A lot of trust is placed in financial advisors. They are tasked with helping us manage our money properly to ensure we remain financially stable in the future. Because it is such an intimate relationship, it is important for each person to find the right financial advisor for them. Different financial advisors excel in different areas, so asking a few questions will help you determine their strengths and whether they are the right financial advisor for your current financial needs.
What Is The Financial Advisor’s Professional Designation?
Many people do not know that there are more than 100 different professional designations for financial advisors. Some professional designations, such as certified financial planner, chartered financial analyst and personal financial specialist, require a CPA credential, while others can be handed out to those with a minimal amount of education and related work experience. Do your research and make sure the advisor is qualified before handing over any of your hard-earned money.
What Services Does The Advisor Provide?
Are you looking for a full package of advising services, including investing and tax services, on a regular basis? Are you looking for someone that you can check with from time to time to ensure that your investments are on track? Both types of financial advisors are available, but they will each have very different requirements and strategies. Before choosing a financial advisor, make sure that the services they offer match up to the services you are interested in. Choosing wrong means that you will either be paying more that you should or be disappointed that the advisor is not doing more for you.
How Do Their Returns Match Up Against Benchmark Returns?
The comparison between the returns that a financial advisor gets and the returns of larger industry benchmarks can show you whether the advisor is providing good advice that will help you increase your wealth. While the stock market is unpredictable, trends can be spotted when comparing the results of a particular stock against the results of the wider industry. Financial advisors use these trends when choosing investments for their clients. If the advisors returns are consistently lower than the benchmarks, it means bad news for the value of your portfolio.
How Is The Financial Advisor Compensated?
There are several different ways that a financial advisor can be compensated. If the advisor has a transparent fee structure, it should be easy to see what you are paying for and how much you are paying for it. In most cases, there is no reason to pay a management fee of more than 1 percent of the total amount of assets being managed. If the fee structure provided to you is difficult to understand or the financial advisor cannot adequately explain how they are compensated, it is a sign that you should probably choose a different financial advisor.
While watching television over the past week, I was struck by how many commercials I saw advertising reverse mortgages to seniors. On just about every channel I watched, there was a commercial showing seniors how financially beneficial a reverse mortgage could be and generally glossing over any downsides to the transactions. To me, it seemed like an offer that was too good to be true. I was sure that there had to be some issues occurring with reverse mortgages that no one was talking about. After a bit of research, I discovered that I was right.
You Could Lose Your Home
A reverse mortgage is a type of loan that allows older homeowners to borrow against the accrued equity in their homes and use that money as income during their retirement years. According to the National Reverse Mortgage Lenders Association, more than 51,000 homeowners secured reverse mortgage loans from the Federal Housing Administration (FHA) in fiscal year 2014. Most of the commercials that I viewed for the reverse mortgages contained reassurances that the senior would be able to keep their home and that they would be able to live in their home as long as they liked. This was true…to a point.
Some seniors are at high risk of losing their homes after signing up for a reverse mortgage, often because they don’t have enough money to pay the homeowners insurance and property taxes for the home. The senior can also be in default on the loan if they fail to make necessary repairs in a timely manner. If the senior fails to meet all of the requirements of the loan, they must either pay back the loan amount immediately – which is unlikely if they are already facing financial difficulty – or they must give up the home to the lender.
You Could Outlive The Loan
Today, seniors are living longer than ever before, lengthening the amount of time that they need to stretch their retirement savings. A reverse mortgage looks like an easy, risk-free way of getting some additional money for your expenses during your retirement years, but the money is not guaranteed for the life of the homeowner. If the loan is obtained too early, then there won’t be any money left from the loan in the person’s later years, when they may need it the most. Worse, the home’s equity has been drained off by this point, leaving seniors with few options for continuing to fund their retirement.
The Fees and Interest On The Loans Are Substantial
Many people fail to understand that a reverse mortgage is a loan that has fees and interest rates associated with them to make money for the lender…just like every other loan in existence. The word “loan” is used sparingly in commercials for reverse mortgages because the companies don’t want you to think about how much you are going to pay for the reverse mortgage. They only want you to think about how much money you would get. Instead of a windfall, a reverse mortgage is more like a personal loan with your house as collateral if you, or your children, cannot pay back the loan in full.
