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Financial Planning 101

Oct 24, 2019

We all encounter financial questions as we go through life, and when that happens, it’s often best to pick up a phone and call an expert. But sometimes it’s hard to know exactly what questions to ask. And many people are unfamiliar with what a financial advisor really is. If you’re one of those people, don’t worry! You are not alone. To get you started on your journey toward financial health, we’re going to tackle some of these questions here.

Investment advisor. Financial advisor. Financial planner. Wealth manager. These terms are often used interchangeably, but do they actually mean anything different? The answer is, basically, no. We are all financial planners by trade. By definition, a financial planner is a qualified investment professional who helps individuals and corporations meet their long-term financial objectives. That means a financial planner starts with a list of the client’s assets and expenses, and determines what the client hopes to accomplish in the future.

Depending on what the client is looking for, a good financial planner can assist with all aspects of future income. We help with investments, 401(k)s, life insurance, business exit strategies, and much more. We help you manage all aspects of your money that affect your future. Clients pay financial planners to guide them toward what is best for them and their desired portfolio.

A very common misconception is that you have to be enormously wealthy or already possess a huge lump sum to invest in the stock market. But whether you have a great deal of money to invest is actually not the primary consideration—the more fundamental issue is deciding what you are going to do with the money you currently have.

A financial planner’s goal is to come up with a plan that harmonizes with the client’s life. That plan is—and should be—very personal. It will depend on things like whether you are married and whether you have kids or other dependents. Do you have a benefit plan or a 401(k)? An IRA? Any form of income that doesn’t come from your 9–5 job? Because each person has different circumstances, investing is a different tool for everyone.

There are many options when it comes to putting your money into an investment, and a good financial planner should take the kind of investment you want to make into consideration when offering recommendations. Financial planners can also offer a variety of advice for money that you choose not to invest. How do you manage your debt? How much should you put into a savings account? The goal is to make sure that the income you have and the income you generate are commensurate with your current situation and your vision for the future.

So when should you begin investing? Is this something you should think about as you near retirement? We recommend that you start actively participating in your financial future as early as possible. Being a newlywed, for example, is a great time in life to start a discussion with a financial planner, because it sparks a lot of long-term questions. A discussion with a planner can get you to the answers and the education you need to set yourself up for a successful future. Are you planning on having children? Are you considering buying a house? Do you want to combine your finances with your spouse’s? Should you take benefits through your job or your spouse’s job? A financial planner can help a newlywed couple come up with a solid plan to combine their lives and provide them with the tools to make smart decisions.

Ultimately, whether you’re a newlywed or at some other stage in life, your goal is to be set up for the future you want. When you find yourself wondering “What should I do next?,” it’s the perfect time to see a financial planner.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Charles Stephen & Company is not affiliated with Kestra IS or Kestra AS.