You'll be allowed to contribute an extra $500 to your 401(k) next year. Katie Lobosco of Money.CNN.com Shares Some Tips On What To Do.
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Let’s be honest, your money is the product of your sweat and tears … and sometimes your blood. I think it’s safe to say that you want to find a good financial in whom you have complete and total trust. But how do you do that? The process is easy, it starts with the internet and ends with an interview – yes you can do that.
Here are four ways to find a good financial advisor:
Search for financial advisors in your area
A Google search is the quickest and easiest way to find financial advisors in your city. If you want to get super specific you can even add in an area of expertise that you’re looking for such as Financial Advisor, Brooklyn, Millennials. This is the base of your search. From here you can create a short list based on their location, description and the information you find about them online.
Google will return results based on (among other things) the relevance to your search and the popularity of the website (also known as the authority a.k.a. legitimacy) as well as how up to date they are. Regularly updated websites will usually rank higher in Google. I would choose five financial advisors to start. Also, the top results with the word AD to the left, pay to be seen at the top of your search results.
Check them out on social media
From the five financial advisors you chose, narrow it down to a short list of three advisors based on their online presence. Have a look at their website and see if you get a good vibe. Take a look at their biography and see if their area of expertise aligns with your goals (such as buying a new home or saving for retirement) and ask yourself if their product offering meets your needs. Look up the financial advisors on LinkedIn and see if you like their overall presence and if the content they’re sharing is relevant to the type of services you need.
Ask about their credentials and education
Now it’s time to initiate personal contact. Send an email or give the advisors a call. This will give you an idea of what their level of customer service is like. If they get back to you within 48 hours, it’s a good sign. If your call or email goes unanswered for several days, it’s a big red flag.
Once you are in contact with the three advisors on your short list, have a phone conversation with them and ask about their designations, credentials and education. Ask if they operate with a firm, where they are licensed and which designations they have (i.e. securities dealer, life insurance and financial planner). I don’t know about you, but I wouldn’t trust just anyone with my hard-earned money. I would like to know (if I wasn’t a financial planner myself) that my money is being managed by an experienced professional.
Meet them in person – at their office
Talking with a person can give you a good idea of whether your personalities match. It also will give you an idea of how the general working relationship will be. Narrow your short list down to two advisors and book appointments to meet them in person. It’s preferable to meet them at their office to ensure the operation is legit. Be open with them and ask questions about service expectations and fees. After meeting with them, take all the information home and follow up with them in a few days. It’s never a good idea to make an on-the-spot decision when it comes to your money.
And voila, you just found yourself a good financial advisor.
Can you imagine going on an extended vacation without making any plans?
No websites or tour guides consulted. No hotel reservations made. No itinerary mapped out.
Of course not. If you wanted your vacation to be a success, you’d budget enough money to cover your costs. You’d know when you were going, how long you could stay and at least generally what you would do while there.
But when it comes to the longest vacation most people will ever take – retirement – fewer than half of all Americans have a formal plan.
And that can spell trouble.
“There’s nothing worse than being 85 years old, full of life, and being flat broke,” says Randy Becker, a retirement planner and co-founder of the Becker Retirement Group in Bellevue, Washington.
But it takes some work to avoid the many pitfalls that can ruin your golden years, Becker says. Inflation, taxes, bad health and bad investments can be devastating.
“It’s up to you to have a sound plan, so you can focus on the important aspects of a wonderful retirement life,” he says.
Becker offers these tips for getting started so you’ll know you’re ready to begin your retirement journey:
Get everybody on board.
You and your spouse need to agree on your retirement goals – and the financial decisions that will get you there. Start talking about priorities: Do you want to relocate? Stay close to the grandkids? Are you emotionally and physically ready for retirement? How long will each of you keep working, and how will that affect the income streams you’ll rely on when those paychecks stop?
Make a budget
Most people think their expenses will go down after they retire, but usually that doesn’t happen. Your wardrobe budget might go down when you aren’t working, but other expenses might go up if you travel, enjoy new hobbies, or start going out more for dinner, movies and concerts.
Know where your money will come from.
Most financial professionals agree that income is king when it comes to retirement planning. A pile of scattered paperwork and account statements is not a plan. A good advisor can help you maximize your Social Security benefits, come up with tax-efficient distribution strategy and talk to you about other options, such as annuities, that can guarantee income in retirement. This is vital as people now live 20, 30 or even 40 years after retiring.
Know your retirement timeline and reevaluate your risk tolerance.
One of the biggest mistakes investors nearing retirement make is sticking with the same advisor and portfolio they had when they were younger. You’ll need to move to a more diversified approach, with fewer risks and more protection for that all-important income.
Although he’s a financial professional, Becker says retirement is about more than money. There’s also the adjustment retirees must make from working every day to suddenly having too much time on their hands.
