Financial Planning: Keys For Success

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As money begins to accumulate in your bank accounts, you may feel that investing your cash into mutual funds or stocks is important. Before putting money into various investments that don't perform the way you expect, try these different financial planning suggestions.

Use a Fee-Based Financial Planner

Many first-time investors use commission-based financial planners. This means that a financial planner will earn commission from the various investment tools they recommend to clients. Sometimes this can cause investors to wonder whether their financial planner is recommending the best tools or only the ones with high commission rates. Luckily, fee-based financial planners exist too; these planners have set fees for their work. This can make you much more comfortable about their recommendations for different mutual funds and investments. Their salary is based on fees they collect for their time and expertise.  

Learn About Different Investment Tools

While many people rely on financial planners to explain bonds, stocks, mutual funds and other investment tools, educating yourself is important. Before meeting with any financial planners, sit down and learn the basics of investing, saving and other financial concepts. This will allow your financial planner to take on the role of a guide rather than only a teacher. With your attention and fundamental knowledge of the issues, you and your planner can select better investments for you.

Have Goals

While you may understand the need to have a financial planner help you, you may not really know what your personal goals are. Do you wish to have more money in retirement? Do you want to amass a fortune to leave your children? Clear goals can affect whether you put more money in stocks or focus efforts entirely on mutual funds. Talk through your motivations and preferences with your planner.

Discuss with Family

While you might be adamant that your financial planning activities are private, discussing them with family members could be important. You may not want to give them too many details about the specific investments your financial planner has chosen for you, but keeping them informed is wise. If you provide them with all the information they need, they will know who to contact if anything should happen to you.

Solid financial planning can ultimately provide the funds needed to live out your later years in peace or provide cash for other future goals. Ensure that you're frequently communicating with your fee-based financial planner to remain aware of how your accounts are doing.