Finance Tips For Young Adults

Finance Tips For Young AdultsIf you recently graduated, or simply consider yourself a young adult, you should take time to develop a solid financial plan. This may not be the most important thing on your mind right now, but it really should. Even if you think you still have plenty of time to build up a retirement fund or to save up for a house – think again. The biggest benefits in growing your fortune come from the time passing by. Yes – the more time you have the more value you can get out of the money you are able to earn and invest.

You will now learn about a few very simple steps that you should take right now, a few easy decisions that you should make to significantly improve the quality of your life in the future.

Set up an emergency fund

I know that this may sound ridiculous to you at the moment, when your income hardly covers your expenses. But it’s never too early or too late to start an emergency fund. Think about it – even if you develop a perfect personal budget, you can never take everything into account. There will always be unexpected expenditures. Maybe your car will break down next month or you will need a new resource for your studies. It would be very smart to have a separate account from which you could borrow the money rather than charging it on your credit cards, wouldn’t it?

You can start right now by putting aside small amounts of money into a separate account every time you receive your salary or get a bonus. Just start immediately – don’t think about it too much.

Later, when your budget allows it, you should consider building up a bigger emergency fund – maybe equal to your 3 to 6 month salary. This is for bigger emergencies like losing your job or getting seriously ill. Once again – it’s never too early to start your own emergency fund.

Plan your retirement

I know – no one thinks about their retirement when they are in their 20s. If I can teach you one thing about saving for retirement – time is a huge factor. If you start earl enough, even very small monthly savings will lead to nice retirement fund. A popular suggestion is to put aside 10% of your income every time you receive your salary. I would say – start with whatever you can – just start right now. Remember that planning for your retirement is very important even at young age. Compound interest does a great job increasing the value of your investments – the only thing needed is time.

Start saving for a house

Even if you are not planning to buy a house for a while, you could still start putting aside some money for a down payment. Of course it is possible to buy property with no down payment, but this will only increase the overall cost of your mortgage. In many cases, without a 20% down payment, you will be obliged to purchase private mortgage insurance, which will considerably increase your monthly payments.

It’s unfortunate that personal finance hasn’t yet turned out to be a compulsory subject in schools or colleges. So a lot of people out there are fairly naive about managing their money.

But this doesn’t actually mean that personal finance will always be way above your head! Frankly speaking, it doesn’t take too much to roll back on the right path. Just read this article to know how to craft your own strategy. Fortunately, you don’t have to be good at math to grasp the ideas!

Use self control

May be you were taught by your parents about this when you’ve in your childhood. Just in case you haven’t mastered it, it’s not too late. Almost everybody found success in life through delaying gratification. If you can do it, it’ll be easy for you to have your finances nourishing.

True, you can easily buy something on credit the moment you want, it’s a better idea to wait till you’ve saved up that much. Do you love paying interest on your new pair of shoes or jeans or a bottle of milk? Avoid putting each and every purchase on your credit card.

Take full control of your financial future

Unless you learn to smartly manage your money, others will figure out ways to easily (mis)manage it. Unfortunately, some of them are ill-intentioned (e.g. crooked commission-based, so called financial planners).

At the same time, others might be pretty well-meaning, but might be totally ignorant about what the consequences of their actions are (e.g. Grandma wants that you buy a new house despite the fact that you can at best afford one of those double-crossing adjustable-rate mortgages). So do not rely on other people’s advice. You should rather take charge of your finances and research on some basics on management of personal finance.

Know where all your money goes

When you’ve read a few books on personal finance, you’ll know the importance of keeping your expenses below your income. The finest way of doing this is – budgeting. Once you’ve realized how the seemingly negligible things are adding up at the end of the month, you’ll know how to control that.

Same goes for recurring expenses. If you avoid wasting money on the luxury apartment now, chances are high that you’ll be capable of affording a great condo or a new home even before you know it.