“Perpetual Saturdays are exciting for about a week,” Becker says. “Maybe you’ll find ways to volunteer. Maybe you’ll learn to paint or play guitar. Maybe you’ll end up working part-time. But most people discover that they need something in retirement that will keep them engaged and excited about life.”
Randy Becker is a retirement planning professional and owner of the Becker Retirement Group in Bellevue, Washington (www.beckerretirement.com). He has 30 years of experience in the insurance industry and holds a degree in personal financial planning from Metropolitan State College of Denver. Randy is co-host with his wife and business partner, Arwen Becker, on Real Retirement Radio which airs on Newstalk AM 870 on Saturdays at 8 a.m. and Sundays at 6 a.m. Real Retirement Radio is a one-hour show dedicated to all things retirement.
The saying that youth is wasted on the young may be especially true when it comes to saving for retirement. Chris Heerlein, Investment Advisor and author, shares 3 Major Financial…
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A typical high school curriculum offers anything from the traditional subjects – language arts, algebra and U.S. history – to the not-so-traditional subjects, such as gardening, therapeutic dance and business technology.
But despite all those academic options, the educational system is leaving a void in the lives of many students, says CERTIFIED FINANCIAL PLANNERTM professional Eric Hutchinson.
“One thing not being taught in schools is how to manage money and prepare for retirement,” says Hutchinson, author of the book The Financial Briefing. “A lot of students are leaving high school without knowing what they need to know.”
As a result, Hutchinson says that many students – whether they attend college or go straight into the workforce after high school – don’t grasp how important the time factor is when it comes to saving for later in life. Too many people wait too long to start stashing away money for retirement, so that their retirement fund ends up being tens or even hundreds of thousands of dollars less than it might have been.
“If you take the right actions early in life, it will make your retirement much easier,” Hutchinson says. “It’s a whole lot harder to play catch up.”
Hutchinson offers some tips for those young people entering the workforce so they aren’t left with little or nothing once their careers are complete.
Think about saving before a life event forces you to.
Hutchinson says that often a major life event will cause people to begin thinking new thoughts about their futures. The event could be a death in the family, being laid off from a job or a debilitating injury. Hutchinson says it shouldn’t take a major life event to remind people to begin to build a nest egg to ensure the financial security of their families.
Technology can’t replace the human touch.
For all the convenience that technology provides us, it still can’t replace the experience of a connection with another person. An experienced personal financial advisor can ask the right questions, provide ongoing guidance, and be an important resource for those who want to plan for retirement, Hutchinson says. A computerized robo advisor or even a live advisor supporting a robo advisor service often doesn’t deliver the same depth of advice or relationship.
Don’t abandon the ride. Let time be your ally.
Most people have been on a roller coaster. Even though the downhill plummet can be a little scary, most people don’t choose to jump off the ride, although they may think that thought! Investing in the stock market* with retirement savings can be a similar type of ride. There will be plenty of ups and downs, but the descent is no time to jump off, even if you do get jittery. Market history suggests that eventually things may work out, if you allow enough time. “Although past performance doesn’t guarantee future results, time can be an extremely valuable asset for a young person making retirement investments,” says Hutchinson. “Even with the worst of circumstances, people may be OK. As an example, 2008 was one of the worst periods for the stock market since the great depression. By the end of 2010, stocks had recovered enough to erase most of the damage done in the fall of 2008.”
“If you are trying to get rich overnight, it can be a high-risk proposition,” Hutchinson says. “Too many people are looking for instant gratification. Money and life don’t work that way.”
*Equity investing involves market risk, including possible loss of principal.
Eric Hutchinson (http://erichutchinsonfinancial.com) is a Certified Financial Planner™ with more than 30 years of experience in the areas of financial planning, investments, estate and tax planning. Hutchinson has professional affiliations with The Financial Planning Association, the Certified Financial Planner Board of Standards and the Investment Management Consultants Association. His new book The Financial Briefing, distills time-tested wisdom based on decades of professional experience and provides an overview of many of the financial and life issues everyone will face at some point.
It’s rather ironic if you think about it. When we are born until we leave home to go out on our own, it’s supposed to be our parent’s responsibility to teach us everything we need to know to be productive citizens of society. They teach us manners, right from wrong; they even give us the “sex talk,” the talk about how vital a good education is, and the importance of not drinking and driving.
Yet, there is one subject that the majority of parents tend to skip over in their lives’ lessons, and yet, it may be one of the most critical of them all…how to manage our finances. A lot of times parents bi-pass this important topic because they feel it’s a touchy subject that may open doors into their personal finances, which they may not want to share with their children. The problem with this is they are sending their children out into the world with no knowledge or skills of how the world of personal finances works. Because of this, a lot of people end up drowning in a sea of debt or, in my case, become a “financial fornicator.”
