4 Situations Where Getting a Financial Advisor Makes Sense
Some people feel like they are financial geniuses, but most others do not. Many individuals will freely admit they're not great with money, especially when it comes to complex financial matters. Luckily, though, there are experts who can help you if you need advice or an investment strategy.
You may not be sure, though, when the best time is to get a financial advisor who can help you with your money and planning for your future. Let's talk about some scenarios where you probably need to bring in professional help to assist you in this area.
The 20% Rule
You can always ask an attorney about financial matters since they're often sensible individuals, and some of them know about investing. Financial advisors or strategists, though, make helping people with their money their life's work.
You might decide the time is right to talk to a financial advisor if you've reached a point in your life where you can save 20% of your total net income. Some people never reach that point, or they only do so later in life. That's one of the financial goals toward which you should strive, though, since you can save that money for retirement, purchasing a home, and so forth.
If you get to this point, you can contact a
financial advisor and ask them how best to invest that money. What they tell
you will probably depend on what your goals are. You probably don't want to
throw that money in the bank, though, since other investment strategies will
likely benefit you more.
When You Receive an Inheritance
Receiving an inheritance can change your life. It
doesn't happen for everyone, but if you have a wealthy parent who dies or some
other relative who left you a chunk of money, that's a time when you're
probably going to need some sound advice.
This sort of windfall might only happen once in your
life, and if it does, you don't want to make a mistake. If you have
debts, the financial advisor might well
instruct you to put most or all of the money toward that.
Paying off student loans, credit card debt, and other financial burdens can
positively change your fortunes.
If you're debt-free or close to it, they might talk
to you about putting some of that money into stocks, bonds, mutual funds, and
other investments. Virtually all financial advisors will tell you to diversify
your portfolio, so be ready for that.
You Want to Put Away Money to Send Your Kids to College
You might be at the point in your life where you
have a couple of kids, and they are getting close to college age. It may also
be that your children are very young, but you're already thinking about their
If so, that's commendable. Education can cost quite
a lot, especially if you want your youngster to get into one of the best
schools. At the moment, the federal government is quarreling about student loan
forgiveness, but it's far from certain how that's going to turn out.
You know that if you can pay for your child's
education at a reputable school, that's much better than them going into
debt. You can definitely talk to your
financial advisor about all of that, and they might be able to
suggest a way you can juggle your current bills while still putting money away
for your child's college tuition.
You Are Getting a Divorce
If you're getting a divorce, it's probably a rough
time for you emotionally. However, you need to think about your finances,
especially if the divorce is particularly acrimonious.
Your financial advisor can talk to you about how you can protect your assets so
that your soon-to-be-ex doesn't get all of it. You'd hope that the two of you
can come to an equitable arrangement, whereby both of you have enough to live
comfortably. Still, there are circumstances where a former spouse will try to
get as much as they can from their ex, leaving them with nothing.
A financial planner is not a lawyer, but meeting
with them and discussing your finances in this situation is always a smart
idea. You may be able to structure your assets in such a way that you can get
through the divorce okay and then start to rebuild your wealth afterward.
There are many more viable reasons to get a
financial advisor, but these are some of the most common ones.