When Should You Hire a Financial Planner

Old CoupleYour financial security is important.

To you. Your spouse. Your family.

But trusting a stranger with your hard-earned savings is challenging. How should you choose?

First, let’s ask when you should hire a financial planner? Your first job? Out of college. Once you saved a little nest egg?

There are five signs, according U.S. News & World Report, that you need a financial planner:

  1. Uncle Sam sends you a tax refund check every year,
  2. You already are investing your money, but you have no idea how much it is costing you annually,
  3. Everything is going great when the bulls are raging down Wall Street, but you don’t have the expertise or strategy to survive a bear market.
  4. You are saving money every year, but you don’t know if you are saving enough to meet your retirement goals.
  5. You have a spouse, four kids and two dogs, but you have never set up a plan to keep them financially safe should you die.

These are five good signs to spur you to investigate hiring a financial planner. In reality, once you are out in the workforce on your own, you should meet with a financial planner and set goals. The younger you are when you develop a financial plan the better you will be.

Take a 21-year-old who invests $2,000 for nine years at 10 percent interest. By age 65, that $18,000 will be worth $736,000. However, if you wait until age 30 to start saving $2,000 a year every year until age 65 ($70,000), you will only have $542,000.

You will lose $220,000 compared to starting at age 21.

That is the power of compound interest.

It is better to work with financial planner when you are young, but whatever age you are you should find one you trust with a good track record.

What separates financial planners from other financial planners? There are many different types, but which one is best for you:

  • Certified Financial Planners
  • Certified Public Accountants
  • Enrolled Agent
  • Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC)
  • Certified Fund Specialist (CFS) and Chartered Mutual Fund Counselor (CMFC)

You should begin with a Certified FInancial Planner who gave look at all your financial needs and develop a plan to meet them. CFPs  have the most rounded financial education plus they need to have at least three years of job experience in the financial planning industry before they take the CFP board exam which covers financial issues such as insurance, retirement, estate planning and investing. The CFP test is 10 hour.

If you need someone to do your taxes,  a CPA has more rigorous training, but an Enrolled Agent also can do the job and cost less. A Chartered Financial Analyst is good if you want to set up a hedge fund, but most people don’t go that rout.

The CLU and ChFC are good choices if you need life insurance, estate planning and other financial issues, but they don’t have to take rigorous board exams for their certification.

What separates us from other financial planners?.

How Can I Save $200 a Month for My Retirement

I am 59 and lost most of my retirement to my bankruptcy.

I know $200 a month in savings will not pay for my retirement, but I have six years until I can collect my Social Security check, and I have to at least build a good emergency fund.

Usually, most Certified Financial Planners will recommend to have enough money in a liquid account that will cover your expenses for six to 12 months if you lost your job or, for whatever reason, could not earn income for an extended period of time.

So, how much money will I have after six years of saving $200 a month. Obviously, I will have at least $2,400 times seven years. That comes to $14,400. But what about interest. If U average 6 percent interest a year my $14,400 will total significantly more.

I could put the money into a Roth IRA, which would allow me to withdraw the principal tax-free when I turn 59 ½, which is in about nine months. The contributions to the  Roth IRA, however, are not tax deductible. That’s OK for now.

But the question most people have is how can I save $200 a month.

One easy way is to have the money automatically withdrawn from every paycheck. If you get paid twice a month, you could have $100 sent to your Roth IRA every time you get paid. Out of sight, out of mind. Or, if it isn’t my checking account it won’t get spent.

Here are other ways you can start saving $200 a month:

  • Deep-six your cable subscription. Do you really need 100s, if not 1,000s of channels. Instead, watch all your favorite shows online. You can even stream it from your tablet or laptop to your TV set. You can save from $50 to $80 a month.
  • Do you really need Netflix, Hulu and Amazon Prime? Save another $9 a month.
  • Do you regularly eat lunch out during the workweek? Start packing your own meal. You can save $30+ a week, depending on where you were eating..

