Financial Planning Month – Tips on Financial Planning

Halloween isn’t the only thing spooky about October, it’s also Financial Planning Month. Yep, scary for many of us thinking:  “I should be saving more, I should be investing here, etc.” Never fear because recently, I had the pleasure of having a one on one chat with our Carr Workplaces client, Thomas Conway. He is the President, Founder and Managing Member of The Connemara Group, LLC and he shared some useful financial tips that everyone could benefit from.

What are some financial tips you wish your 20-25-year-old self knew?

Consistently outperforming investment markets is exceedingly difficult. Begin saving early by investing in broad, tax-efficient, low-cost mutual funds or ETFs. Find a well-qualified fee-only financial planner who is willing to provide unbiased advice when needed without managing your money for a fee or selling investment or insurance products. Building a strong, tax-efficient investment core and supplementing this core with a small number of carefully chosen stocks is likely to provide many benefits over time. Wherever possible, save on a tax-free basis using Roth accounts as a hedge against future tax rate increases. Purchasing low-cost 20-30 year level-term life insurance while one is young and healthy is essential for anyone who may one day start a family.

If I am trying to pick a financial advisor, what are some good questions I should ask? What sets a good financial advisor apart from a great financial advisor?

First, ask whether the advisor is a fiduciary and is willing to put in writing an adherence to fiduciary standards.

  1. Ask for a copy of the advisor’s Form ADV Parts 2A&2B to learn more about how the advisor operates and is compensated.
  2. Find out how long the advisor has been in a client-facing role and how many comprehensive planning engagements the advisor has completed.
  3. Ask what sorts of tools the advisor uses and how the advisor may be able to set an appropriate course for you and your household while keeping you engaged in the planning process.
  4. Ask about any specific professional designations or credentials the advisor may have that are relevant to your own needs.

I don’t have a 401K, what should I do?

Many types of retirement savings vehicles are now available to investors.  Whether it be a Traditional IRA, a Roth IRA, a brokerage account or a combination thereof, investing for life’s most important goals is easier than ever. The most important thing is to begin saving early and automatically using concepts such as dollar-cost-averaging and value averaging.

What are some little ways that you like to save money? And when do you like to splurge?

Periodically I review where I am spending money and decide whether I am really using a specific product or service. Many of us buy things or subscribe to things we rarely use. Immediately tossing catalogs you get in the mail can help avoid impulse purchases. Making a list of things we want and then letting that list sit for 2-4 weeks helps us prioritize and decide whether we really need something. It’s amazing how, if we simply postpone buying something for a month, we later decide we really do not want or need the item.

Less is more. Buy fewer clothes and instead purchase nice items that will last. Splurge on experiences—not things, as we age we find ourselves giving away much of what we have accumulated. Memories of trips will last forever.

What are some of the biggest mistakes that most people make when it comes to their finances?

Without good health, we have little. Whether it be our physical, mental, emotional, spiritual or financial health, all aspects of our health must be nurtured and protected. Whether it be a doctor, dentist or financial planner, seek out qualified advice when needed. Most of today’s working men and women can, with occasional professional guidance, manage their own money and finances quite effectively.

Artur Samofalov, General Manager, Willard Offices

By Artur Samofalov

General Manager

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