I can remember exactly where I was when I decided I needed to start my retirement savings. I was in college and reading a book that mentioned the failure that social security was and still is. Naturally, I panicked at the idea of not having any money to retire on and I wouldn’t be getting back the money I would be paying into a system through my taxes. I immediately called my dad. He reassured me that everything would be okay but if I wanted to ease that stress, I should start a Roth IRA. For those who are confused by how a Roth IRA differs from a 401K, Roth IRA’s are after-tax and 401K’s are pre-taxed. For a 401K, when you take the money out later, you get taxed on all of it. With a Roth, it has already been taxed. However, you do get penalized for touching both before you’re technically supposed to.

So, I went with my dad and met with his financial advisor. I wasn’t sure what to expect, but my financial advisor was very reassuring and excited that I was so young and wanting to begin investing. I was interested in learning the stock market and learning about mutual funds. In fact, I began going to lunches and dinners hosted by the company I invest through. There, I got to learn from J.P. Morgan experts about what the stocks are doing, what they are expected to do, and what mutual funds are doing well. I also learned the risk of the mutual funds and what levels of risk I should be investing in based on my age. So, without further adieu, here’s 6 things you need to know before getting a financial advisor. 

Saving for the future is imperative and financial advisors’ only job is to make sure that you are set for that time in your life.

They can help you budget across the board and even open up other accounts that allow you to invest and get your cash back when you need it. They are financial planners so they help you see what your spending habits are like and how they can be changed to make the most of their savings. Financial advisors keep your investments and savings on track.

Financial advisors do the stressing for you.

Now that I have an advisor, I don’t have to worry about how my investments are doing because I know I am set up to be “safe” and then I also have a general knowledge now about what to expect from the market. I have spent so much time in meetings about not overreacting to what the news is saying and what the markets seem to be doing. 

Financial advisors are more than people who help you invest your money.

Financial advisors help you with estate planning, tax planning, long-term care planning, and re-balancing your investments. They also come up with spending strategies that allow you to spend what you need but putting that extra money somewhere to grow and give you more money in the long run.

You don’t know as much as you think you do.

I can not stress enough that while you might think you know everything about financial planning, you don’t. Unless you are working directly in the stock markets and investment savings companies, then you are not as qualified as someone whose only job is to do these things.

There are so many options within the market.

There is no way you would know about whether or not you would want to invest in the US markets or European markets or maybe even Asian markets. Your financial advisor will guide you on those risks and make sure that you understand which markets are flourishing.

Financial advisors do not want you to fail nor do they want all of your money.

At 22, I was too young and too poor for my financial advisor to make any money off of me. In fact, I am still not rolling in money, nor is my financial advisor making much money from me now, but I can promise that your financial advisor is only looking out for you. I am going to be real with you, they probably already have a solid base of wealthy people that they are dealing with.

I hope you join me in getting an investor and starting to care more about your future.

Caroline C.
FFL Cabinet Member
Follow Caroline on Twitter!