How is that so far? You already have saved $90 to $129 a month.  Here are other things you can do:

  • Check out your car insurance. I was with one company for 30+ years but when my monthly bill came to $125 a month, I started comparison shopping. I saved almost $40 a month by switching to another company..
  • If you are a major movie goer like I am you can save a lot of money by choosing when you go to the theater. Yes, you can save a lot more just watching all the movies on Netflix or Hulu, but I don’t enjoy movies online. That’s why I go often to the movies at the theaters. Since just the tickets are about $11 each, I can save $5 if I go on value Tuesday or save $9 if I wait until the movie reaches the $2 movie house. In my city, I also belong to the film society, which operates both a mainstream movie theater with first-run films, and the independent art house. My membership cost $50 a year. You get two free passes plus one or two bags of popcorn for free. And the movies only cost $5 each. Plus, their concession food is much cheaper than the chains. One last trick, go to the 10 or 11 a.m.showing. It usually costs about $6 at certain movie theaters. If I save $5 every time I go to the movies, I will save at least $60 a month. Sometimes less, sometimes more. (Sneak in food and you save even more.)

Now with the $40 from the car insurance and the $60 from carefully choosing when I go to the movies and where, I have saved an additional $100 a month.

I haven’t scratched the surface on ways to save money, and I am right $200 a month. Take a deep look at what you are spending money on. Set priorities and cut the fat.

Understanding the U.S. Stock Market

Buy high, sell low!

Words to live by if you are going to invest in the stock market. Of course, it is easier to preach this philosophy than it is to actually accomplish it.

One way to do this is to time the market. Know when to sell off at the peak and get back in at the valley. If you try this strategy, you will undoubtedly read articles about how if you miss the five highest days in the market you will be worse off than if you stayed in the market.

Has anyone really been able to time the market? I doubt it. Even if you find someone who warned that the bubble was going to pop, chances are five years later they blew the next call.

Did anyone really see the China bubble in August 2015? You would think there were warning signs. When I asked a stock broker if his company warned its clients to get out before the wild ride when the DOW dropped by more than 10 percent, the financial professional said: “We recommend to our clients that they stay in the market for the long haul.”

That is kind of a self-serving strategy because it absolves the financial broker from any responsibility when stocks nose dives.

I found an article in Barrons from February 2015 entitled, appropriately enough, “Considering the Stock Market Crash of 2016.”

John Kimelman was writing about Paul B. Farrell’s article, “Stock Market Crash of 2016: The Countdown Begins.”

Did Farrell get it wrong? The market crashed, but it was more of a major correction — more than 10 percent decline — than the 50 percent devastating crashes he warned that was coming in 2016.

Or is this just a prelude to Farrell being right. Are we going to relive the stock market implosion of 2008?

“Farrell writes that investors are in a state of denial about how bad things can get. But today’s investors aren’t behaving as bullishly as their counterparts in 2000 and 2007, two recent market tops. Also, it’s hard to imagine what catalyst may emerge in the next year that could be as terrible for stock values as the bursting of a tech bubble or a financial crisis brought about by an overinflated housing market,” according to Kimelman.

What are you to do then? Who do you listen to?

Kimelman suggests taking the approach preached by CNNMoney’s Matt Egan who writes about the “dangers of pulling money out of the stock market” if you think a crash will occur: “For example, people who invested $1,000 in the S&P 500 at the beginning of 2008 and again at the start [of] 2009 were back in positive territory by the end of 2009, according to a new analysis by financial technology firm CircleBlack.”

I faced that dilemma last when when my stock portfolio lost about $5,000 of its value. I had not pulled it out — I did not get the warning about China’s economic crisis. I have made the conscious decision to stay invested and wait for the market to grow again.

Probably a year or two from now the market will recover. If I can, I will invest more money in the market now while it is down and, perhaps, when it climbs back to 18,000+ I will  be ahead of the game.

I could use some help in make my financial decision because my options are limited.

Howard Gold, who wrote “What Should I do with My Money Now?” on MarketWatch.com, agrees.

