Often, people say they’re not ready to hire a financial advisor yet because they haven’t reached a certain level of income. It’s a myth that only wealthy people need the guidance of a financial advisor.
Everyone can benefit from the expert advice, experience and knowledge financial advisors provide. Building a relationship with a financial advisor will provide you with a solid foundation for optimizing your financial situation for the rest of your life. It will also help you become a great money role model for your children.
The best time to work with a financial advisor is as early as possible!
With any aspect of financial planning — whether you are building an emergency fund, preparing to buy a home, setting aside money for your children’s education, getting insurance in place or saving for retirement — the key is to start early and focus on the long term.
It can be a good idea to seek the advice of a financial advisor as soon as you begin your first full-time job. Your advisory team can guide you in balancing your current financial needs with saving for the future. Because of the “magic” of compound interest, you can grow your money over time much more effectively than you can if you start saving later in life.
Many people are prompted to seek out a financial advisor when they face major life transitions, such as getting married, buying a home, having or adopting a child or starting a business. The personal financial plan we build specifically for you — based on your current situation and your future goals — will grow with you as your priorities change. Although each person’s situation is unique, there are some common life transitions that many people face in each decade of life.
We want to begin working with you as early as possible so we can learn what you want to accomplish. And then we will guide you as you continue to earn more money, build wealth, accumulate or pay down debt, and navigate new life stages and circumstances.
A personal financial plan is not meant to be a “set it and forget it” financial-planning tool. We will need to update it regularly, according to your family’s changing needs, market fluctuations and other factors.
In our experience, many people in their twenties and thirties are not thinking about retirement; they’re thinking about getting married, buying a first home or upgrading their home, building their careers and starting families. Younger professionals who are paying off student loans and other debts feel like they need to get on more solid ground before they begin saving for the future.
We encourage you to work with a financial advisor before, or at least as soon as, you face such decisions. There are many strategies we can recommend to you, based on your situation, that can make it easier for you to meet all your obligations, both current and future, with more confidence.
Your advisor will guide you in making informed decisions
Every major decision you make in life has an impact on your financial situation. We want to guide you in making decisions that will improve your situation and avoid negative consequences, such as creating an unintended tax burden. We don’t know what we don’t know. Your financial advisory team has undergone extensive training and obtained required certifications. Tax laws are always changing, and it can be difficult to DIY financial planning.
We have seen too many people make often-irreversible and costly all-or-nothing decisions that create new hardships. Often, when we try to solve one problem, we inadvertently create a new problem. For example, people often spend their emergency funds on “wants” instead of “needs,” and then when an emergency comes up, they are forced to borrow money or charge home or car repairs to high-interest credit cards. Many times, working with a financial advisor is a matter of protecting people from themselves! It’s important to save that cash cushion for real emergencies.
We’ve also seen many people buy items they really couldn’t afford, and then when a market downturn occurs, they put themselves at risk of having to sell those items because they need some of that money back. We can help you, again, balance your current monetary needs with your future needs — striking an appropriate balance between having cash on hand and investing any excess.
Until you have some excess to invest, we can work with you to start saving small amounts and then building up the amount you save over time. One valuable service we provide is helping you develop good money habits, such as saving some of the money you obtain through raises and bonuses at work. Too many people experience “lifestyle creep” — their standard of living rises along with their discretionary income, and before long, what they had considered to be luxuries become necessities. It happens subtly, over time and “creeps” up on them.
Start small, and follow basic steps
There’s an order to creating financial stability. The problem is that, with all the information available out there, it’s easy to get confused. What’s right for someone else might not be right for you. This is why it is so important to establish a close working relationship with a financial advisor who understands your situation and goals.
Our goal is to ask you a lot of questions to discover what your challenges, opportunities, concerns, dreams and goals are. As we go through that process of discovery together, we will learn more about your goals together.
A lot of times, people come to us in their twenties, thirties or forties, and after we learn about their situations, we give them three or four goals to accomplish to help them form a foundation for the future wealth they will accumulate. Once they complete those step, we ask them to come back and see us, and then we can proceed with the next set of steps — whether it’s building that emergency fund, making sure you have life insurance for catastrophic planning or guiding you in taking advantage of the lowest-cost, most tax-efficient investments available to you.
Consider an Advisory Account/Relationship
In our opinion, one of the mistakes many people in the financial services profession make is encouraging clients to pursue financial services and products that generate a commission for the advisors but aren’t necessarily ideal for the clients.
We prefer advisory relationships because we are legally and ethically bound to act in the interests of our clients. When acting in a fiduciary capacity in advisory accounts, advisors must prioritize the needs of our clients above our own needs. This means we are supposed to recommend investments and products based solely on your needs, not what will net us the greatest commission, referral kickback or fees. When servicing advisory accounts, we are also legally obligated to disclose any potential conflicts of interest we may have.
Often times, people just need advice and to know they’re on the right path. If you have not established a relationship with an advisory relationship, we encourage you to give us a call and meet with us. We can lead you to achieve financial confidence much more quickly and effectively than you could accomplish on your own.
