Posts Tagged ‘financial planners’

A Simple Solution to Saving Pennies

Posted on: May 8th, 2010 by

Financial Plan - Budgeting - Rockville, MDWhen reading about ways to cut costs, we often read about turning off the lights when we leave the room, buying in bulk, using energy saving light bulbs, or even putting tap water in our reusable water bottles instead of buying bottled water.  And then when we follow through with these tips, we feel better about ourselves.  Then we hear about clipping coupons and spending hours reading the ads to find stores with the best deals, but a lot of us don’t have the time, can’t be bothered, or even forget to use those pesky coupons at the store and we feel bad.  There are other ways, that require small changes in lifestyle that can help you save and are not as difficult though.  The biggest thing is to eat out less.  45% of the average family’s food budget is spent on meals prepared outside of the home.  Imagine how much money you can save just by eating the food you already own at home.

A lot of people go out to eat for lunch at work.  One of the main reasons is the social gathering of the meal.  Instead of going to a restaurant with your friends, suggest going to a grocery store, if there is one nearby, and having lunch outside.  Yeah, a prepared meal from a grocery store may cost you $4, but that is a lot less than you would spend at a restaurant.  If you are not near a grocery store, pack your lunch and arrange for your friends at work to do so and make it exciting by coming up with a fun place to eat and socialize.

While entirely cutting out the dining out experience isn’t for everyone, just remember that when  you do, do so in moderation.  There is no need to go to Ruth’s Chris Steakhouse and then order the most expensive dishes on the menu.  Scale it back a bit and keep in mind your budget.  We meet with financial planners about our retirement for a reason.  Spending all your extra money on eating is money you could have put into your 401(k) or paid off debt with.  Think about more important things you could be doing with that money before you go out.

Is Your Investment Manager Skilled or Lucky?

Posted on: April 22nd, 2010 by

Financial Planning - Rockville, MDWhen hiring a financial planner or investment manager, past performance is one of the most important factors to consider.  For this reason, many investment managers and financial planners maintain a composite, which is an aggregation of portfolios they manage that represents a specific investment mandate.  Composite presentations will give you insight into the past performance of an investment manager’s strategy.  With an influx in direct marketing for investment management and financial planning services it is very important that you familiarize yourself with the ins and outs of these composite presentations so you can analyze them for yourself.

Composite presentations will typically display both gross-of-fee and net-of-fee total returns.  A copy of the financial planner’s fee schedule should be requested if the composite displays gross-of-fee returns only.  You should be wary of a composite that only show net-of-fee returns because that is a sign that it may only include one large portfolio that pays little or no management fees.

Another thing to look for in the presentation is the total number of portfolios and the total assets invested.  You can use this information to figure out the composite’s average portfolio size by dividing the number of portfolios into the total composite assets.  Sporadic changes in the number of portfolios could signal that the investment manager has a high client turnover.

Looking at the investment manager’s past performance numbers is not always enough.  The true quality of the financial planner’s performance lies in the details of the composite presentation and their investment philosophy.  It is important to speak with them about how they go about investing and the types of funds and annuities they tend to favor to determine if they are the best fit for your goals as a client.

What You Need to Know to Shop for a Financial Planner

Posted on: April 20th, 2010 by

Financial Planner - Rockville, MDWhen shopping for a financial planner, you need to be aware of two misconceptions people have about them.  The first misnomer is that the law requires all financial planners to be registered with a government agency.  It is very important to know that this is far from the truth.  Before deciding on an adviser, always look up the person’s registration at your local state or provincial Business Services Division.  Check to see if there are any complaints or if disciplinary action has been taken against them.  You should also find out how long that person has been in the profession.  A good rule of thumb is to only go with a financial adviser that has been in the business for a minimum of 3-5 years.

The second misconception is that the letters following a person’s name don’t mean much.  This is, again, very much untrue.  When you are looking for an adviser, give extra credit to those who have designations such as Certified Financial Planner (CFP).  To become a CFP, a planner must put in hundreds of hours of studying to pass a grueling 10 hour exam.  Furthermore, members are required to undergo background checks, agree to a code of ethics, and complete continuing education to remain certified.  While hiring a CFP is not a slam dunk for your situation, at least you know that they are legitimate professionals.  Just remember that you need to choose the financial planner that best suits your needs and has passed all of your checks.

Myths about Financial Planners

Posted on: April 20th, 2010 by

Financial Planner - Rockville, MDSome people have the time, ability, and the drive to manage all their finances, whereas others don’t.  If you’re anything like me, you fall into the latter category.  Either way though, financial advisers can provide great insight and often not at exorbitant costs.   There are many myths out there that prevent too many people from seeking the assistance of financial planners though.  One of the biggest misconceptions is that they will only give you advice on investing.  Picking the right investments is certainly an important aspect of your personal finances, but its not the only part.  Financial planning takes into account all the varied aspects of a person’s life, including taxes, insurance, retirement, budgeting, etc.  With the aid of a financial planner who considers your individual situation, you’ll be able to minimize the amount of taxes you pay and have a strong bottom line in the end.

Some people truly believe that only wealthy people need a financial planner.  Financial planning is about helping people of all income levels achieve short-term and long-term financial goals.  If you are confident enough to make all of these decisions on your own and keep up to date with all the laws relating to investment income and taxation, then more power to you.  But if you have a busy life and need the assistance of a financial adviser, make sure you do your homework before choosing one.  You should verify certifications and look into their background to make sure you are getting a reliable adviser.