Mutual Fund Advice

With the stock market near record territory and rising volatility in global financial markets, there’s no shortage of mutual fund advice on how to master the markets. For most investors sifting through all the advice and tuning out the background noise, the due diligence process can be daunting.

Mutual fund advice, usually in the form of glamour articles praising a fund manager’s success, can be found in financial magazines and newspapers, and even on the Internet and TV. Typically an innovative approach and, of course, past performance of a fund and its manager are promoted. One can read up on everything from funds that specialize in aggressive growth in emerging markets to large cap dividend yield plays.

There are even funds that will sell short stocks in addition to owning shares. These “long-short” funds typically advertise “market neutral” performance — that is an ability to reap gains despite volatility in global markets. Whatever the risk profile of the investor, there is probably a fund out there that will cater to the investor’s appetite.

One particular piece of mutual fund advice commonly heard from personal wealth and money managers is to avoid penny stocks. These tend to be small cap companies that were delisted from major exchanges for a host of undesirable reasons, and their shares, which trade from under $5 to fractions of a penny on the so-called bulletin board exchanges, tend to be illiquid.

This can present a huge problem for an investor who can purchase literally millions of shares for a few thousand dollars, who is suddenly unable to liquidate the position. Most or all of one’s money can be lost on such an exchange due to a low number of participants or illiquid conditions.

Bond investing is a staple of the diversified portfolio, and as with other investment vehicles sought by mutual fund money managers, there are a lot of choices. There are low yield bonds, often issued by government entities, that offer steady returns for little risk. There are higher risk, and thus higher yield “junk bonds” issued by struggling companies or financially uncertain institutions. All of these are available in the long and short term and are priced according to the mechanics of the debt market.

Stocks Success Tips

The stock market is sometimes an investor’s heaven and sometimes their worst nightmare. It is important to understand that penny stocks form a major part of the trading that takes place on Wall Street. Through this article we will be reviewing the various tips that will allow us to get a better insight into identifying the right kind of stocks so that we can succeed. Typically a single share price value of less then five dollars is what we call a penny stock.

The one basic quality of a penny stock is that it is very difficult to predict the price of a stock in the most accurate manner the reason being that the price of penny stocks is considered to be the most unpredictable and the most volatile of all the different kinds of stocks that are traded in the stock market. The price fluctuations that a stock can undergo in a day are vast.

So, once you have decided to buy a stock you also have to go with the fact that these stocks are highly risky and unstable which makes it very important to monitor them closely. Instant decision making and also speedy reflexes are also required when the stock needs to be sold and when you need to buy. Let us have a look at the penny stock trading tips over the next few lines. Firstly, it is very important to understand the background of the company whose stock you are planning to trade. This stock should have a strong base on which you would like to trade.

If the reason why a stock is being priced so high is not clear, in that case it is ideal for you not to invest in such a stock. Another important aspect that needs to be taken into consideration is the volume of the penny stocks that being traded on a daily basis.

If the volume of the stock that is being traded is high and there is strong backing for the price it would be an ideal pick. Another of the penny stock trading tips is that any stock should be reviewed for buying only at low price levels. This is a very important tip that can ensure success while engaging in stock trading.

Averaging out the price at which the stock has been bought. If you have bought a particular stock at a certain price following which you notice that the share price is falling even lower, it is recommended that you buy a couple of more shares at that price. By following this strategy you would be able to average out the buying price of the share. Keeping all these stock trading tips in mind will help you to be successful in trading.

Stock Investing Tips

Other names for penny stock investing include small cap investing, micro cap investing and nano cap investing. The stocks are common issue stocks with a trading price of five dollars per share or less. The stocks are sold over the counter using a quotation service. The stocks are highly speculative and may be very volatile as well. There are some important things to keep in mind before investing in these stocks. If you want to be a profitable trader, you should know how to find the answers to questions in these suggestions.

