Prevent Making These Mistakes by Hiring a Financial Advisor

People grab their wallets and purses when the names of Charles Ponzi and Bernie Madoff are mentioned. These two financial advisors took advantage of their knowledge and used it to fraud hundreds of people. Luckily, if you hire a financial expert with good reputation, they will work for your benefit and they will stop you from making the biggest mistakes concerning your personal finances. Here are some of the pitfalls that can be prevented by having a good financial advisor.

Falling for Scams

Different types of Ponzi scams are present today. They take different shapes and forms and they are just altered enough for you to not recognize them. However, such a thing will never escape the eye of an experienced financial adviser. They are able to see this sort of thing from a mile away and stop you before you fall into such traps. Therefore, make sure you consult them before any financial endeavor and follow their advice.

Too Much of Particular Stocks

This usually happens to the people that have discounts on the stocks of the companies they work for. Working for a company makes people think they know all about it and about its stocks. This results with portfolios that are not very diversified. In simple words, it means that you are putting all your eggs into one basket, which is a big issue for those that hope to live off their retirement fund. With the dynamic economy, this is not safe. Any financial advisor with a valid RG146 will tell you that.

Improper Budgeting

Budgets need to be made with reason and logic and not just with unrealistic hopes and dreams. You cannot hope for a big retirement fund or savings account if you are living in a house too large, paying too many bills for its maintenance. That is why you need somebody to go through your plans, fix them and talk to you about them. Your budgeting needs to be good, otherwise everything else will just fall apart.

Passing on the 401 k

If your company offers you 401 k, there isn’t a single financial advisor that will tell you to pass on it. This is a retirement plan that is sponsored by your employer. It means that you allow the employer to take a piece of your payment before the taxes and use it for investment. You have the control over how your money is invested. However, there are the companies that offer 401k plan only to employees that work for a while for them.

Bad or Non-Existent Retirement Plans

The math should be simple enough. You need to plan for your monthly expenses once you retire and you need to make sure that you start saving to reach the expected amount. A lot of people make the mistake of setting the monthly amount too low. Firstly, don’t overlook the medical bills. Secondly, calculate that you will be eating out more or perhaps even travel. Besides that, you need to make sure that your plan is realistic in relation to the fact how much you earn. There are many ways to fail planning good retirement fund, so hire a financial advisor to take care of that.

All these mistakes can and should be avoided. However, not many people can see them before it’s too late. That is why a good and reliable financial advisor is needed. No matter how much you pay them, they always find a way to save you more and prevent you from ruining your personal finances.

Dan Radak is a web hosting security professional with ten years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of online security, closely collaborating with a couple of e-commerce companies.

Share this post:

Related Posts

Leave a Comment

css.php