Become A Financial Planner And Help Others

If you’re a high school student about to graduate, you’re probably wondering what exactly should you do with the rest of your life. At least you’ll be asking yourself what kind of work you’d like to do. You’ll look into different occupations and seek those that promise to give the greatest play to your skills, abilities, potentialities, and that holds out the prospects of good money and continued advancement. If you’re the right kind of young person, if you have the right motivations and have done your school work, you might decide to become a financial planner.

How does someone become a financial planner? What motivates them; what do they have to do, what studies should they pursue, to be a financial planner. Is the payback attractive? What other rewards besides monetary can you expect if you become a financial planner?

You are sure to be told by your counselor that you will be happiest doing what you do best. This piece of ancient Greek wisdom, Plato the source, was insightful when it was stated then, and it is still valid for most of us today. Do you enjoy working with money, numbers, planning? Are you successful at your own financial planning? Do you get a thrill when your plans come together, when the goal has been reached and the hoped for and expected actually occurs? Do you get along with people, like them, derive a sense of meaning as you help them along their own paths to fulfillment? If you can answer all these questions in the affirmative, you probably have what it takes to become a financial planner.

There are various kinds of financial planners, and those who enjoy working with individuals will probably gravitate towards personal financial planning. Such people may work for large corporations, but more often they open their own business and carry out their business as a single person consultant. They may have their own offices, even their own administrative staff. Those who get the right kind of clients, clients with money or money-making potential, are often located in the central business district of the city the work from. They may make millions (2% of managed assets in some cases), or they may make enough to live a comfortable life; they do enter this profession, after all, to make money. If you become a financial planner, and you’re good at it, you’re bound to make a fairly good living as you help others to make the most of their income. The financial rewards for you are promising indeed!

As a financial planner, you’ll help other people with a moderate to high income put their money to work for their greater enrichment, and you will devise plans, given your client’s resources and potentials, to make their money earn more money to finance their goals and dreams. You’ll have to know economics, business, finance. Getting a degree in any of these fields will lay the necessary foundation for you to become a financial planner, and you’ll have a degree you can display on your office wall like a doctor, one that assures your future clients of your competence. You’ll learn about investments, insurance, taxes, risk management, retirement planning, estate planing, education funding, all personal financial concerns. You can go on to become a certified financial planner by taking examinations from competent authorities.

Being a personal financial planner offers many rewards besides money. For many planners, helping families realize their dreams is the greatest of all rewards. Through your knowledge, experience, and art, you can be instrumental in helping others realize the meaning, the purpose, of these lives.

Pointers For Qualifying For Financial Aid for College

Qualifying for financial aid for college for your toddlers is all about bringing in a long-term savings plan. Your first order of business here would be to rope in your parents. Sure it can get a little awkward sitting your parents down and asking them if they would mind making a real cash contribution to their grandchild’s future; but would you believe it – surveys have shown that most grandparents are more than willing to set aside a little fund for their grandchild’s education; it’s the parents who are really too embarrassed to ask – or to even accept an offer made. So if you are a grandparent, understand that usually, it falls to you to bring the whole subject up. Just imagine – contributing just one Social Security check every year for 15 years should take care of about half your grandchild’s college education costs. If you open a 529 account for your grandchild, it could even keep the money safe and growing. You could take the money back in the event of an emergency, and if you happen to change your mind about which grandkid to help, you could even change the name of the beneficiary midway.

For parents however, this may not be the best idea if you are thinking of applying for financial aid for college for your children; having a grandparent with a 529 may net you a smaller grant. Did you know that if you have two children close together, and they go to college at about the same time, you have a better chance of getting a fat chunk of financial aid for college right away? Spacing children apart isn’t really a great idea when it comes to getting a grant.

Colleges and universities, when they try to figure out what you are able to pay for your child’s first year in college, usually do the counting starting from New Year’s Day, to the last day of the year. That’s their base year. If you need to make any changes to your plans to try to qualify for more financial aid for college, make sure you do it before December 31 of the Junior year.

The people who determine the level of financial aid for college you qualify for, usually try to total up all your assets to see what you can afford. So make sure that you don’t make any major new purchases after the base year begins. And make sure that you have no outstanding credit card debt either – it doesn’t look good on your resume. But whatever you do, make sure that their untruths are on your FAFSA form.