Check the Share Distribution

A wide distribution of shares is the best policy. When most or all of the shares are held by a particular offshore account, it is more than likely you would not be able to resell your shares if the price goes against you. If millions of shares are being sold in an effort to inflate the stock price, you won’t be able to sell, because there will be no one to purchase the shares. When you choose stocks, select those where there are numerous holders.

Verify the Legitimacy of a Company

You can take the time to find a telephone number of the corporation or its major executives. The phone should be a business line, rather than a residential number. The president or chief executive officer of a firm should not be the one answering your telephone call. In this understaffed situation, the status of this company is in question.

Check the Company History

Avoid the company that has a history of reverse mergers and reverse splits. This status would indicate little or no future for the success of the business. Instead, you should find a business that has a lengthy history with at least moderate success. The longer a company has been in business, the more likely it is to be a legitimate operation.

Whether you are doing penny stock investing or some other type, never invest more money than you can afford to lose. You may think you will always be successful in choosing and discarding stocks, but a high percentage of amateur traders lose everything they place into the market. Set your maximum risk level and stick to it.

Best Stock Investment Strategy

It’s the oldest question in the stock investment book: are you best off trying to find the best stock, or should you focus on finding the best stock investment strategy? And once again in 2014 and 2015, that’s the question of the day, and it amounts to timing vs. selection.

I recently turned 68 years old, but I remember the year 1973 like it was yesterday… because I was a new stock broker. I spent my spare time trying to find the best stock in the universe. After all, if you can find the best stock investment what does the direction of the market matter? My first pick as a best stock was Igloo Corp. Indeed it was a good pick in a year that turned out to be the beginning of a bad (bear) market… only because a major corporation then bought Igloo and Igloo shareholders profited handsomely.

Now, let’s get down to reality. Few people understand now what I didn’t understand then. Investing is more psychology than science. You will never find the best stock investment on a consistent basis. That leaves you with one best choice: to focus on market timing and the best stock investment strategy. The good news is that this is not rocket science or brain surgery. It’s a people thing, and people vote in the stock market by buying and selling shares.

In considering the best stock investment strategy for 2014 and beyond, ask yourself WHY investors had previously pushed stocks up over 150% in less than 5 years. Then ask, what will investors do when their collective perception changes? Bull (up) markets don’t last indefinitely. They come to an end and are followed by bear (down) markets.

It is a matter of greed vs. fear; and fear creates and feeds bear markets. Investors bought stocks for 5 years because stocks appeared to be the best game in town. Historically low interest rates made safer investment alternatives unattractive, plus the market had previously dropped over 50% in less than 2 years, making stocks look cheap. What happens if and when interest rates threaten to go up significantly? What’s your best stock investment strategy?

Don’t let greed dictate investment strategy. Fear can send stock prices down much faster than greed sends prices up. If you take a 50% loss in a bear market, you’ve then got to double your money in the next bull market just to break even. No one can accurately predict what the market will do in 2014 or 2015, but if interest rates rise beware. Investors are likely to take profits with an eye to the nearest exit. If fear takes over, you don’t want to be the last participant to leave the party.

The best stock investment strategy for the average investor is probably to take some money off the stock table… especially if you are heavily invested. Remember, the market was up over 150% by January of 2014. Sometimes, it’s better to be safe than sorry. If you are more aggressive by nature and want to be proactive, you might want to consider my best stock investment pick for 2014 and beyond. Here it is.

Investing is like the two sides of a coin. You can bet prices will rise, or that prices will fall. The best stock investment when stock prices fall: inverse ETFs (exchange traded funds) that represent a bet on falling prices. For example, stock symbol SDS is designed to go up in price when the S&P 500 Index falls… with financial leverage of 2 to 1. If the market drops by 10% SDS should go up 20%. If you want to cut your overall portfolio risk consider adding inverse ETFs to your portfolio.

In 2014 and beyond, focus on timing vs. selection. There are times when the best stock investment strategy is to be aggressive, especially after the market has taken heavy losses for a year or two. In a bull market that’s 5 years old, it’s time to be careful. Why not take some money off the table, and wait for the next market opportunity?

