Why Should I Pay a Fee for Financial Advice?

Should I Pay a Fee for Financial Advice?
From time to time I’m asked, Glenn: there are plenty of financial guys out there. They’ll do financial planning for free. So why should I pay you guys?

Good question! To answer it, let me give you a little background.

Back say, 50 years ago, if you needed professional financial advice, from whom could you get it?

  • banker
  • stockbroker
  • insurance agent
  • accountant

What’s the issue about taking advice from these providers? It is the potential for conflict of interest. What do I mean by that? Well, the banker wants to open time deposit accounts and initiate loans. The stockbroker wants to trade stocks in your account. The insurance agent makes a living selling policies. The accountant, on the other hand, focuses on preparing financial statements and doing tax returns.

Is there a conflict of interest?
Now see where I’m going with conflict of interest? If the banker recommends a one-year CD, is it because that is the best...

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Financial Windfalls: Money Changes, Life Changes

A few months ago I heard Susan Bradley from the Sudden Money® Institute say something quite profound regarding our relationship with money and financial windfalls:

When life changes, money changes.
When money changes, life changes.
The order in which change happens makes a big difference. The latter statement, referring specifically to financial windfalls, is a much harder change to handle for most people than the former statement. Let me explain.

Life Changes
Life changes are a constant: marriage, babies, a new home, family milestones, divorce, promotions, demotions, getting fired, moving to a new city, kids going to college, changes in health status (ourselves or in a loved one), growing old, and death. These are some examples of life changes. As with any change, anticipated or otherwise, we make budget adjustments and plan ahead. The unknown can become overwhelming at times. This is why we often tell clients to do what you can. We help find solutions for what’s possible....

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Homestead Exemption for First Time Home Buyers

Congratulations! You’re a first-time home owner in Miami, FL and you’re settling into your new place. The first year of home ownership brings many changes – new commute to work, new paint on the walls, and remodeling the bathroom. It’s an exciting time as you make your house a home, and start a new chapter in life while building personal equity. But one thing that could get lost in transition is remembering to file for your Florida Homestead Exemption. Not filing for a Homestead Exemption will likely cost you money.

What is a Homestead Exemption?
A Homestead Exemption accomplishes three main things — it reduces your property tax bill, protects you from creditors, and protects a surviving spouse when the other home owner dies.

How can you claim your Homestead Exemption?
In Florida you have to claim a Homestead Exemption – that is, it is not automatic. In Miami-Dade county, you can claim your exemption online on the Miami-Dade Property Appraiser...

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A Beginner’s Guide to Buying Life Insurance

 

This is life insurance 101 – written for those looking to buy their first life insurance policy.

Life insurance 101
You are a Millennial. You’ve launched your professional career and are building a solid financial house for yourself. Life insurance is part of the foundational structure of this financial house, along with your estate documents. Check out our short video on basic estate documents. Once you’ve read my post on life insurance 101 and established coverage, there’s no need to revisit your coverage until a life event takes place (marriage, baby, new mortgage, etc.).

Who needs to buy need to buy life insurance?
This is perhaps the most important question when it comes to life insurance 101. Some life agents will say “everyone”. In my opinion, you have a life insurance need when someone else is depending on you for a living. If you do not have other substantial assets, you probably need to buy life insurance. Let’s say you’ve got...

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The Big Tax Code Revision

Major news! The tax code revision is now law. In this blog post I want to review the major changes on individual tax returns. In subsequent posts I’ll cover the changes to business taxation, and then given an opinion on the whole thing. This will of necessity be a long post, so please bear with me.

The new individual provisions mostly take place in 2018, and expire at the end of 2025. The changes to corporate changes are permanent. This has to do with the arcane way bills move through the legislative process in Congress.

The general flow of the form 1040, or the long form, is this:

Income goes on lines 7-22
This is taxable income from wages and business interests, and from investment earnings. Taxable income also includes alimony received, capital gains and losses, IRA and retirement account distributions, rental real estate income, farm income, unemployment compensation, and social security benefits. Yes; social security benefits are taxable; see a special

Adjustments to...