When you apply to new College, make sure that you’re trying for colleges that actually have the money to grant students financial aid for college. Remember, whatever the financial aid officer decides is final. And they have their own calculus. They’ll try to sweeten the deal for students that are a better fit for their college. Just remember one thing though – when it comes to preparing for your child’s college education, starting early is everything.

Your 401K Plan – Can You Bank On It?

Although often touted as a retirement firewall, the 401K plan has come under recent attack by many financial pundits as a pie-in-the-sky dream, founded on a dodge, finally exposed by our financial crisis for the miserable fraud that it always was. This is alarming for the millions of baby-boomers who have been trusting in deriving at least 4 percent of their yearly retirement income from their 401Ks. Is this just more fear-mongering, or is there really something to it?

The reason for this hostility is obvious enough, according to a recent Time magazine article. Whatever money you put into your 401K ten years ago, take about 25 percent from that and that’s what your 401K is worth today. You would have done better to put your savings into a savings account (at least they’re insured), or stuff your mattress with the cash. If the 401K plan is such a disaster, why do financial planners, whose job it is to devise a portfolio of holdings that they claim will keep a retiree in the black for 30 years, still advise their clients to count on this leaking bag?

It seemed smart enough when it first came out in the early 80s. It was named after the section of the tax code that permitted it. You pay into it by automatic deductions from your pay. You never get your hands on the money, so you can’t spend it. It wasn’t as though you couldn’t drop it if you wanted. If your financial condition required it, you could suspend it any time you wanted – it was your call.

I can save my own money, you might say, but there’s more to the 401K plan than forcing discipline on you. It’s better than a savings account because your company matches what you contribute. Most employers liked it better than their pension plans, which always reduced their bottom line. Most dropped those plans and took up with the 401K system instead. Unlike company pension plans, if you left the company, the money in it was all yours. Best of all, it couldn’t be taxed. The IRS does get some in the end, a levy they call it, a tolerable percentage. Your net income doesn’t include your contributions, so you’re being taxed for less than what you actually make. It was conceived as a well paid executive’s benefit, but it quickly became available to anyone who could stand to have a meaningful amount withheld from each paycheck.

That’s not as bad as you might have first thought. Yes, the National Bureau of Economic Research predicted that an average 401K plan, over the life of a career,  would provide about 50 percent of retirement income, but the truth is that today’s retirees can expect their plan to render a mere 8 percent. The reasons for this poor return mainly falls on the participant. Most didn’t contribute enough to hold the amount needed to cover 50 percent of their retirement. Poor investments in other financial vehicles required the participants to cash in early. Other investments are critical to cover the other percentage of retirement income the plan doesn’t cover. The recent crash has wiped out many of these investments, causing the retiree to draw more from their 401K than they expected. The problem, then, is not that the 401K with employer contributions won’t result in the expected savings. The problem is that other investments may well cause you to use more of your 401K savings earlier than expected in your retirement.

Yes, the 401K plan still has the potential to support a retiree in the future, that is, if enough is contributed. Raising your contribution will at least assure you that there is more to draw on when all else fails. Other schemes are being proposed, but the 401K still has a life and can still provide the income to future retirees when they’re in their golden years.

Car Price – Consider All The Costs Of Ownership

When you contemplate buying a new car, you need to factor in not just what you put down upfront and  fork over in your monthly payments. The cost of ownership is also what you spend on insurance, parking, car care and of course gas. And it wouldn’t be a bad idea to include in the price of the car the sense of loss you’d feel not spending the money you spend on the car on something you really care about. When you sit down and try to figure out how to buy a car, your notes should include more than just the research you put in to determine mileage, and the test ride you take. Look at it this way: if you’re 25 and the car price you’re willing to work with is $30,000, what if you lowered your expectations and bought one that cost $20,000 instead? If you decide to save the difference in a Roth Individual Retirement Account, you should probably have an extra $150,000 the day you retire.

Here are a few things for your consideration for when you decide to buy a car:

1. If you are not paying a car payment every month now, think about what it’ll be like when your income takes a $500 hit. You could test drive this by trying to live on $500 less for a couple of months to see how it works out.

2. Try not to roll over the loan you owe on your existing car over into the loan package for your new car. You won’t be paying the same old interest on the old loan that you always did. A rolled over car finance plan doesn’t have the collateral of the car for the lenders to feel secure over. You pay very high rates.

