Can Talking To A Finance Professional Really Improve Your Finances?

In today's fast-moving world, credit facilities, credit ratings, and pressures of bank lending through credit cards, brings financial know-how very high up the agenda of importance for most people.

That is why financial advisors are very useful things to have, since not all of us are equipped to deal with matters concerning finances. The reality is that our finances have to be dealt with.

Mind you, sometimes a financial advisor will be of the 'old school', and if you are an entrepreneurial type, he or she will go up the wall if you put risky schemes to them.

I know, my old financial adviser once told me my acceptance of risk was so high I was half way up the Eiger!

Three life changing events drive the majority of people to seek professional financial advice, according to a study done by the Certified Financial Planner Board of standards -

Namely:

1) Handling an inheritance (72%);

2) Facing a complex investment product (61%); and

3) Making portfolio/401(k) investment choices (52%).

Amazingly many people do actually seek professional financial advice, as they have realized how much easier it becomes to handle financial issues.

Before seeking professional help, you should ask yourself how much money you have and how complex your financial situation is.

If you find that your financial situation isn't all that complex, you might want to reconsider talking to a professional financial advisor.

You wont get advice from a financial professional for free, so you should avoid consulting one unless necessary.

However, timely and correct advice even for a fee can be worth more than its weight in gold.

Remember though - Free advice is just that - Free.

In situations that only require you to do a little bit of research on your own, you are probably better off avoiding the financial professional.

You should instead determine what you need to know, research that topic, and then make an informed decision based on your work and your financial needs.

Alternatively, if you are in a serious financial quagmire, getting professional advice might be the best thing you can do to get back on track. You will find it a liberating experience to finally understand all this financial jargon. And it could then help you to better understand and handle your finances.

As Benjamin Franklin once put it: If a man empties his purse into his head, no one can take it from him.

An investment in knowledge always pays the highest return. Article Source: ABC Article Directory

Geoff Morris has been investigating the role of Financial Advisors on the web. Visit Financial Assist to see over twenty different sources

Plan Retirement Early!

If I want to gain financial freedom way before retirement age or latest at the age of retirement, I need to accumulate enough wealth to achieve the lifestyle that I want. This requires planning as gathered from the Rich Dad's series by Robert Kiyosaki. If I want to be cautious, I feel that I should have two plans.

The first plan is to plan for retirement. The second plan is to plan to retire way before the age of retirement. This is because in case the second plan fails, I still have the first plan to fall back to. In the worst scenario, I will gain financial freedom at the retirement age.

In order to implement the first plan, I need to embark on the journey to research on retirement planning. After studying and reading a lot on retirement planning, I realize that retirement planning should be done as early as possible in my life. Why?

Firstly, I can capitalize more on the compounding interest of investment return. If I invest early in my life, then my investment has more time to grow. This advantage is gone if I have only invested near my retirement age.

For example, let assume the rate of investment return is 5 percent per annum and my retirement age is 60 years old. If I invest at the age of 30 years old, then my investment has 30 years to grow at the compounding interest rate of 5 percent per annum. If I have invested at the age of 55 years old, then my investment has only 5 years to grow at the compounding interest rate of 5 percent per annum. Of course, I will gain more if I have invested at the age of 30 years old.

Secondly, I can afford to make mistakes in my investment and recover from my mistakes. When I learn to invest initially, I will definitely make mistakes here and there. Because I start to learn to invest at a younger age, I have more time to learn and recover from my mistakes. Learning form mistakes is the key to accumulate wealth based on my understanding of the Rich Dad's series by Robert Kiyosaki.

For example, if I have made a mistake in investment that result in a loss of $10,000 at the age of 30 years old, I still can earn back the money. But if I have made the same mistake at the age of 60 years, I may not be employable to earn back the lost amount.

Even if I decide to hire a financial planner to help me, it is still my responsibility to know enough about investment so that I do not hire the wrong guy. This knowledge cannot be gained through purely reading. Some kind of practical experience is required to understand more about investments to enable one to decide on the proposed solution given by the financial planner.

Thirdly, I can be more aggressive in my investment. That is I can put my money into more risky investments. More risks usually mean better return on investment. But that may not be always true. If I can manage the risks well, I can get better return on risky investment.

For example, I can invest in currency. That is provided that I know how to manage the high risks in currency investment. Even if I have all the necessary risk management in place, there is still a possibility that the investment still goes wrong due to unforeseen circumstances. In which case, I have time to recover from the loss.

