How Financial Planner can Help you Meet your Goals

Choosing a financial planner can help you meet your financial goals. However, the process is not without pitfalls. Selecting a financial planner is a very personal decision depending upon what you would like to accomplish, but there are broadly applicable criteria as well.

Personal Financial Planning by G. Victor Hallman, Jerry S. Rosenbloom Provides in-depth coverage and analysis of the latest tax law changes. In addition, it features an entirely new chapter on planning and paying for education expenses, including the new 529 plans; ramifications of the GST estate tax repeal; new checklists and questions to tie up each chapter; and more.

The most important thing to remember is that the financial planning industry is unregulated. The majority of planners have not passed any tests to demonstrate their competence. Only about 40,000 of the 250,000 or so planners in the United States are Certified Financial Planners. Chartered Financial Consultants and Personal Financial Specialists, which are certifications offered by the insurance and accounting industries, account for only a small portion of the remaining planners. Selecting a planner with a certification is a critical initial consideration. Finding someone who is also experienced and participates in continuing education is important as well.

In addition to their qualifications, it is important to understand how you will be compensating your financial planner. Many supposed financial planners are really just sales representatives for a particular financial product. Understanding whether your planner subscribes to a code of ethics that includes fiduciary responsibilities can shed light on the degree to which the planner is likely to place your needs ahead of their compensation system.

Two compensation systems are prevalent in the world of financial planning. Most planners get a portion or all of their compensation through commissions on financial products they sell you. These arrangements can create a conflict of interest between you and your planner. Your planner should be forthcoming about how commissions affect their compensation and will influence the products they will recommend to you.

Alternatively, some planners are compensated solely by an annual fee. The fee is typically based on a percentage of your assets under management. One percent per year is typical. Fee-based planners are not subject to the same conflict of interest that exists with commission-based planners. However, you may pay more for their advice than you would by going the commission-based route. They are also more difficult to find.

Another important consideration is the aspects of your financial life that you are seeking advice about. Many financial planners only have adequate knowledge to address a small portion of a client’s financial condition. Those with an insurance background are best at insurance, while those with a brokerage background tend to be better at investing. It is best to find a planner who can understand your entire financial situation and provide comprehensive financial advice. At the very least, try to match your planner’s background with your most important problems or obtain advice from multiple planners with different specialties.

The final consideration is the nature of the firm you would be working with. Larger companies and smaller companies will likely provide different degrees of service and fee structures. Understanding whom you will be working with on an ongoing basis to formulate and implement a financial plan is very important. There is little point in interviewing a famous financial planner if you are ultimately going to be assigned to a staff planner that you have never met to actually create your plan.

By interviewing multiple financial planners before you make a selection, you will best be able to find one you are comfortable with. Personality, qualifications, and compensation structure are all important areas to evaluate. Before making a final selection, check into any disciplinary problems your prospective advisor has had by contacting your state’s insurance department, the National Association of Securities Dealers, the Securities and Exchange Commission, and the group overseeing their planning certification. While not guaranteeing you will not encounter problems, applying this approach will greatly reduce your chances of having an unpleasant experience.

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• Modern Creative Financing
• How to Build, Manage & Maintain Wealth

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Modern Creative Financing

Creative financing is usually a term used in real estate, where you are able to buy a home with little or no money down. If you take these ideas and look on a broader term or expanse you can come up with funds you had no idea where available to you. If you are starting your own business, to a small purchase of a new computer system for your child going to college.

Many people today feel that using a credit card or other loan procedures is creative financing. It isn’t, all that does is to create a new bill that you must add to your monthly budget.

Simple ways to creatively finance any venture you would like to make are unbelievable easy. First you must set a budget, estimate the amount of money you want to spend. Once you come up with that figure it is then time to look at your surroundings, what do you have that you can gain monies from that you have not thought of?

If you own land, look around your land: do you have trees? Why not call the local saw mill, or timber company and sell the trees from your land? You may be asking yourself will this take away from the value of my property the answer is no it will not, but you will end up with cash in your pocket.