Essential Education For Young Adults

According to a recent study conducted by Charles Schwab, today’s teenagers in the United States have huge expectations about the type of wealth that they will build as young adults. Of the 1,000 teenagers that participated in the survey, boys on average expected to be earning $173,000 a year while girls expected to be earning $114,200 annually. The reality is, however, that only 5% of all wage-earning adults in the U.S. earn six figure salaries.

The Schwab survey further discovered that nearly two-thirds of American teens aged 13-18 years-old believe that they were knowledgeable about money management, including budgeting, saving and investing. However, despite this typical braggadocio that accompanies teenagers, barely a third of them admitted to knowing how to budget money (41 percent), how to pay bills (34 percent), and how credit card interest and fees work (26 percent). Here is where this survey is lacking and where a crucial gap in understanding must be bridged. Despite most teens lacking this knowledge, this is not the knowledge they need to build wealth. It is the knowledge they need to perhaps assume a baseline of fiscal responsibility as young adults, but hardly the knowledge that will help them assert their wealth-building muscles. As I stated in my last blog, teenagers need to learn the below subjects to acquire the critical gap in knowledge that will convert them from fiscally responsible young adults to adults capable of building wealth.

Many adults assume that their children will have zero interest in learning about how to build wealth, but the Schwab studies reveal otherwise. According to the Schwab survey, “nearly 9 in 10 say they want to learn how to make their money grow (89 percent). Two-thirds (65 percent) believe learning about money management is ‘interesting,’ and 60 percent say that learning about money management is one of their top priorities.” These stats are encouraging but the accessibility to the type of education that will truly benefit young adults is still highly guarded and certainly unavailable through typical channels of traditional education.

I strongly believe that young adults will never acquire the proper education to learn the critical knowledge they need to build wealth through traditional education or certainly not through educational programs sponsored by investment firms. Why?

If investment firms truly provided the type of education that young adults needed to independently build wealth then it would render their own services obsolete and unnecessary. No firm would ever willfully engage in such self-defeating behavior. This would be analogous to a tobacco firm sponsoring educational programs about the deleterious effects of smoking including lung cancer. I imagine that such firm-sponsored educational programs carefully design the programs to spark an interest in young adults about investing while still leaving them dependent upon them to invest their money in the future. It’s the perfect set-up for investment firms. Shaping young minds to give them their future earnings. However, it is most definitely NOT what will help young adults build wealth.

So wherever you seek information for not only your children but for yourself, ensure that the program you seek does not just teach you basic fiscal responsibility skills that still leave you dependent upon someone else to manage your money, but ensure that such a program is comprehensive enough to teach your children how to manage their money themselves as well. Ensuring that your children (or perhaps even you) seek knowledge regarding wealth literacy will, in the end, be exponentially more important than ensuring that your children become financially literate.

Experienced Financial Advisor

Financial advisors help their clients to use their funds smartly. Their service is invaluable for different companies or people who would like to properly use their money and limit all risks to minimum. To become certified advisors, people should go through a special training that lasts for several years and gain some experience that will ensure they will build a successful career. Some of the best financial advisors are working for brokerages and different financial planning companies, as they hire only the top professionals that have years of practical experience and a certain degree.

Advisors graduate and receive a bachelor’s degree in economics or financial field. However, those who have a master’s degree have better chances to be hired, since the postgraduate education ensures gaining more knowledge both practical and academic. Some big companies even offer the applicants to make some tests before hiring them, so they can assess their competence and knowledge.

Usually people who cannot manage effectively their finances or have too big incomes and want to invest them to receive even more profits make use of the services that a financial advisor offers. The advisor will make the necessary suggestions and is going to determine the right course of actions taking into account all possible risks and the current economical situation. The goals and future financial plans of the client will also be of a great importance for the advisor, who will try to develop strategies to fulfill them. In addition, he will make use of different advanced techniques to estimate the amount of money needed to meet the different objectives. The portfolio of the client is going to be properly balanced by investing into the right amount of shares and bonds to increase the income. The client will receive support for making some critical investment decisions and avoiding the risks. He will also be regularly informed about the available funds he may invest.

