Today, I would like to discuss three key players who are important to have in your corner when it comes to helping you with your financial affairs. I like to call them “Your Money Team”. They are a:
- Financial Advisor/Certified Financial Planner
- CPA/Tax Advisor
- Estate Planning Attorney
1 – A Financial Advisor/Planner: The term financial advisor can apply to a wide variety of professionals who hold various licenses. To complicate things, our industry uses all sorts of terms to describe advisors, including wealth managers, retirement planners, money managers, and investment managers, to name a few. This term can also apply to financial planners who have a special designation, like me, so that we can offer a more holistic approach to your financial life, such as debt reduction, insurance, and tax and retirement planning. Some of the services that advisors may offer, include investment guidance, portfolio management, and financial planning and advice. The basic idea is that this person can help you invest your money to help you pursue your financial goals. An advisor can also counsel you during difficult economic or personal, financial times, and set reasonable expectations so that you understand the risks you are taking, and what success looks like as well. An advisor can help you work towards avoiding financial mistakes, help you seek opportunities you may miss on your own, and help you stick to your plan in times of stress.
2 – A Certified Public Accountant (CPA): A CPA is an accountant who has earned a professional designation through education, experience, and licensing. These professionals can offer income tax planning and preparation for a range of clients including individuals and businesses. Many firms will also offer individual bookkeeping, business record keeping, and auditing. One important role that a CPA may play is that of a consultant. CPA’s research various ways to save individuals and businesses money, through tax planning, identifying problems in their businesses, and improving business operations. Hiring an accountant or tax advisor may be helpful in many situations, including but not limited to: being self employed, having multiple streams of income, if you are starting a new business venture, or if you owe back taxes.
3 – An Estate Planning Attorney: An estate planning attorney is a lawyer who can help you get your financial affairs in order to help you prepare for the end of life. It may sound morbid, but it’s one of the key components of having a sound financial plan. An estate planning attorney can draft your last will and testament, draft an individual or family trust, develop a plan to help individuals avoid estate taxes, and work to ensure that your assets go to your beneficiaries upon death. They can also prepare health care and power of attorney directives, which arrange for someone to take care of your affairs in the event that you become mentally incapacitated. Guardians can also be designated for minor children in the case of incapacitation or death.
Three Heads are Better than One
Even though you may not be ready to hire all, or even any of these professionals just yet, it’s still a good idea to have a basic knowledge set of what services they have to offer for when the time does come to put “Your Money Team” in place. Ideally, it’s also a good idea to have these professionals communicate with you, and each other, so that everyone is on the same page regarding your personal, financial situation. It’s like the old saying goes, “Two heads are better than one.” Or in this case…THREE!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.