What else do you have that you are willing to get rid of? Antiques? Rare coins? Books? A swing set your children have outgrown? Do you have a vehicle that you rarely use and want to sell? Used computer programs, CD's, movies, tapes, and clothes? List them in the local paper as a must sell. Use the Internet to your ability and list them on Ebay or one of the other leading auction blocks.

If you are willing to go into a small amount of debt to gain financing try a local institution such as a lending company or bank. Use a vehicle that is paid for and apply for a signature loan for the amount you need. If you are unsure of what your car’s going rate is you can also use online Kelly blue book price guide for used cars.

If you have a car that is not running and you want to sell parts from it, list it with an auto trader: it is a free service. It is unbelievable the responses you will get from people who need just parts. Selling equipment you do not use, or tools that you have not touched in years can also be listed in the classifieds for sale.

Applying for grants for special projects often work well: as stated before this takes some effort, but the rewards can be upward of $30,000 or more depending on your project. Grant information is available online as well as the proper forms to fill out to obtain them. Use them, that is what they are there for.

Everything has a monetary value, and income can be forthcoming if you put the small amount of effort into it. Effort, initiative is what most people lack when it comes too creative financing. Taking the time to actually inventory what is worth value. Even a simple garage sale will bring in income you had not had before. Every penny, nickel, dime, quarter matters when you are in need of creative financing. Use it all to your ability and make it happen.

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Which Bond are Right for you?

Most people know about the basics of investing in the stock market but many people are puzzled as to what bonds are. In one word, a bond is a loan. The loans can be from the federal government, a federal agency, municipality, or corporation. When you purchase bonds you are lending your money to whomever you buy the bonds from. In return for lending them your money you are paid a fixed rate of interest over a set period of time. When the bond matures the investor’s money is usually returned with the earned interest included.

Bonds: The Unbeaten Path to Secure Investment Growth by Hildy Richelson, Stan Richelson An expanded and updated version of "The Money-Making Guide to Bonds", is designed to educate novice and sophisticated investors alike and serve as a tool for financial advisers as well. It explains why bonds can be the right choice and how to use them to achieve financial goals. It presents a broad spectrum of bond-investment options, describes how to purchase bonds at the best price, and, most important, shows how to make money with bonds.

Bonds are like stocks because they are both traded. Therefore you can buy the bonds after they are originally issued while at the same time you can sell bonds before they mature. Bond prices are subject to volatility in relation to market conditions.

When a person is issued a bond they are basically promised to get their money back. Bondholders are paid before anyone else, even stockholders and creditors, if the company runs into hard times or goes bankrupt. Bonds give you a stream of income based on their rate of return. Bonds are usually much less volatile then stocks are. Bonds also can provide a tax break because municipal and government bonds are sometimes exempt from state and federal taxes.

When a bond is issued, the issuer is essentially promising to return your investment, the face value of the loan. The main disadvantage to bonds is that they generally have lower returns than stocks and mutual funds. Bonds are like stocks because their prices are sensitive to interest rates as well. Bonds also carry with them some heavy terminology, which can be confusing and hard to understand.

Type of Bonds:

Government Bonds – The U.S. Department of Treasury and other federal agencies issue treasuries and federal agency bonds. Treasuries are basically risk free because the U.S. government backs them. They are issued to help finance all of the costs involved in operating the government. Municipal Bonds – State and local governments to help pay for schools, streets, highways, hospitals, bridges, airports, and other public works issue municipal bonds. You usually don’t have to pay federal taxes on the interest earned from municipal bonds.

Corporate Bonds – Corporate bonds are issued by businesses to help pay for business expenses. There are a ton of different corporate bonds available all with their own interest rates, maturities, and credit ratings. Corporate bonds are generally higher risk bonds in comparison to municipal and government bonds. They also have a higher rate of return than municipal and government bonds. However you do have to pay taxes on the interest earned from corporate bonds.

Municipal bonds are issued by more than 50,000 state and local governments and their agencies to fund projects such as schools, streets, highways, hospitals, bridges, and airports.

