So, you’ve either googled how to maximize finances, and our SEO worked, or you’re ready to ask the question, “How can a financial professional help me?” Either way you’ve found a good read.
Let’s pretend the person asking this question is named Bob and he happened to be talking with a Mr. Finance (Fin) about the question above.
Bob: Hey Fin! I’ve been working pretty hard lately, been paying off my debts, been earning cash back on my credit card, and put together some savings! I even track my spending on my phone, but I want to make sure I am doing everything I can to maximize my finances. How can a financial advisor help me do this?
Fin: Well Bob, I love your enthusiasm and appreciate the question. It sounds like you are off to a great start, but tell me, what else have you looked at trying so far?
Bob: Oh I’ve thought about getting a side job, or starting my own business, or going back to school, but I just don’t want to spend more of my effort away from the people and work I already enjoy, so what else can I do?
Fin: I think you've done a great job so far looking through your options. It sounds like you really enjoy your work and if you are alright with the income it provides; I would agree with keeping that work until something changes. It sounds to me like you are managing your finances responsibly, but you want to know how else to maximize your dollar, right?
Bob: well yeah, I guess that’s right.
Fin: Have you considered investing it? You may be at a point where your current income needs are taken care of and it's time to prepare for future ones. Investing is like putting your savings to work for your future self and family. Let me ask you this, does your workplace offer you any kind of retirement benefits?
Bob: Well I think they do, but I’m not even sure what they are, how would I find out?
Fin: Your HR department should know; it would definitely be worth finding out. Some companies even contribute or match employee contributions to a certain amount. I suggest making it a priority to find out what benefits your company offers and what it would take to maximize those benefits.
Bob: That sounds great, but I've also thought about starting my own company, what if I did that sometime in the near future, is there still a way to prepare for retirement on my own.
Fin: Yes, there is. If you decided venture out with your own company there are still plenty of options for different types of companies, and I can certainly help you prepare for these decisions, but before you think about that find out what benefits you have as an employee and we can then weigh which option could most benefit you.
Bob: Alright that sounds like a good plan, tell me more about investing. How do you help and what can you tell me about the different investments?
Fin: Well my primary job is to help people make wise investment decisions. I may show you investment ideas or help you think through the ones you bring to me, but I always aim to give advice based on what seems most beneficial to your values.
Bob: So working with you is like having experienced counsel for my investments, right? Helping me to maximize the ways and things I invest in?
Fin: That's about right,
Bob: So, what are some practical ways you help my investments?
Fin: Well investing is a lot like planting a seed. There is not much I can do to make it grow, but we can look at the fruit it came from and do our best to be aware of potential dangers to its growth. Similarly, I read the statistics, news reports, financial data, and other information that may have an impact on the investments value, and then offer advice on how to take advantage of what is known.
Bob: So, how do I know what to invest in and what to sell?
Fin: That’s also part of my job. As I compare the different kinds of investments, I am thinking for the timeline on each investment, the risks, and potential reward. As I find investments that may better suit your values and timeline, we will work to allocate your resources that way. There is however, one piece of investing that matters even more than charts and data.
Bob: What’s that?
Fin: You. Your goals, your values, your reason for investing, your willingness to accept risk, all of these things matter more than the investments I bring, in fact before you even open an account with me I would want to get to know more of your investment profile. There are all kinds of different investments and accounts that can benefit different investing purposes, and as an investment professional I want to offer you the advice that is most helpful.
Bob: Well that's great, what kinds of accounts are there?
Fin: There are Roth IRA’s that maximize compound interest and tax-free withdrawals, there are traditional IRA’s that give tax benefits now, there are trust accounts designed for estate planning, there are college savings accounts, business accounts, individual accounts and many different benefits for each.
I'll tell you what, why don't we find another time to connect after you've found out about the benefits your company offers, and we can start to put these financial pieces together?
Bob: That would be great!
And that ends our conversation. However, you don’t have to stop reading now. If you are like Bob want to learn more about how a financial professional can help, feel free to read on or send us your financial questions. If there is a topic that you'd like to learn more specifically about, let us know and we will write about or find a way to connect.
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