Ongoing personal financial planning can significantly pay off in several different ways. Industry research estimates that financial advice applied by professional financial planners can add up to as much as 10% to overall account growth over long term periods. Of course, this value does vary greatly, from person to person. For another thing, financial advice is just one component of sound financial planning.
A well-rounded approach to financial planning includes evaluating your own goals and long-term strategy, establishing a reasonable asset allocation for retirement savings, understanding your risk tolerance, identifying appropriate long-term investments, and learning how to effectively diversify your portfolio. In addition, you need to have clear rules for making and managing contributions to your 401(k) s and other individual retirement accounts. The type of investments you make is particularly important. You may want to consider investing in a conservative account, in which case you want to avoid putting money in high-risk ventures like risky stocks and bonds. In general, however, anyone can benefit from sound financial advice regarding their portfolio and individual investments. In particular, anyone with significant assets should consider what they could afford to lose by making poor investments.
By law, anyone over the age of 50 must take the time to prepare an investment portfolio that will meet their retirement needs. This legal requirement was put into place in order to help reduce the risk of a major investment losing its value during the years that follow. Individual retirement accounts, or IRAs, are excellent tools to help achieve these retirement goals. However, it’s important to understand that even with an IRA, you’ll still have to make investments, even if they’re not in an IRA account. When you include the costs of your daily grocery store groceries or even your water and electric bill in your overall budget for retirement planning, you may find that your IRA will be a bit short.
For this reason, it’s imperative that you get ongoing financial advice from someone who knows what they’re talking about. One of the best ways to do this is by hiring a financial advisor to help you create a solid portfolio and advise you on how to maintain it throughout your lifetime. From choosing which investments to include in your portfolio, to determining whether certain investments are worthwhile, to maintaining your overall investments in a good condition, your advisor can help you manage all of your money. In addition, your advisor can provide you with important guidance regarding the rules and regulations that govern retirement accounts and help you stay on the right track.
While you’ll pay fees to work with financial advisors, you’ll also save money in the long run. Because you have a single investment account that’s managed by a professional, you can be confident that your portfolio is in good hands. You can rest easy knowing that your money is being managed by someone who’s been trained to make sound investment decisions. Additionally, financial advisors can give you valuable advice about which investments to avoid and which ones are a good fit for your needs. They can also help you determine how much of your portfolio should be earmarked for each category of risk, how much should be invested in products that yield an income, and what kind of products and strategies you should use to minimize your risk.
Financial advisors offering FINANCIAL ADVICE may offer their services in a variety of ways. You can work with a company that offers a traditional fee-based IRA or you can go with a no-load IRA. No-load IRAs allow you to invest without having any of your principal balance in a traditional IRA account. You don’t have to pay taxes on this money as long as you keep most of it in the account and don’t contribute it to any other account. The no-load option is ideal for those who don’t need the advice of a broker but would still benefit from having a strong financial portfolio