The services that a financial advisor provides are good not only for prosperous people and companies that would like to invest safely, but is also beneficial for all those individuals, who are trying to get on feet. Those who would like to get out of debt can use advices of a financial professional to make effective plans and fiscal decisions that might change their future, offering them a better life. If you are not sure which is the right track, better choose the services of a skilled advisor, who will benefit you a lot.

There are usually two payment scales applied from financial advisors. Hourly rate is applied for the time spent by advisor on particular financial case. Those who would like to work out financial plans that should resolve some issue right away would rather opt for an up front payment.

It is very important to use the services of a trusted financial advisor only. Since you will share a confidential information regarding your financials with him, make sure that he will not going to take advantage of this on your account. Make sure that the advisor you have chosen is really good at what he does and check his credentials and experience before hiring him.

Online Stock Trading

The ease of online stock trading draws the attention of new investors and investors looking for an alternative to the old methods of trading. With little more than an account and a mouse fortunes can be made or lost from the privacy of one’s own home. However, before getting carried away, investors should look into the basics of stock trading strategies to help protect themselves from what can be a very tempting albeit confusing world of internet stocks.

The only consistent notion about stocks is that they are inconsistent. Investors that make decisions based entirely on emotional “gut feelings” or make decisions based on desperation will only do about as well as they will at the casino. Planned, precise, and well thought out decisions make for strong trades. Online stock trading need not be a random roll of the dice.

Regardless of any pre-planned strategy that an online investor approaches the online trading world with, there are two basic entities that need to built into any strategy. All trading is based on maximizing the profits while minimizing the risks. These two factors also tend to cancel each other out. The greatest risks usually turn the greatest profits while the smallest risks typically turn tiny but long term profits. This means that an individual investor needs to find their individual risk tolerance while building their strategy.

There will be losses. There’s no strategy in the world that can guarantee online stock trading without loss. Loss is part of the game no matter how serious the player. The most successful online stock traders in the world have one basic rule implemented into their trading strategy. They all have their stock portfolio divided into percentages. They have a predetermined percentage seeking high risk, high return stocks, a predetermined percentage seeking medium risk, medium return stocks, and a predetermined percentage seeking low risk, low return stocks. The predetermined percentages vary from investor to investor and some have the bulk of their percentages in low risk while others have the bulk in medium risk. Placing the bulk of the available funds in high risk stocks is a sign of either gambling or desperation, neither one is considered a very sound strategy.

The reason that these percentages are predetermined for the vast majority of successful online investors is to help maintain unemotional investing. If there is a set amount of the available funds doing predetermined job, then the emotional windfalls and shortcomings are incapable of moving the percentages around. Online stock trading can become emotional, and when it does online traders start making bad decisions based on their emotions. Keeping the emotional trading to a nonexistent minimum is very difficult for many online traders, but it is also on of the best laid online stock trading strategies there is.

Financial Advice

When a person is approaching his retirement age, it is essential to plan for the future financial requirements in such a way that he can manage his family during this older age, where he will not be earning any income. Here is some useful financial advice for people, who are nearing their age of retirement.

As an initial step, it is essential to identify the guaranteed income he would be earning like in the form of pension. When this expected amount is known, it will be easier for him to further plan his commitments. Next comes the money he has in his savings account and this amount should be added along with the amount he will be earning each month after retirement either in the form of pension or from any other source like rent from a building.

Then, a rough estimate of the monthly expenses that should be made for his family should be calculated and this amount should be subtracted from the previously obtained amount of monthly income + savings in bank accounts. Most of the people approaching their retirement age will be having some plans to visit some places of interest with their spouse after retirement twice in a year or at least once in a year. Here, the amount that might be required for these trips should also be calculated to find whether the trips will be coming within their budget. If not, they can try to earn income by doing some internet based online work if they are very much particular about those extra dollars for tours.

