Choosing a financial advisor can be tough work, especially if you know nothing about finance. If you are struggling with your bills, it is likely that you are desperate for anyone who will lend a helping hand. However, it can be dangerous and brainless to automatically hire someone before you even do your research.
Before hiring a financial advisor, it is vital to talk to your friends and family about their own finances. Perhaps they are in a similar situation and can refer you to their favorite financial advisor. Many of your friends may actually have an advisor’s business card, therefore allowing you to look into them without having to call them directly.
Once you find a legit financial advisor, you may want to find out about their level of education and professionalism. If they do not have an extensive education or degree, then there may be a problem. You want someone who will use their knowledge to help with your financial planning, not someone who will get you into more deep water. Therefore, it is necessary to find someone who is well educated and very experienced. Perhaps asking for their resume and the amount of jobs they have had will ease your anxiety. Many financial advisors have been employed by a number of agencies and have done countless amounts of internships. If a financial advisor simply “tells” you of their experience, it may be untrue. Nevertheless, this is not a trouble-free process. Dealing with your debt and money is a very serious matter.
Prior to handing your finances over to an advisor, you must see their rates. Many financial planners charge by the hour or have an overall amount that you can pay by the month. However, sometimes there are hidden fees and charges. It is imperative to make sure they are not charging too much, as sometimes people get caught up in more debt just for trying to get help in the first place. Most legit financial companies have reasonable fees that are low enough for people to afford.
When people are dealing with their finances, word of mouth and plaques are what draw people to specific financial advisors. We all want someone who will save us from our bottomless pit of debt, and perhaps even let us save more money than we are spending. It is a glorious idea to think that there are people out there wanting to help with financial planning. However, it is very important to be skeptical. Without the list of degrees, experience, awards, and so forth, advisors are only talking themselves up. You need to see for yourself how legit they are. Without this proof, you may end up in worse trouble than you started.
By: Natalie Aranda
Posts Tagged ‘Jobs’
Choose a Financial Advisor for Your Financial Planning
January 13th, 2010Make Your Financial Plan Smart
December 12th, 2009
You would never set off in your car not knowing where you wanted to go. You would never walk into a Travel agent with a blank look and hand over your cheque book, so why then, would anyone go through their life without a distinct plan on where they want to go?
Like any plan, your financial journey should be SMART – Specific Measurable Achievable Realistic and Time limited.
First you need to write down specifically what you want. It’s not enough to say, I want to earn lots of money. You need to get it down to pounds, schillings and pence. For example, here is part of my plan:
“By 2011 I want to be living in Clackmannanshire, Scotland, in a 4bedroom detached house with parking. The mortgage on the house will be costing me less than £500 per month. I will be making at least £500 per month from my outside business interests. I will be working as a postman, and making £15,000 per year. I will be free every day from 2pm onwards to pursue hill walking, family visits, reading and more. My partner will have transferred in her current job with her employer. In total we will have £2500 coming in every month, with our total outgoings being less than £1000″
The next part of the plan must be to decide how you are going to get there. This is your broad strategy. Once again it is necessary to be as specific as possible. “Work hard” just doesn’t cut it. In my reckoning I need to have at least £50,000 to take to Scotland with me in order to achieve my plan. This would mean releasing £50k in equity from my property portfolio (I don’t have any savings, outwith an emergency fund as I use all cash to pay down my debt). At the moment I have literally no obtainable equity due to the Credit Crunch.
You next need to adopt tactics in order to make the strategy happen. My current tactics are:
Work as many jobs as possible in order to maximise my income.
Minimise my outgoings.
Payoff all my personal debt, and then send the previous payments to pay down mortgage debt.
Enter every competition possible.
Live off partners’ wage.
Ensure current property portfolio remains tenanted.
These are all broad (as I don’t want to give away my life story) but yours should be as specific as possible.
You now need to really get to grips with the how you will feel when your targets are achieved. Once again this needs to be done in specifics. Find a place when you can be in total peace and enter “The theatre of your mind”. Imagine waking up in your new house. What does your bedroom look like? What are you having for breakfast and how does it taste? When you go out into your new back garden in the morning, how do the flowers smell? The imagination must be taken to this sort of level. Don’t worry if you can’t get it right first time – it takes practice. Just like building a muscle.
The final part of the puzzle would be take action whenever you find yourself going off course. Think of yourself as a self-guided missile. If you are veering off to the left then redirect. If you are veering off to the right then redirect. In terms of your plan, if you find that you have not brought enough money in one week then take action immediately.
There are no secrets in this world. Everything you need to make your plan a success is already in your head!
By: Ross Taylor
The Importance of a Good Financial Plan
December 1st, 2009
A good financial plan is important, not only to help in the creation of wealth, but also to help people make the most of what they have. Many people don’t take much heed to the actual planning of their finances apart from paying the bills and saving or spending what is left over. Many people depend on credit cards for their financial needs and end up with a debt they cannot manage. Financial advice and planning can avoid this stress.
When you consult a financial advisor, you will gain valuable insight into ways and means to both save money and spend what you have wisely. A good financial plan will take into consideration your long and short-term goals and aid you in becoming financially independent by building wealth, while at the same time being able to enjoy your life.
A financial advisor will need to gather all your financial details and identify your goals – and if you don’t have any, he may be able to help you think this through. He will need to be told of any financial issues such as debts before he can properly advise you. Then he can draw up a financial plan that is suited to your particular circumstances. This is called a Statement of Advice (SOA) and can be implemented by your financial advisor.
But circumstances often change as life progresses, so another part of the financial advisor’s task is to review the SOA from time to time to make sure it is still the best financial plan for you. Having a sound financial plan in place will enable you to reach your goals and give you peace of mind that your future will not be one of miserable despair as you struggle to make ends meet. Even those who are just starting out with their first jobs should consider implementing some kind of financial plan.
By: Melanie C