How Much do You Really Need a Financial Adviser?

No matter how old you are and how many years you have worked, this is a question that always comes up - do you need a financial advisor? There is no simple answer to this question. In fact, many experts in this field cannot agree on a common answer. Like most things related to the stock market it comes down to how much risk you're willing to tolerate. If you look at the historical data, very few financial advisors or financial analysts have with any degree of accuracy predicted these huge market crashes. Yet most of us not in the financial sector have even a harder time predicting trends of growth and income. I was busy myself with taking online classes in project managementfrom one of the best colleges online, so I needed financial advise.

So you have to ask yourself, “am I comfortable with what I am doing with my money” and what “am I doing to prepare for my family's financial security?” As I said earlier it comes down to your risk tolerance. The case can be made for the use of financial advisors. For example, these are professionals that have had extensive training in this field. They know how sophisticated instruments like exchange traded funds for example, operate. They also have been trained to read and understand large company's financial records. At the same time, their advice does not come cheap. Many financial advisors charge anywhere from $200-$400 per hour. And if you go to very well reputed managers or advisors, they can charge upwards of $5000-$10,000 for a meeting. Depending on who you talk to, this is a small price to pay. If you want someone to actively manage your investments, they can charge you 1 to 2% of the value of your portfolio. All these expenses can start to add up pretty quickly.

One could make the argument that if they were so good, why were they unable to predict the market crashes and protect everyone's investments? The answer to this question is rather simple actually-they make better educated guesses than someone who's not trained in this area. Also, remember that they will get paid no matter how your portfolio does! Also, they can only advise you on how you can protect yourself and your family financially in the future; in other words by no means can they guarantee that if you follow their advice that you will be on a much better place financially. Like most experts you're more likely to benefit from listening to them than not.  

So, getting back to the question of do you really need a financial advisor, the answer is very simple. Are you comfortable with how your money is invested and growing; if yes, then you don't need one. If you think you are overwhelmed and could use the advice of an expert then absolutely yes. Good luck with your investments! 

Personal Finance - Restraint Today, Freedom Tomorrow

So you enjoyed living in your mom's basement. While you were there, you earned a world class education getting an MBA from the best online university in USA. You have worked just as hard in looking for a job and found that foot in the door at a start-up. Congratulations! In many ways your life begins now.

These are exciting times. Now that you have great deal of freedom and a steady paycheck it also is a very dangerous time and a time for caution. You have lived responsibly while living with your parents because you were spending their money. Now that you no longer have that obstacle, an easy tendency would be to start your free-spending ways. What you do over the next few years could impact your next few decades.

Let's review some of your financial responsibilities. As the saying goes "life comes at you fast" so you need to be prepared at any given time. Things you need to save for, in that specific order are

·         Saving for your immediate needs also known as an emergency fund

·         Saving for a house and family

·         Saving for retirement

Let's take a look at each one in detail.

Saving for an emergency: How often have you been able to predict your monthly expenses? It is nearly impossible to predict where the next big expense will come from. For starters if you move into an apartment you are going to need furniture. Next month it could be your car tires or the cell phone you accidentally dropped in the toilet. These are bound to happen at one time or another. We're not even talking about the serious stuff like missing work due to illness or an accident. Now creating an emergency fund will result in your depending on credit and credit cards. If you start early with credit cards you will never recover from them. So when the going is good set up an emergency fund.

Saving for a house and family: Eventually your bachelor days will be behind you. You will meet someone you really want to settle down with. It might be the girl you’ve been chatting with online – you know, the one completing one of the top accredited online nursing programs. Given how expensive homes will be by the time you get ready to buy a house, you should start saving now.

Saving for retirement:  While this seems like a millennium away, you should start now. Hopefully your career will grow with you and you will be retiring having achieved all your career goals. If you want to maintain that lifestyle without an income, you have to start saving now. So live by the motto - save today, enjoy tomorrow!