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If you earn money and want to keep as much of it as possible, hiring additional people may seem counter intuitive. However, if that person is a financial planner, it may become one of the wisest investment choices you ever make. Yes, you need to pay someone a percentage of your earnings, but the results will mean you have more money in the long term… or at least have save more money.
The whole point of a financial planner is to help you plan your savings and investments and to point out ways to maximize finances. Growth is the goal anybody saving money, ideally you want more money than when you started or at least not have lost any money. Perhaps you are looking into the future of retirement and want a nice nest egg, or maybe you know in several years you want to buy a house.
A financial planner can help those goals become a reality. Yet most people completely avoid hiring a financial planner for personal finance because they think it is a waste of money. Even at the most basic level, a financial planner will help you understand your finances and how to make more of your disposable income.
Do you want more money for food, more money for your casino online budget, more money for shopping, more money for vacations? With a financial planner, you will be able to set aside money for you without compromising your other investments and/or debts.
It’s important to know what to expect when you hire a financial planner, which is why you should read on.
Finding the Right Planner
Firstly, it’s important to know there are two types of financial planners, specialists and generalists. Some planners will only perform in a specific area of finance, such as home budgeting or retirement plans. Others will be more general and help you handle your finances across a broader range of investment scenarios.
When looking for a financial planner, it is important you choose someone with who is a certified financial planner (CFP). This certificate shows the person you hire is properly trained and has some credibility. No, it does not guarantee quality, but it is a good start. It’s worth checking out the National Association of Personal Financial Advisors (NAPFA) if you are in the United States.
How to Pay a Financial Advisor
If you want the best value for your money, look for an advisor who works on a fee-only basis and not based on commission. When a planner uses a commission model it may be easier for them to entice you with added products knowing they will get a cut. At least with a fee-based pricing model you only pay based on performance. That said, advisors on a fee-only contract could still want to liquify assets to get more money. Needless to say, these are worst case scenarios and good advisors will always work with your best interests at the forefront of decision making.
It is also worth looking for an advisor who works by an hourly rate, at least when starting out.