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Getting Your Finances Ready For Baby

So you are having a baby or maybe this is your second baby. While this is definitely one of the biggest changes of your life from an emotional and physical standpoint, it also impacts your finances. As if you don’t have enough to worry about! Just taking a few steps and making some financial preparations will only help you after the baby comes.

Family Finance Handbook: Discovering The Blessings Of Financial Freedom by Frank Damazio, Rich Brott With insights gained from twenty-five years in business and ministry, the authors lead you through the book using biblical principles of stewardship and financial management. They show you how to get out of debt and guide you carefully through the investing process. Family Finance Handbook shows you how to develop a right perspective, especially relating to your value system, priorities, vision, personal goals, and lifestyle.

It’s never too early to start your spending plan and budget. Items are definitely going to cost more than you think they will. Who knew formula would be at least $22 a can and that a baby can go through 2-3 cans a week? Some additional items to think about when redoing your budget: medical insurance, childcare, food, furniture, clothing, and toys. Ask your friends with children what they are spending to get a rough idea of how much things cost in your area. Instead of thinking about how much you are going to give up, think instead about setting priorities on what is important to spend. So maybe you won’t be traveling as much but you still want to get your hair done. If your family is considering a loss of income, this is especially important! Go over your spending plan regularly, at least once a month.

There are a few key financial papers you need to think about, your will and life insurance. Updating (or creating a will) can be one of the toughest decisions you and your family will have to make. It’s not just about changing the beneficiary but deciding who would be the trustee in case anything happens to you. In addition to thinking about who would be the best person to raise your child, you have to decide who the most fiscally responsible person is too!

Money Came by the House the Other Day: A Guide to Christian Financial Planning and Stories of Stewardship by Robert W. Katz, Jamie Katz "This is a practical, common sense handbook that every Christian should have. I heartily recommend [it]" by Ronald E. Cottle, Ph.D., Ed.D., President, Christian Life School of Theology, Columbus, GA

While life insurance isn’t the most exciting thing to think about it, it has to be done. Having a baby is one of those times to make sure you have enough life insurance. Schedule a few appointments with agents to make sure you getting the right type of life insurance (term or whole life) as well. Visit www.accuquote.com to learn more about life insurance.

Finally, don’t forget about your retirement. With more and more women staying-at-home or working part-time, your retirement plan often gets forgotten with everything else going on. Next thing you know, you haven’t been saving for more than five years and you have been missing out on precious compound interest. You can always use the money for your child’s college education. Remember, children weren’t raised in a day and your finances can take a few months to iron out the kinks as well. Just take it month by month and enjoy the newest member of your household.

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How to Build, Manage & Maintain Wealth

You’ve tried making more money. You’ve tried cutting back on expenses. You’ve tried borrowing and consolidating. You’ve tried some sure-fire quick fixes. You’ve denied the situation and justified it because others are in the same situation or worse. And besides, when the kids move out, go to school, or you give up the house for a condo, there will be more money and you’ll have two incomes again!

Retire Sooner, Retire Richer : How to Build and Manage Wealth to Last a Lifetime by Frank L. Netti This book answer important concerns on these matters, including: Is a financial planner necessary? How can I design an effective, personal pension plan? How can I be certain that my savings will last my lifetime? What kinds of insurance options do I have?

If you have more debt, not including your mortgage, than you could pay off in three months—yes, three months!! If you have refinanced or consolidated once already and think it’s time again, or you have lived in your house longer than five years and your mortgage balance is still the same or larger, you know it’s time to do something different. But what? You have already tried everything you can think of and your lifestyle can’t squeeze anymore out. There are no magic bullets, but there are some solid steps you can take to create lasting solutions and to move away from financial struggle, overwhelm, and guilt towards freedom, security and significance.

