Category: Financial Planning
Getting financial guidance should be straightforward. But, in my experience, the process of seeking expertise can take me down the wrong path if I’m not careful. Here’s how to recognize the right path.
In a meeting with a financial professional, I may freeze up when quizzed about financial goals, fret that I haven’t accumulated a fair amount of money based on my age and income, or fear being judged for past mistakes. Worse, I may get frustrated if a professional establishes financial targets that are out of sync with my capabilities or recommends products that seem pricey or not aligned with my expressed needs.
I have written about what shouldn’t happen in a financial advisory relationship. But knowing how things should proceed is equally useful. Recently, I spoke with Peter J. Creedon, CFP (Certified Financial Planner), ChFC (Chartered Financial Consultant), CLU (Chartered Life Underwriter), and founder/CEO of Crystal Brooks Advisors, a Registered Investment Advisor (RIA) in regard to common misperceptions about financial planning.
He dispelled common myths and explained how the planning process ought to proceed. Here are five myths and truths about financial planning and planners:
After you have defined your financial goals, you may want to figure out how to reach your goals. There are many variables and detours on the way to achieving your goals. But you may find basic financial calculations helpful in charting your course.
Start by identifying a dollar value for each goal; then determine how much you should set aside to reach this goal within a certain time frame. You can use Microsoft Excel or Google Sheets to perform these calculations. I’ll show you the basics.
Are you afraid of revealing your personal financial situation and being judged harshly by financial professionals, your parents, or other people in your social circle? If yes, then you are not alone.
According to a 2014 survey of 2,000+ U.S. adults commissioned by TradeKing Advisors, 57% of would-be investors say that the thought of speaking with a financial adviser in person (either in a face-to-face meeting or on the telephone) has stopped them from investing. Seventy-four percent of Millennials (ages 18-34) and 66% of Gen X (ages 35-44) have allowed fear to paralyze them.
Whether you are part of these generations or not, you don’t have to be afraid.
When I was younger, I was often told by financial professionals that I needed to set financial goals. I heard that I should first define my life ambitions. Next, I needed to marry my professional and personal aims with specific financial goals. Then I could plot my path to achieving my dreams.
However, when I was in my early twenties, I hadn’t yet gotten clarity on exactly how I might spend the next 30 to 50 years of my life. More than three decades after my first awkward conversation with a financial professional, I’ve learned that I am (relatively) normal.