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Importance Of Be More Involved In Financial Planning

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A financial planning is something that each people does everyday, for example when a man plans how to provide for the needs of his family.

A financial planner or personal financial planner is a practicing professional who helps people deal with various personal financial issues through proper planning, which includes but is not limited to these major areas: cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning (for business owners).

Source: Wikipedia

Professional financial planners wanting to manage your money or give you advices, are competent and protect your best interests. Unfortunately, it not always be so.

financial planning
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Choosing the good advisor you can trust and that give good advices can be an hard work for anyone. For this, I think many people will agree with me that you need to increasing your level of personal involvement in your financial future.

Here, I’ve put 4 thing you need to learn to be more involved in financial planning:

1. Learning to save money on financial planning – Often, you are going to pay something for a financial advice. Yes, it’s not free. Whether you are paying a fees based on assets, pay commissions, you are always paying something. But if you make something that remain within your realm of competence then you will save money and you let advisor make only what you cannot.

2. Learning to save money on financial product - It could happen that the financial advice is free but advisor make you buying something that is not best or your problem. For instance, some insurance agents make you paying financial products for a free advice.

3. Learning to check how many clients a financial advisor has – Some advisor with a lot of clients may be distracted by other clients and by their personal needs and not give much attention to you. Also, some clients have more money then you, and more probably they receive custom solutions while you getting standard solutions.

4. Learning to be a better consumer – If you following your own financial plans, you learn more about how your actions affect your financial plans. This will teach you to be a better consumer and improving your plan outcome.

Many people think they can handle what they have, However, my recommendation is to ask to an professional financial plan for an advice first, and then deside for yourself what to do with it.

It’s also important to recognize when a do-it-yourself method is not going to work for you and there’s need of a professional can provide you with better, faster results.

Categories: Financial - Tags: advisor, Financial, plan, planning

5 Questions To Ask To A Financial Planner

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When you think maybe a financial expert could help you to manage your investments, before you decide if choosing a financial planner or better before you decide if a financial planner is right for you, you should ask him some basic questions.

One thing you need to keep in mind is that the financial planning industry is unregulated. Only about 40,000 of the 250,000 have passed tests necessary to be Certified Financial Planners and are able to demonstrate their competence.

Remember, you need to be careful with these people, especially when you talk about anything regarding money.

financial planner
Image Credit: jpskydawg

1. How much do you charge? - Recently, I met with a planner, and he wanted to work fee-only. I hate this kind of people. However, most planners get a portion or all of their compensation through commission-based, fee-based — or a combination of the three. Don’t hesitate in asking this question, it may help you know exactly what you are paying for the working relationship.

2. Ask if been fired by a client - Ask your planner if a client is gone elsewhere. May be cause of a lack of service by the planner’s or it could just be a clash of personalities than parties.

3. I can see your U4? - The U4 is the “report card” of your financial planner’s background. Asking the financial planner to show his U4, so you find if a complaint has been filed against him. If he’s done anything wrong, it will be showed on his U4. If financial planner not tell the whole truth, you can always check finra.org.

4. How many clients do you have? – Do you want to be considered as a person or just a number? Whether you want understand how much you will be considered going forward, then a simple thing you can do is to asking your planner how many clients they have.

5. Please, your portfolio? - How to do to know if your financial planner practice what he preaches. It’s simple, you need to check If the financial planner is willing to show you some of the holdings in her portfolio. Exactly. It might help you to believe in her investment strategy and would you trust.

Categories: Financial - Tags: Financial, planner

What Are Stocks?, Basic Stock Terms You Have Heard

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What Are STOCKS?

Stocks – Represents a shares of ownership of a corporation. In brief, once you become a stockholder of a company, you are owner of a part of that company. For instance, If a corporation has issued 100 stocks in total, then each stock represents a 1% ownership in the company.

This Stocks are usually sold by the owners of a company to gain additional funds to help the company grow. If the company works well and get good results, or even if everyone thinks the company is going to do well, the price of the stock goes up.

Securities - Is an financial value that representing the proof of one’s ownership. The entity issuing the security is called the issuer. Treasure is backed by the U.S. government and including Treasury bills, notes, and bonds.

stocks
Image Credit: Katka s.

Common stock: Usually, these are purchased for get the control of ownership of the companies. The share of profits that investors get from the companies, is called a dividend. Holder of common stocks divides profit in equal pro-rata with stockholder and are able to influence the corporation through votes.

Preferred stocks – Preferred stock is a ‘higher ranking’ stock, where holders have the preference get a dividend, prior any dividends are paid to the holders of common stocks. Preferred stocks have a limited dividend and a particular limited redemption and liquidation price. Usually carries no voting rights.

Warrants – A corporation can issue, share, purchase warrants. To raise additional capital, the corporation issuing warrants. The holder buy stock of the company that issued it. Usually, the price is higher than the stock price at time of issue.

Stock exchange – A stock exchange, is a corporation which provide financial instruments for the issue and redemption of securities as well as other financial instruments including the payment of income and dividends. The New York Stock Exchange is the first stock exchange in the world by dollar volume and the second-based of number of companies listed for trading.

Categories: Financial - Tags: Financial, securities, stocks, warrants