Regardless of your income level, if you are planning for your future, you should not procrastinate. Many of us are more focused on maintaining financial stability than planning ahead. But, even if you are living from pay check to pay check, the benefits of a financial plan cannot be overlooked. Simply creating a budget will help you to determine how to decrease your expenses, so as to stabilize your finances. Financial planning for the average investor is possible.
What is Financial Planning?
When you take the necessary steps to prepare for your life goals, by creating a plan that allows you to properly manage your finances, you have begun your financial planning. Life goals can include such things as buying your first home, saving for college, and planning for your eventual retirement.
The first step is generally to gather information about your finances so you can determine your current financial status. After you have set your life goals, you can prepare a financial strategy to meet those goals. Once your plan has been implemented, it is important to review it periodically, to ensure that your goals are still being met.
Financial planning is not just for the wealthy
Many people see financial planning as something reserved for the rich. It is true that the more money someone has, the more complicated their finances probably are. So, it is easy to believe that only those with complicated finances need planning assistance. However, even if you do not have a six figure salary, or hundreds of thousands of dollars saved up, you still need assistance in planning for your financial future. The only problem is that some financial advisors impose ever-increasing minimum asset requirements, which leaves the average investor without any resource. The good news is your estate planning attorney may be able to help you with some aspects of your financial planning as well.
Alternatives to independent financial advisers
Even when independent financial advisers do not have asset minimums, they still may refuse to take on smaller accounts, because the paperwork required by the government and other agencies makes dealing with small accounts cost prohibitive. This means that banks, insurance companies and mutual funds are often left to serve the smaller financial market. However, their “free” advice is often just a clever sales pitch for a CD, annuity or other investment. Unfortunately, if you reach a call center, staffed by counselors working on commission, you are likely to never get the same counselor, or the same advice, twice.
What type of advice does the average investor need?
Considering the fact that the middle class has been hit harder by job loss and more costly benefits, the advice needed by middle class families is much different from what affluent families may need. The middle class needs to do more than just determine how to save for retirement, they also need debt management and cash flow management advice. For example, a young couple may be considering buying their first home, but they have substantial debt already. An estate planning attorney can help them recognize the necessary trade-offs often required in life, and help or refer them to a resource to focus on not only spending and saving, but also investing.
If you have questions regarding investment advice, or any other financial planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
Gerald M. Dorn, Estate Planning Attorney
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