There are three phases of our financial lives: wealth creation, wealth management and wealth distribution. These are not age driven or dollar driven phases. They are also not mutually exclusive. You don’t suddenly say “I’m moving into wealth management now.” And just because you’re working primarily in wealth creation doesn’t mean you ignore the aspects of wealth management and wealth distribution. The foundational principles, habits and knowledge all begin with wealth creation. So when you’ve tried everything you can think of, or when you feel stuck, you go to these foundational skills and principles—regardless of your age or acquired wealth. The number might have more zeros and the impact might extend beyond simply you and your immediate family—but the principles are the same.

Phase One: Wealth Accumulation
First: You need to enlist the help of a professional. However, that’s not as easy as making an appointment at the bank; or arranging a meeting with an investment advisor, insurance agent, accountant or lawyer. Your professional advisor needs to be able to provide you with advice on your entire financial picture and make suggestions based on a variety of reference points (lending, tax, cash flow, investing, business, insurance, etc.). Furthermore, they need to be able to work with you over a period of three to twelve months—perhaps with weekly, semi-monthly or monthly contact as you implement some changes into your finances and your lifestyle. You need to be prepared to pay someone for their help and their professional, unbiased expertise.

Second: You need to commit to a program that will take some work and will take some time. It will involve doing some things that might seem tedious and insignificant, but you must be able to commit to a process that will build a solid foundation, develop new skills and expand your knowledge of wealthy habits. How long this process takes will depend on you, but to implement this phase of financial planning is likely a year-long process—maybe more. Beyond building your foundation, you then need to commit to learning how to build wealth and that might take a few years to get started, and obviously maintenance is a lifelong process.

The third step to moving towards significance and away from overwhelm is to begin to implement strategies according to a logical sequence. The sequence starts with baby steps in the first phase, which is to develop habits, skills and strategies to effectively build a financial plan from which you can maintain, develop and sustain. The following process assumes you are starting from scratch in phase one, but it is important to review even if you feel like your questions are all about passing on your wealth and using if for a higher purpose:

• There is no judgment, remorse or blame—where you are is where you start!
• You need written goals and you need to know why they are important to you. Get a journal and start writing. If you would like an assisted journal contact us at www.moneyminding.com for more information.
• You need to document where you are today, with emphasis on the specific details of your income and expenses by tracking:
  
  a. Every item you spend money on for three months or more. How? Carry a notebook, ask for a receipt or get creative, but you need to be specific—no judging—just the facts.
  
  b. Learn to balance your cheque book. Even if you don’t write cheques you will have transactions from your account. Balancing your books is a skill that you will use throughout your financial life with business accounting, investment statements and personal financial statements. It might seem tedious, but you can’t expect to begin the habit when you have millions of dollars to manage. It’s something that starts small and builds.
  
• As best as you can, use CASH! Studies show that using plastic, even if paid off monthly, will produce an average of 35% higher expenses. Why? Because it’s easy. Individual expenditures fall within comfortable limits and you don’t have to pre-calculate your expected needs when you’re trying to determine your cash requirements. Withdrawing cash in advance will have the advantage of forcing a mini-budget calculation. Furthermore, using cash will enable you to set up specific savings programs that you can’t do with plastic purchases (see below).
• Establish banking that enables you to transfer money easily to meet specific needs. The type of bank accounts need not necessarily be with a bank, they can be short-term investment accounts, or special places for saving cash as mentioned above.
  
  a. At a minimum you will need one chequing account and one savings account. A savings account is not the same as an investment account. Savings are for specific purposes, investments are for longer term needs, where your money is expected to be working for you. You might also consider a dedicated account specifically for plastic, electronic transactions.
  
  b. Whenever a deposit is made, your first two transactions (and entries into your cheque book) are an amount for savings and an amount for giving. I recommend immediately transferring 10% of the deposit to your savings account and withdrawing 10% in cash for giving. Giving can be for gifts, causes you believe in, charities, churches, etc. The key is to take this money in cash. If you find that you get to the end of the month and you need some extra money to pay the bills, the first amount to come back into your chequing account is the necessary amount from savings. If you still need more, you will have to take some of your cash and deposit it back into the bank – a much harder task. If you consistently develop these habits, you may find that after a few months the amount transferring back isn’t the full amount transferred to savings in the first place. You can learn more about these cash management strategies from a variety of articles and programs at www.moneyminding.com.
  
