As I write this blog post, there’s a lot going on at the national level about the integrity of our legal system. While I’m watching the drama unfold, I’m remembering why I became an attorney and how that career path prepared me for teaching people about money management.
First, let me be clear when I say that I am not a financial advisor. I don’t tell people how to invest or allocate assets. I don’t advise people about stocks. I don’t do anything you need a license to do. I stick to what I know best and that is day to day money management. Things like budgets, debt management and generally getting your financial house in order. My philosophy is, you can’t invest and build wealth without having disposable income in your budget. That’s where I come in.
I think it would be a great thing to talk a little about different financial professionals and what they can do to help you no matter what your financial situation is. Let’s start by talking about financial professionals who advise people that are dealing with debt or haven’t started building wealth yet.
For More In Depth Information
If you want to more personal finance tips and strategies, including 5 Student Loan Debt Payment Tips, enter your information and click on "Learn More!"
Check your email for FREE gift details!
If you have debt issues and you don’t want to (or can’t), file for bankruptcy, you may want to start with a counselor or money coach. Counselors are a broadly defined category, they typically only help you with your immediate financial issues, like creating budgets and tackling your debt. If they are accredited, it’s usually through the AFCPE (Association for Financial Counseling and Planning Education). If you have a lot of debt, consider contacting a credit counselor through the National Foundation for Credit Counseling at nfcc.org. They’ll help you find a credit counselor near you who can help you begin to get your finances under control.
The main difference between counselors and coaches is that coaches help you address your financial behaviors and negative habits. This, in my opinion, is a very important part of keeping your finances under control. You need to know your beliefs, patterns and triggers when it comes to money. If you know those things, you can begin to adjust your behavior and start building lasting wealth. Coaches are typically educated through non-accredited companies and their certifications are issued by the companies.
Once you have a little disposable income, it’s time to think about how to invest it so you can harness the power of compound interest. Before we talk about the next level of financial professionals you need to be aware that it’s up to you to pick a good person to help you figure out how to manage your money. This boils down to how much money you get to keep and how much of your money your financial professional gets to keep. While I can’t give you a comprehensive list of things to do to pick a good financial professional, I can tell you a few things that will point you in the right direction.
First, ask your financial professional how she/he gets paid and how much. Second, ask if anyone else is making money off of the investment products you are buying. Third, ask your financial professional what their standard of care is. Is it a fiduciary standard or just a suitability standard? If they are a fiduciary, that means they are required to put your financial interests in front of their own. Finally, don’t be afraid to get a second opinion if the answers to your questions are not satisfactory.
There are generally two types of professionals that are in this category, financial planners and financial advisors. They could overlap in a lot of ways but there are fundamental differences, too. Financial planners can be anyone really, and they can come from a lot of different backgrounds. They can be accountants, sell insurance and they may be investment brokers.
Financial advisors are investment brokers and advisors. They must have a license and maintain it. They are regulated by the Securities Exchange Commission, the Financial Industry Regulatory Authority, Inc., and the North American Securities Administrators Association. Now, these are the folks you go to when you want help figuring out how to allocate your assets, meaning what percentage of stocks and bonds you have in your portfolio to minimize risk.
My suggestion is to look for an independent registered investment advisor (RIA), to help you get the best value for your investment management dollar. When it comes to investing, keep a close eye on the management fees you are being charged in order to get the best return on your investment. To find an RIA, you can check out the National Association of Personal Financial Advisors website, then ask as many questions as you can!
It boils down to this, in order to harness the power of compound interest, you need to save money in an investment account. My goal with this post was to talk about two things that will help you achieve that goal. First, the different financial professionals who are out there and what they do. Second, how to find one that will help you maximize your savings. At the end of the day, there is no substitute for doing your own research to determine how good your financial professional is. Just because someone has all the right boxes checked doesn’t mean they are a quality financial professional (Bernie Madoff, I’m just saying). Like anything else, do your research and trust your instincts. If it doesn’t feel right, move on to something else!
Now go out there and start building your nest egg!
P.S. Make sure you check out my online courses, books and resources, too! Investing in your money management education is an investment in yourself. That’s the best investment you’ll ever make, I guarantee it! Don’t forget my weekly Facebook live videos on Facebook.com/newcashview, Instagram @joyalfordbrand and on my YouTube channel NCVTV. You can catch me twice, on Mondays between 3:00 p.m. and 4:00 p.m. for my Monday Money Management Minute and Thursday evenings between 7:00 and 9:00 (Eastern Standard time), for my weekly NCVTV episode. They are packed full of useful and entertaining money management information! If you’ve missed any NCVTV episodes, you can see the latest on newcashview.com or you can check out my YouTube channel and get caught up! You can get there by clicking here. Remember, like and share the NCVTV videos on Facebook and all your social media platforms, so others can benefit from them, too!
GET INSTANT ACCESS
Download your FREE gift!
To learn 5 Student Loan Debt Payment Tips, enter your info and click on download.
Check your email for FREE gift download!