Invoicing is a critical process for new businesses and particularly for new small businesses. Invoices may be the primary cash and income stream for a new or small business. Growth depends upon accurate and responsive invoicing processes. For the new business, it is often vital that they issue invoices when payments are due, and that customers respond and pay promptly. Business accounting software can reduce the commitment of time and resources needed to carry out the invoicing process. Business can automate many parts of account management and the reports that owners and managers need to oversee the company budget.
When considering how to invoice clients, many new companies use manual invoices. This time-consuming process relies upon paper records and standard mail processing. It consumes valuable company time and resources. When considering automated invoicing software, many new companies first turn to free personal finance software. These tools can work well for small scale applications but typically lack features that small businesses need.
Some free personal finance software have cash based processes payments and use cash basis accounting. These may not provide tools for accrual based accounting and many general ledger accounting functions. When using free personal finance software, new companies can realize savings of time and effort; however, the results are often unsatisfactory. Invoices are a critical part of customer relations.
Subscription invoicing is an important feature of advanced accounting software. Many online services rely upon repeat business and ongoing contracts. Some businesses have grown into large and successful enterprises with substantial income streams from recurring monthly or annual contracts. There are unique requirements for subscription invoicing such as service credits, partial periods of service, and adjustments for various events. Among the types of invoicing, subscription invoicing is particularly well-suited for electronic invoices. Corrections are an important feature of electronic invoicing and customer relations software. Paper invoicing requires many steps to issue an accurate or corrected invoice. Businesses can process electronic corrections in a matter of minutes. This feature boosts customer confidence and reduces confusion and errors in account management.
Electronic invoicing can use credit card options; customers will pay promptly more often and with greater ease when presented with familiar and trustworthy payment procedures. Customer relations management is a critical tool for growth. The invoice is an opportunity to reinforce the brand, put forward an impressive business image, and strengthen communications. The comprehensive approach contained in advanced small business accounting software goes far beyond the options offered by free personal finance software. Advanced Small business software like Sage.com accounting software uses electronic invoicing, prompt payment incentives, and constant access to cloud-based software and data. On page, payment is a valuable feature. Customers can respond instantly to E-mail invoices payable through links to familiar payment methods.
Invoicing is also important for financing business operations. Pending invoices and accounts receivable are assets for financing. Cash flow management is critical to nearly every business, and receivables financing is a useful method for maintaining financial balance and promoting growth. Accounts receivable and accounts receivable aging reports are functions that businesses can perform using advanced business accounting software.
Invoicing is an important tool for new businesses. Advanced software incorporates customer relations tools and takes advantage of the opportunity to improve customer relations and reinforce the company image. Customized invoices that include the business logo and a clear presentation of account information make a positive impression. Advanced small business software uses online methods for fast, accurate and convenient invoice processing. Using online, cloud-based systems like sage.com accounting software, business owners and managers can stay on top of accounts receivables and open invoices by accessing the system from any Internet connection.
Many of us lack the financial discipline we need to get a handle on our finances and begin making our money work for us instead of against us. The reasons for this are numerous. Very few high schools and colleges require students to take financial literacy classes prior to graduation. If you did not grow up in a family that made financial literacy a priority, there is a good chance that you are making mistakes with your finances because you have never been taught any differently.
Fortunately, a number of companies are beginning to recognize the scope of the issue and are creating easy-to-use money management apps that will help average people manage their money and take control of their finances. Apps are great to use for money management because you can carry them with you at all times on your smartphone and access them at your whim. Here are some of the best money management apps available today.
Mint is a great money management app for budgeting and tracking your spending. With this app, you link your bank accounts, credit accounts, and investment accounts into a single system that allows you to view all of the transactions that are occurring with your accounts. You can use the app to calculate and monitor your net worth, create a budget that automatically categorizes your transactions, and monitor your investments to ensure they continue to grow as you expect.
Level Money is another budgeting app that works a little differently than Mint. Once you have set your budgeting categories and amounts in the Level Money program, the program removes the amount of each transaction from the appropriate budget category and alerts you to how much money you have left in the category to spend. The app is advertised as a good way to help you remain in the black on your budget because you will always know how much you have left to spend.
Acorns is a good way to get started with investing when you do not have a lot of money to spare. The app takes the spare change from each of your transactions and invests it into an investment portfolio for you. You can also set a daily, weekly, or monthly amount to be transferred from your bank account into your Acorns account to be used to secure more investments for your portfolio. Acorns diversifies your portfolio for you to make investing as simple as possible.