Two weeks ago, I was in Washington DC speaking to a CEO roundtable. At the end of my talk, one of the participants said to me “I am sure you are worth every penny you charge, but I have been ripped off by a financial advisor and don’t know if I can ever trust another one. Do you have a case study on how to recover from a bad advisor?”
Great question. If you don’t want to be ripped off by an advisor or the financial system in general, you first have to start thinking about these things differently. Finding the right advisor is about personality, communication and knowing what you need. Do you need a wealth advisor to assist you in creating sustainable wealth? Or are you your own wealth advisor, and just looking for some special expertise in a narrow discipline?
Most of us are unknowingly looking for wealth advisors and hire specialty advisors. Let me explain.
Here’s a common scenario. I need tax advice, so I seek out a tax specialist, i.e. a CPA. My need for insurance is met by a specialist - my insurance agent. My new will is drafted by my legal specialist – my attorney. My investments are handled by another specialist – my stock broker. Question: Who is handling my wealth?
We treat all these facets of wealth management as separate…and they’re not. Creating sustainable wealth is most effectively done by beginning with the end in mind – the end being the freedom that comes with planning for a prosperous future.
If asked “Do you want to leave a legacy for your children?” your answer might be “Yes, absolutely.” But what if funding that legacy means you have to shave 10% off of your annual spending? Is that really what you want? The answer may still be ‘yes’, but without looking at the whole wealth picture, you would not have considered all the consequences to answering one narrowly focused question.
A good wealth advisor begins the process with a plan. He or she may call it a financial plan, a wealth plan, or in our case, The Prosperity Experience®. This plan is not a one-size-fits all; it must be tailored to meet the goals and intentions of the client. It includes a decision-making model that supports the person or couple in reaching their full wealth potential.
Specialty advisors like insurance agents, investment advisors and estate planning attorneys are brought in as needed to provide detailed expertise in a focused area. The wealth advisor may have these professionals in-house or they may be available via contract. Either way, the wealth advisor coordinates their work and uses the planning process with the client to facilitate decision making.
If you have been ripped off, there is nothing to do but get back on your horse and begin again, with the wisdom you gained from the experience. Take it slow. Trust your intuition. Do your homework. Find out who you are talking to.
Sustainable wealth creation is a lifelong process. While no single decision may change the trajectory of your wealth and prosperity, any single decision can. Don’t wait until you have made that one big, bad decision to begin again.
Mackey McNeill
Showing posts with label financial mistakes. Show all posts
Showing posts with label financial mistakes. Show all posts
Thursday, March 11, 2010
Friday, January 15, 2010
Four Money Mistakes You Can Learn From
Great article from www.360FinancialLiteracy.org
It's hard to know when the economy will truly recover, although there are signs that things are headed in the right direction. But if you want your own finances to stabilize over the long term, you'll need to evaluate what you've been doing right, and wrong. There's no magic bullet, but avoiding these four money mistakes may help you survive and ultimately thrive in any turbulent economy.
Mistake 1: Expecting things to stay the same
It's a familiar tale. Economic times were good. The stock market went up, up, up. Home values (and real estate prices) soared, credit was flowing, and the job market was robust. And then the bottom fell out.
At the heart of all economic bubbles is the euphoric, yet ultimately mistaken, idea that the good times are here to stay. And when the economic news is bad, it's just as easy to assume that the tough times will remain. But your own financial recovery will ultimately depend on you not jumping on any bandwagon. Instead, take a proactive, rather than reactive, approach to financial planning, no matter what economic news you're hearing. Prepare yourself for a variety of financial scenarios and avoid basing money decisions on emotion, or you may find yourself making the same financial mistakes over and over.
Mistake 2: Only saving your leftovers
Do you worry that you're not saving enough? Do you routinely rely on credit rather than cash to pay for the things you want or need? Rather than blame your financial inertia on your income, look a bit deeper, because the real culprit may be the lack of financial priorities. If you don't know exactly how you're spending your money and you haven't set financial goals, it's unlikely that you'll see much financial progress.
Go back to basics by preparing (or reviewing) your budget. If you tend to save only what you have left over every month, you can put yourself on a more disciplined course by having a fixed amount taken out of your paycheck automatically for retirement. Or, you can set up automatic transfers from your checking account to a savings or investment account.
Mistake 3: Not having an emergency fund
One of your savings priorities should be an emergency fund. An emergency fund isn't glamorous, but this underappreciated work horse really pulls its weight during hard times. Having cash on hand that you can use for an unexpected expense, or to pay bills if you lose your job or become disabled, is vital because it can help you avoid having to rely on credit or tap your retirement savings. Without emergency savings to fall back on, worse financial trouble may lie down the road.
Mistake 4: Not asking for help
Even if your finances are in good shape right now, you may be overdue for a checkup. A close look at your financial plan will help you identify potential strengths and weaknesses. If you're already in financial trouble, don't let fear or shame prevent you from asking for help. Facing financial problems early may help you make a full recovery. Many creditors are willing to work with you, but this may be much easier while your credit is still good, and while you still have time to turn things around.
The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions. For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor
It's hard to know when the economy will truly recover, although there are signs that things are headed in the right direction. But if you want your own finances to stabilize over the long term, you'll need to evaluate what you've been doing right, and wrong. There's no magic bullet, but avoiding these four money mistakes may help you survive and ultimately thrive in any turbulent economy.
Mistake 1: Expecting things to stay the same
It's a familiar tale. Economic times were good. The stock market went up, up, up. Home values (and real estate prices) soared, credit was flowing, and the job market was robust. And then the bottom fell out.
At the heart of all economic bubbles is the euphoric, yet ultimately mistaken, idea that the good times are here to stay. And when the economic news is bad, it's just as easy to assume that the tough times will remain. But your own financial recovery will ultimately depend on you not jumping on any bandwagon. Instead, take a proactive, rather than reactive, approach to financial planning, no matter what economic news you're hearing. Prepare yourself for a variety of financial scenarios and avoid basing money decisions on emotion, or you may find yourself making the same financial mistakes over and over.
Mistake 2: Only saving your leftovers
Do you worry that you're not saving enough? Do you routinely rely on credit rather than cash to pay for the things you want or need? Rather than blame your financial inertia on your income, look a bit deeper, because the real culprit may be the lack of financial priorities. If you don't know exactly how you're spending your money and you haven't set financial goals, it's unlikely that you'll see much financial progress.
Go back to basics by preparing (or reviewing) your budget. If you tend to save only what you have left over every month, you can put yourself on a more disciplined course by having a fixed amount taken out of your paycheck automatically for retirement. Or, you can set up automatic transfers from your checking account to a savings or investment account.
Mistake 3: Not having an emergency fund
One of your savings priorities should be an emergency fund. An emergency fund isn't glamorous, but this underappreciated work horse really pulls its weight during hard times. Having cash on hand that you can use for an unexpected expense, or to pay bills if you lose your job or become disabled, is vital because it can help you avoid having to rely on credit or tap your retirement savings. Without emergency savings to fall back on, worse financial trouble may lie down the road.
Mistake 4: Not asking for help
Even if your finances are in good shape right now, you may be overdue for a checkup. A close look at your financial plan will help you identify potential strengths and weaknesses. If you're already in financial trouble, don't let fear or shame prevent you from asking for help. Facing financial problems early may help you make a full recovery. Many creditors are willing to work with you, but this may be much easier while your credit is still good, and while you still have time to turn things around.
The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions. For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor
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