You see, when I was younger I didn’t really understand the value of my credit, how important it was, or how it would impact my life in the future. I wasn’t taught how to manage my cash flow. Money & credit management wasn’t taught in school, and it wasn’t a topic open for discussion at home.
[ctt template=”8″ link=”6luqz” via=”no” ]I vaguely remember having the #SexTalk with my parents, but I don’t recall ever having the #CreditTalk.[/ctt]Most of what I did learn about cash flow management was what I observed of my family and friends. Essentially by having minimal financial education, I learned how to be a Financial Fornicator.
[ctt template=”8″ link=”0TmBY” via=”no” ]“I learned how to be financially promiscuous by using multiple credit cards that I would use to buy stuff.”[/ctt]See … What had happen was …
I had financial one night stands by buying “stuff” with those credit cards when I should have used cash. By living this way, I ended up with Financial STD (Substantially Tremendous Debt). I had so many financial diseases that it paralyzed my financial ability to live the life I was trying to buy with credit.
I realized how significant good credit was, when my bad credit limited my access to the things I needed and when it closed doors of opportunities.
“I should have saved my money and been responsible with credit. Instead, I abused it trying to get things to make it look and feel like I was living my dream.”
It can happen to anyone …
It’s so important that people understand that anyone can become a financial fornicator. For example; I was an financial institution executive. I was the one that helped people with their money management. What I realized was that just because I knew how to successfully run a financial institution, didn’t mean I was successful with managing my own finances. I was a great steward of other people’s money as well as corporation’s fiscal soundness, but not as great at being a steward of my own fiscal stability.
“I had to shut down my ego, humble myself and admit that I needed help.”
I hated Budgets …
Then there is budgeting, I hated budgets. But, Why? Most financial fornicators will rebel if you tell them they can’t or not to spend money. I realized that my distaste for Budgets was because I was never taught how to use a budget as a tool to get what I needed and really wanted. Once I learned that a budget is a road map to my desired final financial destination, I became hooked on naming my dollars and planning my spending.
Time for Financial Rehab …
Once my credit mismanagement caught up with me and I could no longer hide from the huge amount of debt I had incurred, I knew it was time for help. In order for me to move forward and overcome my financial challenges, I had to go through a Financial Rehab. My financial rehab program was so successful that it is now a staple in my business of helping other financial fornicators.
10 Steps to Overcoming a Spending Addiction …
Being a Financial Fornicator means that you have a spending addiction. A Spending Addiction is just as real and serious as a drug or alcohol addiction.
This 10 step program has helped my clients and me. It’s a quick yet challenging process, but it works.
Step One: Admit that you have a problem and that your finances have become unmanageable.
Step Two: Identify what in your past developed your financial value system. We spend based on our value system that develops over time.
Step Three: Take ownership and responsibility for your financial situation. It’s no one else’s fault but your own. You have to be true with yourself and understand that you have to own what you’ve done or allowed to be done.
Step Four: Forgive yourself. You’ve made a mistake. It’s Ok. Forgive yourself so you can move on.
Step Five: Get help. Seek help from a financial services professional, preferably with one that has professional and/or personal experience with dealing with and resolving financial challenges.
Step Six: Get educated. Improve yourself & your situation through information. Find out how to help yourself, as a spender.
Step Seven: Plan your prosperity by creating a finical vision map. You have to be able to see what your final financial destination is going to be. Develop your Financial GPS…Goal Planning System to create action plans.
Step Eight: Take action, you can plan all you want, but you need to take action.
Step Nine: Hold yourself accountable. It’s great to have accountability partners and mentors; but at the end of the day, even if they don’t call or you’re not around them, you need to hold yourself accountable. You need to remember your final financial destination and how important it is to you, which is your why you’re doing the rehab.
Step Ten: Reward yourself responsibly. When you’ve reached a certain goal, reward yourself, but be responsible about it.
Are you a Financial Fornicator, too?
If you are not sure if you are a Financial Fornicator, I’d like to share with you a few tips to tell if you may be one.
So, here goes … you may be a financial fornicator if …
- You use multiple credit cards to buy multiple things. You may have several credit cards or charge cards and they are either maxed out or almost maxed out.
- You “have” or feel the need to spend money, whether it’s on food, alcohol, clothing, shoes or whatever. If something makes you sad, you want to buy something. If something makes you happy, you want to buy something.
- You’re not answering your creditors’ calls because you may be late on your loan payments.
Credit is Not Bad …
Just keep in mind that Credit is not bad. Credit is meant to be a tool and leverage, not a anchor or lifesaver.
[ctt template=”8″ link=”qK4bN” via=”no” ]Credit is like Sex. Just because you can, doesn’t mean you should. And if you do, use Protection – a Budget![/ctt]I’m proud that I am beating my addiction and that every day I manage to keep fighting. I encourage you to keep fighting for your financial freedom. For more tips on how to cure Financial STDs, read my book, “Financial Fornication.”
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