Process of raising funds or capital for any kind of expenditure is called as finance. You know that. But what you actually need to know is that how it works. Things can get complex at times.
A good financial advisor would like to recommend you about:
- Things which are needed to be done differently
- Amount of money necessary to save
- Various Types of retirement accounts to use (IRA, ROTH, 401(k), etc.),
- Type of mortgage to have, if any
- What type and how much insurance you need (this would include life insurance, long term care insurance, disability, and some planners also give advice on property and casualty and health insurance) Some planners also advise on investment[but remember-investment advisor and financial advisor are different people]
- Your handy cash: emergency fund: how much you need to keep aside
- What changes might improve your tax situation
- What rate of return you will need to earn to achieve your goals over a given time frame
- Will it be useful or not to pay off your house….and so on
- In addition, many financial planners provide estate planning advice and tax planning services.
A Good Financial Planner Will Not: Make recommendations until they understand your goals, and have run a long term financial plan for you. They will set timely and realistic goals which can be easily achieved.
A Good Financial Planner Will: Want to gather account statements and data on all aspects of your financial life.
In this way, financial planners can help us out from our monetary distress.