“Bank deposits and money market funds are paying zero or even negative real returns. Yields on Treasuries are laughable and rates on investment-grade corporate bonds have plummeted, as have those of high-yield bonds.

“Commodities, except for agricultural-based ones, have languished. All the “alternative” asset classes that supposedly offer diversification — like real estate investment trusts — have moved up sharply with stocks. Gold and silver have underperformed boring old U.S. stocks for nearly the last year. So have once-torrid emerging markets.”

It is so confusing.

That is why as an individual investor you should not look for a financial Houdini, but you should take advantage of a certified financial planner who can explain all the options available.

The Wall Street Journal points out that a certified financial planner, who is not receiving commissions by pushing a product, can be of value to the individual investor.

“Financial planners can also help you remain disciplined about your financial strategies. They’ll make the moves for you or badger you until you make them yourself. Procrastination can cause all sorts of money problems or unrealized potential, so it pays to have someone riding you to stay on track.
“We’re not suggesting that you ignore personal finance and turn over all your concerns to an adviser. But even if you know the basics, it’s a comfort to know that you have someone keeping watch over your money.”

Sales Prospecting Tips

image credit:  flickr - 76029035@N02_sm

image credit: flickr user – 76029035@N02_sm

Generating leads is one of the main challenges for most sales professionals. You may also find it difficult to get quality leads to meet your sales objectives. The good news is that there are certain tips that you can use to generate these leads.

Schedule Prospecting

The first thing you should do is to set aside a particular time for getting prospects every day. This time should be clearly marked on your calendar. You have to spend a considerable amount of time prospecting. It is not always easy and fun to prospect, making it necessary to book a specific period. This will remind you that prospecting should be a regular activity.

Identify Target Market

Once you have set aside time for prospecting, the next step is to identify and focus on a particular target market. There are different types of industries, people, and companies that you can approach. But you will only get quality leads if you narrow down your focus. Determine the ideal customer and come up with profiles. Use your customer database to identify a target market. The market that you select has to be profitable. Once you have a profile, you can identify specific businesses and individuals that match your criteria. This will allow you to focus on prospects that are more likely to offer you business.

Work Call Lists

You have to work your call lists to get prospects. Determine the most important leads and call them. This gives you an opportunity to determine if they have made a decision about the product or service. When you call the people on your list, address any concerns that they may have. Some of them may require additional information before they can make a decision. If you are hosting an event to promote your services or products, invite the individuals and companies. Call them regularly. You are more likely to make a sale if you keep in touch because they are aware of your existence. Work your lists consistently to allow you turn the warm leads into hot ones.

Get Referrals

Ask your satisfied customers for referrals. Happy customers can help you make more sales when they inform their networks about your services and products. It is advisable to ask for referrals when you have just made a sale. This works to your advantage because the customer is more likely to give references when they have just gone through a satisfactory purchase experience. The customer will be excited and enthusiastic after the sale, making it easy for you to get a referral.

It is also advisable to stay in touch with existing customers. This allows you to determine their experience with the product or service. A good way to do this is by sending them birthday greetings. You can also share valuable information and invite them to events they are likely to be interested in.

 Take Advantage of Social Media

Sales professionals are now recognizing the value of social media when it comes to prospecting. You need to have a presence on social media if you want to get leads. Social media networks allow you to access billions of people. It would be difficult to reach this large number of people with other forms of media. Create profiles on various social media networks that you can use to get new customers. If you are targeting companies LinkedIn is a great choice. But if you are targeting individuals, Facebook is a better option. You have to identify where your potential clients are likely to be. It is important to remember that being present on social media networks is a great way to complement your other prospecting strategies but it should not replace them.

 Send Appropriate Content

The content that you send to your prospects has to be stimulating, appealing, and valuable. Lead generation fails when you do not do this. You have to offer value to your potential customers. The content should show them that you understand their concerns. It has to include motivation and ideas that will encourage them to make a purchase.

Follow Up

It is not always possible to make a sale during your initial contact with a customer. You have to keep following up to get the sale. This means making calls, sending emails, and setting up meetings with them.

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