that's used to drive in big screws and bolts for those who are working on utility poles. Or if you were interested in jewelry, you would think of something called a chasing hammer, a very small hammer that's used to design and shape metal jewelry.

Or perhaps in welding, you would think of a welder's hammer, which is a funny-looking hammer that has a spring for a handle so that it helps to make the metal hammer more comfortable to use and also so that the heat doesn't build up. Or perhaps you thought of an electrician's hammer or a drywall hammer which has a small little axe blade on the back that's used for breaking pieces of drywall board and a smooth head on the actual head of the hammer so that you can set in drywall nails without actually breaking the paper.

And there are many, many, many varieties beyond that. Many occupations have uniquely designed hammers that are useful in that occupation. Or if your occupation is one that is very focused on the use of a hammer and it's not just peripheral, you could talk to me for quite a while about the different designs of hammers.

For example, in carpentry, you'll find hammers, you'll find a trim hammer, you'll find a framing hammer, you'll have various sizes of sledgehammers, and there are different ways that these are all adjusted. The face of a hammer in some cases is smooth, which is useful for certain types of nailing, but then oftentimes a framing hammer will have a face that is checkered, which is useful in different contexts but not appropriate for finishing.

Or the claw might be curved or straight. A straight claw is more useful for ripping function, but a curved claw is more useful for removing nails. The handles are made of different materials. You might have a handle that's made of metal, and of course there'd be different kinds. Maybe it's titanium.

Or you might have a handle that's made of wood, and a wood one is more comfortable to use, passes less vibration through, but it's not quite as durable and it doesn't give you quite the same blow that perhaps a metal handle would would give you. Or even something like a sledgehammer.

There would be, of course, different sizes of sledgehammers. You could have an 8-pound sledge or 12-pound sledge or a 20-pound sledge, and their handle length will vary and the handle construction will vary. What's my point in this discussion of hammers? Each of these hammers has the same basic function, the application of force to a concentrated area.

That's what a hammer basically does. And if we put out every single one of these kinds of hammers on a table, you would identify each of them as a hammer. But they're all in a family. Now these hammers have different applications and thus some will be used far more than others.

A heavy sledgehammer, a 14-pound sledgehammer, a 20-pound sledgehammer, is very rarely, for a carpenter, gonna be pulled out of the truck. That's really only there to drive a big heavy stake in the ground for a carpenter. Whereas a framing hammer or just a standard curved claw hammer will be on that carpenters tool belt each and every day, and he'll be using it constantly.

Financial tools and financial products are no different than hammers. They are merely tools that can be used to accomplish certain objectives. And there's a wide variety among these types of tools. Some financial tools are very closely related. For example, if something is called life insurance, you can bet that it'll pay a death benefit when somebody dies.

But the actual design of a life insurance policy, who's insured, who owns it, how many people are insured, who the beneficiaries are, the actual fundamental structure of the policy, the terms and conditions under which it pays out a death benefit, how long it lasts, whether or not it accumulates a cash value and under what terms those cash value accumulates, these are all features which are applicable in certain situations and are not applicable in others.

The key is to look at the features and compare them to the benefits that you're trying to achieve. There are some financial tools that are broadly applicable. A 20-year level term life insurance policy is, in the tool belt of a competent insurance advisor and financial planner, a broadly useful tool.

Think of it like a claw hammer. You can do a lot of good work with a claw hammer, and you can do a lot of good work with a 20-year level term life insurance policy. It's a useful tool. A well-managed, professionally run mutual fund is a useful tool. It has certain characteristics, certain features, and it's broadly useful in the tool belt of a financial advisor.

But these are not the only tools, and they're not the only tools that you need. It wouldn't be uncommon for a carpenter to have a dozen hammers. That wouldn't be uncommon. And they may use two or three of them constantly. They have their favorite wooden-handled hammer when they are pounding a lot of nails and they just need a nice curved claw for useful, just general work.

They might have a very light hammer for when their hands get tired, and then they have their big framing hammer. And those three hammers account for, say, 80% of the use. But the 16-pound sledge still needs to be in the truck. The tack hammer is useful when doing a little bit of final trim work, and the nail gun is used every day, as is the power hammer when installing flooring.

These all have their place, and that's how you should view financial products. They have their place. Financial products are not, in and of themselves, good or bad any more than a ball-peen hammer is a bad hammer. Financial products are good or bad based upon the appropriateness of their fit to a specific circumstance.

If you're closing up a rivet doing some metalworking, a lightweight ball-peen hammer is exactly what you want. But if you bring that out on demo day and try to knock out a 2x4 stud in a wall as part of a demolition project with it, you will find your work non-progressing.

For that work, you need the sledge and the framing hammer on your tool belt. So what can you, as a non-financial professional, do? Well, first of all, trust your gut. You know what a hammer looks like. You know what a life insurance policy is. And you know when you use these things.

So trust your gut. Trust the people that have given you advice. When somebody gives you advice, there's probably something to it. But also be open to talking with those who are experts in their area. Be open to talking with those who can share with you why you might choose one type of handle on your hammer versus another and why the curve of the claw makes a difference.

Don't reject something out of hand just because you're not familiar with it. But don't accept it forthwith simply because somebody has presented it to you. Ask as many good questions as you can. Get advice from as many experienced people as you can. What you'll find is there are some levels of personal preference.

You might be talking to two grizzled carpentry veterans and looking at their hammers and recognize that they have slightly different hammers that they choose to wear on their tool belt every day. One prefers one that's heavier. One prefers one that's lighter. But there's probably going to understand one another.

Just because two people would choose two different things doesn't make one right or one wrong. Sometimes there's a personal preference. On the other hand, sometimes there is a clear gap between the application and the tool. You can use a round rock to drive a nail into a piece of wood if that's all you've got.

But we invented hammers for a reason. If somebody's trying to sell you a round rock as an ideal tool for you to use every day, run. This show is part of the Radical Life Media network of podcasts and resources. Find out more at RadicalLifeMedia.com. Struggling with your electric bill?

Get an energy assist from SDG&E and safe. You may qualify for an 18% discount. Visit SDG.com/FERA to find out more.