Then, I can invest in long-term investments. This is not possible if I invest near retirement age. At near retirement age, I should only be investing in assets that give me cash or near cash, as I will need the money to support my retirement lifestyle. In fact, most of my investments should be converted to the type that can give me regular income near my retirement age.

For example, it maybe impractical for me to invest in a property and hoping that it will appreciate. A property may take quite a number of years to appreciate to a substantial amount. In other words, I should not be looking for investments that give capital appreciation. I should be focusing on investments that give me regular income such as annuity.

Even though that it is good to plan for retirement early, it is important that I have addressed the more urgent needs first. I should have already planned and insured properly so that I will not face a financial disaster due any unexpected accidents or illness or any other events. Also, I should have already set aside an emergency fund equivalent to 3 to 6 months of monthly expenditure. In this way, I should be able to survive till my retirement age to see the fruits of my retirement plan.

* DISCLAIMER *
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.

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Source: ABC Article Directory Max Ng helps people who desire success to learn from his mistakes and realizations by sharing his personal struggle for success at www.richdadsecrets4me.com. He is the author of "Your Greatest Gift! Why Waste It?" at www.yourgreatestgift.com

Financial Planners - Good Ones Earn Their Pay

Financial planners are more than just stock brokers - they are trained professionals who have a fiduciary duty to put their client's interests ahead of their own.

Unfortunately, a minority of financial planners have given the whole profession a bad name, mostly by recommending investment products based more on the commission that the planner receives than their appropriateness for individual clients.

The ease with which one can trade online and the abundance of free investment information available on the internet have caused some people to feel that they don't need financial planners, but while hiring a financial planner may not be the right move for every investor, a good financial planner can be worth far more than you ever pay him or her.

The key is finding the right financial planner.

What is a Financial Planner?

Typically, a financial planner (also sometimes known as a "financial advisor") is someone who is licensed to sell stocks and other securities (bonds, mutual funds, etc.), as well as insurance products. Some financial planners may even be able to give tax or legal advice.

One major distinction among financial planners is how they're paid. There are fee-based financial planners and commission-based financial planners. For high-net worth investors, fee-based planners are probably the best fit.

This is because you'll never have to worry about your planner steering you into an investment solely to line his pockets with a fat commission check - he is paid to give you advice, not based on what you actually buy or sell.

If your financial planner's advice doesn't pan out over the long run, you're unlikely to stay with him.

This doesn't mean that commission-based planners are all bad. Few financial planners are able to build a fee-based clientele directly out of college - they have to earn their stripes, as it is said.

The best commission-based planners usually graduate to fee-based advisory, but in doing so, they may be pressured by management to leave their lower net-worth clients behind. Truly professional financial planners will always do whatever they can to accommodate the needs of their existing clients, even if their assets are modest.

After all, financial planners, like doctors and lawyers, have a duty to those whom they serve, not to their employers. When you are the client of a financial planner, you are his or her real boss.

Evaluating Client Needs - The Foundation of Financial Planning

Perhaps the greatest benefit of hiring a professional planner is that he or she has experience evaluating the needs of various types of investors. It's sometimes hard for us to sit back and evaluate ourselves - and, of course, we may not know all of the investment products and tax strategies that a trained financial professional works with on a daily basis.

Financial planners can take a look at their clients' financial well-being, goals, and risk tolerance, in order to develop a truly comprehensive financial plan, that goes well beyond "buy, sell, or hold."

For starters, your financial planner may recommend a given asset allocation. Financial advisors tend to recommend that younger people have a greater percentage of their portfolios in equities (stocks), whereas older folks concentrate more on fixed-income securities (bonds).

The logic behind this is that young people can afford to take more risks - over the long term, the stock market generally outperforms the bond market. But for older people, what if the stock market crashes the day before they're set to retire?

They don't have the time for the market to "correct itself" that younger people do, so this is why financial planners generally recommend that people begin slowly moving out of stocks and into bonds as they age.

But this is just a simplified case. Perhaps your needs are a little out of the ordinary. Perhaps you haven't saved enough for retirement. A good planner will recognize this and recommend that you're aggressive with your investments, even in older age.

Maybe you're young, but you have an incredibly weak stomach. You like to play it by the book, and everything you read says you should be heavily in stocks, but a good financial planner will steer you toward big cap blue chips with a healthy dose of fixed-income, and your stomach will thank him for it.

The key is that experienced financial planners have seen other clients in similar situations, and yet they are able to zero in on your unique needs. This type of financial professional is worth every penny that you pay him, because he measures his success by your success.

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