Giving financial advice can be as simple as giving another individual a book, a link to a blog online, tuning in the television to a financial guru and their philosophies on money. Though, it is important to understand that personal financial advice is well worth the money of a professional who has the expertise and credentials to confidently and accurately guide individuals throughout their financial lives.
The aspects of personal financial lives about which individuals seek advice often are centered on the big expenses in life. Or, it is also centered on life stages or changes in income, such as those that happen as individuals are getting ready to tie the knot, beginning parenthood, kids being sent off to college or working adults closing the door on their office an opening the door to the endless possibilities of retirement. Giving financial advice can do much for individuals who are in these stages of life.
When giving financial advice, it all starts with analysis of the present situation. Net worth and cash flow basically paint an accurate picture of what is possible. Though, it is through the financial experts eyes that they are giving financial advice about how to make what seems impossible come into view in life. Those who are in their 30s, have kids, but no money in a 401k or Roth IRA, but want to retire at 50, may have a hard time if they do not start investing or saving some money.
A professional planning and advice expert who is tasked with giving great financial advice to that couple will have to look at the situation. Cash flow is the difference between income and expenses. If it is in positive territory; meaning there is money to save every month, then the couple may be able to meet their goal. If, though, they have more debts than assets, as in a negative net worth, then there will have to be some selling off of assets, and the like to turn the ship around into the right direction.
When considering who is giving financial advice, it is important to know how to go about choosing a professional planner who will give you advice. Look for a Certified Financial Planner. Their credentials indicate someone who has had to pass rigorous certification exams, and has additionally, taken a fiduciary oath. The fiduciary oath ensures that the professional giving advice will work in your best interest. This is often called a fee-only planner. The other option that is widely used is a sales commission professional who works for a company selling monetary products.
When they sell you products, that is when they make their money. So, they have a conflict of interest. That is why it is preferred that you choose instead a fee-only planner.
In addition to choosing the fee only planner who has taken a fiduciary oath, you may want to consider with what topics you need to most advice. If you are looking at someone who can be giving financial advice for your impending marriage, then you will want to choose a professional planner who specializes in that area. It may be that they provide full, comprehensive planning for the full lifetime. But, there may be subcategories in which they excel too. Do make sure you are giving yourself and your family a fair shake by finding the right professional for you.
It can be that they specialize in giving financial advice about insurance, estate planning, real estate planning or tax planning as well. If that is the case, then you may want to look for additional credentials to the CFP initials. One might include an estate planning attorney or a Certified Public Accountant for your tax outlook and planning. They may be giving you the best information for you money, as well.
It makes sense to pay someone who charges the best value for their services. If they are a CFP, CPA and charge $20 more than just a CFP, it will probably be well worth it. Though, check around, ask for references from your potential professional. They may have customers who are very loyal, committed, and therefore benefit a great deal from their services.
Giving financial advice can cost good money. Then, you may strongly want to consider the extra money to be an investment in yourself. Otherwise, expect the planners who are giving you a report to charge anywhere from $125 to $300 per hour. They may charge more, depending on their services that they, as an expert in their field, can offer you in your personal life. It could be the kind of information that changes your life for the best. It could be the missing link that makes all the difference in your life.
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