• Assign categories to your spending and begin to make informed decisions that will help you come up with a budget that is designed to meet your planned expenditures. A budget will let you feel spontaneous in your spending because you will know that the funds are available. There won’t be any questions, guilt, or uncertainty about your spending because you can pre-plan to facilitate unplanned expenses.
• Establish a regular routine and schedule for you to handle financial matters. This involves not only taking time to plan, track, budget, analyze and monitor; but also, to discuss situations with your spouse or partner. Businesses have regular board meetings, they have dedicated functions to handle these tasks; and they would surely not function efficiently without giving finances and planning a key role in the business. How can we expect to operate our homes giving only minimal attention to these important tasks? We need to value the tasks, habits and skills necessary to produce and manage millions of dollars before we actually have the money.

Phase Two: Wealth Management
The skills learned in Phase One are expanded because savings has accumulated and investment decisions are necessary. Perhaps budget planning has expanded options for income generation, and you are earning more. The key to this phase is that it isn’t something you necessarily do after all the steps in Phase One of wealth management. They have to be learned along the way at the same time. The essential components here are a focus on income effectiveness and efficiency, managing risks, investing for regular, stable income; and then adding a growth component and increasing risks as your overall financial situation and personal comfort grow. Throughout this stage a focus on minimizing taxes and implementing loss protection plans is fundamental.

Phase Three: Wealth Distribution
Again, this isn’t something that happens after the other phases. Distribution expands on the skills, and strategies that have been put in place in the previous two areas with a focus now on ensuring that your wealth is helping you focus on your top priorities, and is being used to fulfill purposes and causes for which you believe. This phase also ensures that your legacy is planned and not left hap-hazard. It’s about pulling everything together into a tidy package so your wealth can now benefit others as well as it has yourself. Insurance strategies, planned chartable giving, corporate tax structures, trusts, wills and estate planning programs are all integrated in the wealth distribution phase.

This entire three-phase program might sound overly simple – and it is, sort of. It all starts with a vision and some written goals and a commitment to do whatever it takes to see it through. Believe ~ Begin ~ Become all that you can. Don’t let your questions and uncertainty with how and what to do stop you from living your life!

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Working With A Financial Planner

More and more people are meeting with a financial planner or advisor. They are not for the very wealthy anymore. Perhaps you need a check-up on your current finances or you want to make sure you have enough to retire or you need someone to manage your money or you have a life change and want to check in with a financial professional (i.e. new baby). To get the most out of your meeting and relationship, the following list will provide guidelines and questions to ask.

• Are you aware of my goals? If you want to buy a house in the next 5 years, your money will be invested differently than if you don’t want to touch it for at least 10 years.
• What is your investing style? Stocks, bonds, mutual funds, Large-cap, to name a few. Many financial planners specialize in certain areas of the market and you want to ensure it matches your goal and you remain diversified.
• What is your strategy with my portfolio for my goals? You want to make sure they are aligned with your risk level.
• What are your commissions and how do you get paid? There are two main ways financial advisors get paid: flat fee based on a percentage of assets (average is between 1-2%) or a commission based on sales. Make sure you know how they are getting paid. If they say they don’t get paid by you, remember they ALWAYS get paid.
• Will I be able to speak with someone regularly? Or will you be calling me regularly? Some advisors seem to forget about their clients. You are paying a lot for service so you want to make sure you get it!
• What kind of periodic reports will I receive? Will I meet with you regularly? Have them go over the reports with you.
• How many years of experience do you have? And what did you do before you became a financial planner?
• What are the names and numbers of other clients that can serve as references?

There are also fee-only financial planners that get paid on a hourly basis. Many of them are completely independent. Therefore, they will be able to give you an unbiased analysis of your personal finances. To get more information, National Association of Personal Financial Advisors (fee-only) www.napfa.org. At the end of the day, it is going to be about your connection with the financial planner. With that being said, don’t forget about the financial fundamentals and how they benefit you.

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