When it comes to financial planning for the life after retirement, it is always essential to keep some money aside for meeting some sudden medical expenses. Some years ago, people were dependent on their children after retirement, but nowadays, this trend has changed and everyone wishes to lead am independent life.

Nowadays, there are financial planning organizations offering the best financial advice under different categories like estate planning, wealth creation, taxation planning, lifestyle planning and of course retirement planning.

Retired life can be spent in peace only when people are financially secured and safe since it is an age where peace is highly essential after several years of work pressure. This is the period when people get time to spend with their family members and financial security during this age can obviously enable people to enjoy their retired life. So, if you are approaching your retirement age, get the help of the financial firm offering the best advice for financial planning.

Online Trading Tips and Advice

Since the introduction of online trading, it has become the preferred way to trade stocks and other securities. The reasons for this include how quick and easy it can be, not to mention access to information on the global stock exchange 24/7. Online trading can be an exciting and successful venture for a novice investor. Making educated decisions based on research and advice from expert traders will make all the difference.

Finding Information

It is often said “ask and you shall receive.” In the case of online investments, “search and you shall find” is a great mantra. There are a vast range of outlets to help find the best online trading tips and advice to help the beginner investor.A simple internet search can turn up a plethora of e-books, articles and investment websites such as “Invest” where articles are written by expert traders.

There are many things you can learn while researching investing, including:

– how to identify trends in the market

– timing in regards to entry and exit while trading

– understanding indicators

– and more

Don’t Be Naive

It is important to use your smarts when doing your research online for investment strategies and tips. While there are a great number of resources available to you online, one should keep in mind that anyone can upload almost anything online. That being said, double and even triple-checking the information you find against multiple websites or even books is a good way to determine if the information you have found is the best online trading advice. If the tip is worth its weight in gold, then it will be mentioned by multiple experts in the field as valid.

Try & Try Again

There are differing views on how you can be truly one of the best online trading amateurs in the stock market. Some believe that it is best to try your hand at paper stock trading. This involves using a program to simulate stock trading. It is an amazing platform that novices can use to try their hand at stock trading without investing actual money, thus they can’t lose any money either. It can be considered a safe way to train for real stock trading. If you choose this route, experts recommend that after about ten successful trades using the simulator, you are ready to trade in the real stock market.

There is another side that believes that the only way to learn about stock trading is to dive right in and get your feet wet! Though you may read article upon article filled with tips and tricks of the trade, the only true way to learn about what works is through trial and error. Choose the best online trading tips that you receive from the articles you read and use them as your guide along with common sense, diligence and of course, caution.

Whatever you choose, remember to start small. Investing a little money up front reduces the amount of losses that you could potentially have. Maintain a budget and stick to it! Using the information you acquired, try different strategies and take the most profitable route. Most importantly, know when to withdraw! You always want to avoid a major loss, whatever you do. Use the best online trading tips, advice and instincts to help you gain success in the stock market.

Choosing a Financial Planner

A financial planner can be an invaluable advisor to you as you work towards your financial goals and dreams. A good financial advisor can act as the quarterback for your team of advisors, working with your tax advisor, insurance agent, etc. to make sure the different parts of your financial plan are working together.

Most people could use some help keeping their financial house in order. When should you hire a financial advisor? Some people hire financial planners only when they need advice about a specific issue such as saving for college, paying down debt, or evaluating an early retirement offer. Others hire a financial planner to complete a comprehensive plan and monitor that plan on an annual basis. No matter what your reason is for hiring a financial planner, one of the greatest advantages of working with a financial expert is the added motivation you’ll have to achieve your financial goals.