3. Make sure that you can obtain a loan at their interest rates. If you have poor credit, what you pay for your car loan could be so high as to be not worth it. Make sure that the car you buy isn’t going to cost you in expensive running costs every day – special gas, special tires and so on. As a rule, taking out more than a fifth of your household income to spend on car payments and maintenance is a bad idea. Next to the family home we buy, spending on buying and maintaining a car are about the most draining expenses we ever experience. Keeping it down here would make a real difference.

4. Car loans have become so much more expensive now than before – for people with less than ideal credit. You could put off buying a car for a few months and use the time to work on your credit rating.

5. It’s a fact of life – new cars are much-hyped, and the car price you pay for themwill be inflated too. It pays to wait. As wonderful as the new VW Beetle is, what would it be like if you had gone out and bought it at the premium they charged for it back then? You need to make sure you’re not doing something like that picking an in-demand car.

6. Try to find out if you can get financing somewhere other than at the dealership. If you walk in with the financing taken care of elsewhere, it can give you a great deal of leverage over working down the car price quoted to you. All put together, the payments you make under par over the years easily add up to about twice the original car price. Anything you can do to help cure can go a long way.

And finally, as you consider the car price you are willing to pay, try to see how you can make it go on regular fuel, and not premium. Buying the cheapest that will allow your car to run without knocking, is proven to be good enough. And when you do fill it up, do it at a gas pump that charges the least. There are Internet sites like GasPriceWatch.com that’ll send you text messages about where the cheapest gas goes in your neighborhood. Typically, driving over to a less pleasant neighborhood usually gets you cheaper gas. It’s priced for the neighborhood.

Certified Financial Planner – What To Look For

If you’re going to put your future into the hands of a financial planner, put it into the hands of a certified financial planner

You’re whole future is at stake when you’re planning what you will do with the money you earn. You work hard for that money; you work around the clock, even though it appears you’re relaxing. You have only so much time to earn, yet your hopes will require more money than you can earn in the time you have. You’ve heard that money can make money: the stock markets, bonds, insurance, business investments. That’s what you want to do, make your money work for you, earn what you simply don’t have the hours in your life to earn. You’re not a financial wizard; you know your work, but you don’t know finance. There are others who do, and you’ve heard the smartest option you have is to consult one of these experts in personal finance, a financial planner.

What! Put your money into the hands of another, you say? That sounds like some pretty risky business. What assurances do I have that this planner isn’t a rip-off? Yes, you can check the planner’s references. Others may attest to the quality of the planner’s work, but don’t forget how, recently, billions were invested by trusting investors in a man who was a financial giant, investments that went into a Ponzi scheme with little or nothing gained for the trusting investors. Reputation is a good indication a financial planner is worth his salt, but if you want more, want to know that this planner has everything at his fingertips, you’ll require that the planner you choose be a certified financial planner.

Stories abound of planners who planned only for their own profit, but little or nothing for their client. You also hear how others trusted a financial planner, put their cash into his hands, only to find that the plan didn’t work. It wasn’t that the planner was dishonest; the planner simply didn’t know financial planning. Among these incompetent planners, it is unlikely that any of them was a certified financial planner. To be a certified financial planner, they would have had to pass a careful scrutiny of their education, knowledge, and experience by a recognized certifying organization in order to hold the certificate. That’s the purpose of certifying someone as a financial planner – to validate that person as someone competent in the field.

Before you settle on your financial advisor, ask to see his certification. In the United States, one of the well-honored certifying authorities is the International Board of Standards and Practices for Certified Financial Planners, Inc., (IBCFP). This non-profit organization issues its trademark CERTIFIED FINANCIAL PLANNER’s certificate, which it has issued since 1985. Located in Washington, D.C., the CFP board issues certificates to those who pass a rigid set of requirements in education, knowledge, and ethical behavior. Examinations qualify the recipients, and these are not easy. You can rest assured, if your certified financial planner has one of these certificates, he is a competent one.

Another trustworthy certification for financial advisors is the internationally recognized Registered Financial Planning Institute, which issues a Registered Financial Planners certificate to qualifying individuals. If your prospective planner has such a certificate, you can depend on him being competent in the field.

As well as being a certified financial planner, your planner may also have other licenses and certificates, such as in investments, real estate, insurance, that further qualify him. Ask to see all his certificates before you commit. You can never be too sure when it comes to your financial future. Trust is fine, but verify.