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Student Loan Stress: Taking Steps to Live Debt Free

 

According to CNBC, there is more than $1.2 trillion in outstanding student loan debt, owed by 40 million borrowers, who have an average balance of $29,000. * Do you have student loan stress?

Large student loan balances can be a significant cause of stress. Stress over loans can lead to resignation. “I’ll have student debt forever” is a refrain I hear from some clients. Resignation leads to denial and even inaction. Where are you in this progression? Does this sound like you or someone you know? Are you a number of years out college or graduate school, yet it doesn’t seem like your loan balance is coming down?

Until recently, the economic environment hasn’t been the best for many new entrants into the workforce. You’ve taken on more debt at a younger age than the previous generation. Also, it’s tougher to find the higher-paying jobs required to pay off those loans. So what can you do?

Student loan stress: don’t live in denial, own it
...

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The Advice Industry

A little history of the advice industry
In this post I’d like to give a little history and background on the advice industry. It may not grab you right off as being the most compelling reading, but please stick with it. I have some valuable points to develop.

A visit to the stockbroker
When I was a teen I remember going with my father to visit his stockbroker. Dad used the occasion to teach me what owning common stock means (an ownership stake in a publicly-traded company). He explained that the broker brings buyers and sellers of securities together, and facilitates trades. For this service there is a fee on each trade – a fee on both the buy and the sell, paid by the customer to the broker.

Looking back on it, Dad was explaining to me that I, the buyer, and the broker, had a conflict of interest. My interest was getting the cheapest price for the shares. The brokers interest was to execute a sale, not unlike any other salesperson working on commission – from the...

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A Fresh Perspective on the Budget

 

Many of you have heard the old adage, If you fail to plan you plan to fail. Your financial planning begins with your cash flow planning – your budget, in other words. This spending plan keeps you focused on working toward achieving your financial goals. The order of operations is this:

Establish and quantify financial goals
Think this through carefully: How much do I need in my emergency fund? How much debt do I have to repay? How much should I accumulate in my retirement accounts?

Your budget – write down income and expenses
Here is where the budget comes into play. Use the budget as your roadmap to make sure you achieve your goals. Empirically I can tell you: after just 3 months of budgeting, 8 out of 10 people say they feel more in control of their money. We have a great budget template that we’d be glad to share with you. Send an email to [email protected] with the request and we’ll send it out.

Budget for the year
The budget should run out a full...

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What’s it Like Working with a Financial Planner?

 

What’s it like working with a financial planner?
I know many people reading this blog post have never engaged a professional financial planner before, and may be a bit reticent about what to expect. So let me tell you all about working with a financial planner at CameronDowning.

We always offer a complimentary first meeting. This is so we can determine, together, if we’re a good fit to work together. We want to know all about you – not just your financial life but about your family, your ultimate goals, to whom do you want to leave money, and whether you have any special needs children who need to be provided for. We want to know how your parents doing. Could you become financially responsible for them at some point in life? Do you have an expectation of a legacy? Do you have any lawsuits pending? We need to know all of these things! Where do you hold your current assets? Are you pleased with your current advisor? If not, why not? How did it happen that you came to...

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Financial Planning for Millennials

As a Millennial, you are in a unique position to start strong when it comes to your money. Financial planning for Millennials looks very different than planning done for Baby Boomers, and requires special attention. Here are the top three financial priorities of Millennials, by far, in no particular order:

  • How do I pay down my student loans?
  • When do I begin saving for the future?
  • What is the best way prepare to buy a first home?

In a nutshell, this is the heart of financial planning for Millennials.

Millennials are hungry for sound financial advice
Where do you start? Start by working with a qualified professional to help you identify and prioritize these important money decisions. Find a financial planner who specializes in working with young professionals.

Who does financial planning for millennials?
Not many financial planners take on younger clients because Millennials rarely meet advisor’s investment asset minimums. In other words, who wants to work with a Millennial with...

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