One concern with hiring a financial professional is that anyone can call themselves a financial advisor. Unlike lawyers and CPAs – where you have to take an exam and have specific training before you can hold yourself out as a CPA or an attorney – there are no such requirements before you can call yourself a financial planner.

However, there are some designations in the financial planning field that help distinguish experienced, trained financial professionals from others who may not have any qualifications. Some of the designations to look for include:

Certified Financial Planner (CFP) – to be a CFP, you must meet an education requirement which shows that you are knowledgeable in all areas of financial planning, you must pass an exam, and you must have three years of relevant experience before you can hold yourself out as a CFP. CFPs must also abide by a Code of Ethics which are enforced by the CFP Board.

Chartered Financial Analyst (CFA) – A CFA is a title given to someone who has passed an exam about investments and finance administered by the Financial Analysts Federation.

PFS – CPAs who have several years of experience providing financial planning for individuals can attain the PFS designation. CPAs who also have the PFS designation have extensive tax and financial planning experience, so they are a good choice for people with complex tax situations.

You should contact and interview several financial advisors before hiring one. Some questions you should ask include how are you compensated, do you have an area of specialty, do you have clients similar to me, how long have you been providing financial advice, etc.

Working with a Fee Only Financial Planner

You don’t have to be rich to work with a financial planner. Many people hire financial planners to help them achieve their financial goals and dreams, whether they have a million dollars or just a few thousand dollars saved. You’d be surprised at the number of people who have turned to financial advisors for help with retirement planning, investment advice, budgeting and debt management, tax planning and/or comprehensive financial planning.

There are many reasons why you might want to talk with a financial planner including:

– to learn how much you really need to save for retirement
– to determine the best investments to meet your goals
– to make sure you are getting all of the tax benefits you are entitled to
– to understand how much and what type of life insurance you need
– and many more…

You don’t need to wait until you have enough money or are ready to retire to work with a financial advisor. Young people just starting out can benefit from financial planning just as much as married couples preparing to retire in a few years can. Whether times are booming or we’re in a recession, whether you just need help creating a budget, saving for your children’s college education, or you have complex retirement planning needs, anyone can benefit from financial planning.

What Should You Expect When Working with a Financial Planner?

In general, a financial advisor will start by reviewing your current situation and helping you identify your financial goals. Once your goals and objectives are determined, a financial planner will prepare a plan that will help you achieve your financial goals through saving, investing, budgeting, etc. The plan should cover all aspects of your financial situation including cash flow and debt management, investments, retirement, taxes, insurance and estate planning. Other areas that may also need to be considered include saving for college, or business planning.

Once you have a financial plan in place, you should review it periodically to make sure you’re still on track to meet your goals. Your financial situation is always changing, so your financial plan should change as well.

What to look for When Choosing a Financial Advisor

There are many types of financial planners including fee-only financial planners, fee-based advisors or the traditional brokerage firm. Each provides different services, and more importantly, each is compensated differently. Brokerage firms typically sell you a product for a commission and their main service is investment advice. Fee-based advisors will generally provide more comprehensive financial planning, but their main service is managing your investments for you, and they earn a percentage of the assets managed for their compensation. Fee-only financial planners focus more on comprehensive financial planning, including retirement planning, investment advice, budgeting, tax strategies and estate planning. Fee-only financial planners typically charge an hourly rate or a project fee and don’t earn commissions on any products recommended.

In addition to services offered and compensation, you should also look at the advisor’s experience, qualifications, and their area of expertise before hiring them. While CFPs and NAPFA-registered advisors must have met certain education and experience requirements in order to use the credentials, other financial advisors may not have any experience or qualifications.

Why Work with a Fee Only Financial Planner?

When you work with an advisor who is dependent on the commissions they earn from products they sell, there may be a conflict of interest. With fee only financial planners, there is no conflict of interest because the financial planner is paid directly by you for the services they provide, not the products they recommend. A fee only financial planner does not benefit economically from the products they recommend to you, so you can be sure that they have your best interests in mind when they make a recommendation.