With the scary Halloween holiday fast approaching, and black cats, scarecrows, and jack-o-lanterns scattered about most of the front lawns in our neighborhoods, it’s easy to be reminded of what an exciting and fun time of year this is, especially for kids.
But as adults, unfortunately not all of our fears, or in many cases any of them, are quite as exciting or thrilling to think about! Take financial planning, for instance:
1) The future
2) The challenge
What if I don’t understand what the advisor is talking about, or the advisor doesn’t understand me?
3) The inevitable
What if I lose money?
4) The conflict
What if my goals differ from those of my spouse or other loved ones?
5) The resolution
What it’s going to take to get my financial situation straightened out, get me on the same page with my advisor and my loved ones, and accept that it’s not always going to be a smooth road with investing and finances.
In summary, the fear, as is often the case, is of the unknown. How to conquer this overall fear? A little education in financial planning goes a long way. A few excellent financial education websites for individuals looking to gain a base knowledge in financial planning are www.investopedia.com, www.marketwatch.com, www.mymoney.gov, and www.bankrate.com. These sites offer an overall understanding and description of many every day finance terms and topics, as well as real time information on what’s going on in the market.
Once equipped with some of the key nuggets of knowledge about what financial planning is all about, the process of creating a personal financial plan will likely seem a little less intimidating. However, it can still be a rather daunting project to embark upon on your own.
Enter, a financial planner. A good advisor should help you address all 5 fears listed above, including #2, consistently checking in with you throughout the planning process to ensure that you’re both on the same page and that there is a mutual understanding your goals and objectives. Here’s how a planner would help address the other 4 fears:
The future: The advisor will have analytic tools to help assess your current financial situation, your future projected income and savings, and what potential changes need to be made to your savings and spending habits (both today and in the long run) to reach financial goals, and avoid income shortfalls
The inevitable: Every investment has some risk of losing money. Choosing the appropriate mix of investments for your particular goals and time-frame, and consistently rebalancing that mix, can reduce that considerably. Typically, investors make emotional decisions with their money, and ultimately don’t take a disciplined approach to rebalancing their portfolio. A financial advisor can help take the emotion (or fear) out of investing for an individual, help him stick to the plan, and ultimately avoid, or at least mitigate, ‘the inevitable.’
The conflict: This is a tough one. When your planning involves a spouse, or another loved one, it’s not uncommon that your goals may differ. While it’s ok to have different goals, it’s critically important to the success of any financial plan that those goals are prioritized, and that both parties agree on which goals are of highest importance to their financial plan. An advisor is most often the mediator to help family members identify their mutual objectives.
The resolution??? How are you going to know if a financial planner is capable of understanding you, your family, and your goals and objectives, and creating a personalized plan that reflects all that’s important to you? You won’t know until you bite the bullet and go see one! Plenty of advisors offer free initial consultations. Take advantage of these free meetings, interview as many as it takes to get comfortable, and make an informed decision from there. If you are looking for an advisor to help with overall financial planning rather than a very specific investment need, find an advisor that is a fiduciary. A fiduciary is obligated to put your interests first, rather that align with the objectives of his company, or sell you a specific product.
So whether it’s the Halloween season, or whatever the occasion that the need for financial planning arises, do a little homework and research first, and then take comfort in knowing that there’s nothing spooky about it.
To learn more about Betsy Vallone, view her Paladin Registry profile.
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