Do you need a Plan?

Financial Planning is an important activity focused on determining your needs and setting practical goals such as funding retirement, sending a child to college, or perhaps the purchase of a home. A financial professional can help you develop short-term and long-term goals designed to aid you in accomplishing these financial objectives. But is there value in paying for investment guidance?

The value of guidance and advice provided by a licensed and trained financial professional is hard to quantify. For some, the convenience of letting someone else handle the complexities of investing is invaluable. For others, professional advice and guidance can help provide a sense of financial security.

Prudent investing is based on the patient, disciplined application of a plan. In addition to helping you develop the plan, an experienced financial professional has an understanding of how markets have historically performed, the value of compounding, and the implications and consequences of taxes. Milestones in life often require the assistance of a professional, just as an illness might require a doctor’s advice and care.

Together, you and your financial professional can navigate the increasingly complex world of investing and financial planning.

Help keep you from panicking.

It’s easy to be upbeat when the markets are rising, but it’s a different story when they’re on the downturn. A financial professional can provide a voice of reason, and help you make prudent decisions under stressful circumstances.

Educate you.

A true financial professional – not just someone looking to sell you investments – will strive to help you understand why you’re investing and why a particular investment may be right for you.

Help you determine "the big picture."

Investments should be made in light of the other parts of our financial lives. For example, you might think it’s a great time to invest in the stock market, but it may be more prudent to buy additional disability or life insurance, pay off some high-interest debts or start an emergency fund.

Develop an Estate Plan.

Perhaps you already have a healthy portfolio, but no estate plan. That means when you die, a large portion of your well-earned portfolio could end up going to Uncle Sam in the form of estate taxes. A financial professional works to help make sure your "financial house" is in order.

Select investments.

There are thousands of mutual funds, stocks, bonds, real estate, annuities and other investment options from which to choose, and most of us don’t have the time or expertise to sort through them. A financial professional can help you select investments that are designed to fit your needs and objectives.

Even a small delay in implementing your financial plan can have monumental results. For example, a 35 year old man has $10,000 to invest in an IRA. If he made no further contributions and the account grew at a hypothetical 7% return for 30 years – until he retired at age 65 – it would be worth $81,160. That’s because compound and tax-deferred interest have enough time to work their magic. But just waiting 10 years to invest that same $10,000 can be costly. Assuming the same IRA at the same 7% return, the money grows for only 20 years and will be worth $40,380.

Let’s look at it from another angle – investing on a monthly basis. Let’s assume you want to retire at age 65 with a nest egg of 250,000. Assuming a hypothetical 7% return, how much would you have to put aside each month to reach your goal?