Sometimes it seems like financial planning has a shroud of mystery. But that doesn’t make it intriguing; it just makes it inaccessible and hard to understand. I’m about turning the fog machine “off” and giving you a clear and confident view of your money.
Today I’m debunking seven common misconceptions you might have heard about financial planning.
Misconception #1: Financial Planning Is Only For The 1%
You don’t have to be a Rockefeller to benefit from building a financial plan.
Despite the stigma surrounding it, financial planning isn’t just for ultra-wealthy one-percenters. In fact, everyone can benefit from creating a comprehensive financial and investment plan— especially one tailored to address their unique goals and values.
Whatever your net worth, it’s important to know how to manage your money effectively to grow and protect it. Working with a financial planner to create a plan is the first step in finding intentional ways to build your wealth.
You’ll find that as you move through the different life stages, you will be presented with various planning opportunities. Buying a house, managing stock options, growing your family, saving for retirement, etc. Being a responsible steward of your wealth means creating a financial plan that addresses these goals.Misconception #2: My Financial Advisor Will “Judge” Me
Financial advisors aren’t the spending police, and I certainly don’t judge you for how you choose to use your money. That’s not productive or helpful.
Instead, I encourage you to spend more of your money on the things that make your life better. As you move through life, you’ll find that those “things” change and evolve as new goals develop.
I’m passionate about helping people redirect their money to lead more fulfilling lives, whether you’re thriving in your current career, navigating a career change, transitioning to a work-optional lifestyle, or something in between. I do this by encouraging, educating, and fostering an environment of honesty and trust.
Misconception #3: It’s Just Too Expensive
Have you ever decided to DIY a home improvement project and realized afterward it would have been faster, easier, and less expensive just to hire a pro?
The appeal of DIYing is saving money, and people sometimes think DIYing financial planning will help them spend less on advisory fees.
But the truth is, properly understanding how to handle your stock options can save you tremendously in taxes (and heartache). This is just one example of the tangible value working with a financial advisor can bring to the table.
Professional advice helps you make the most of your financial opportunities from an investment, tax, and goals perspective. Not to mention, having a knowledgeable professional on your side is a tremendous help.
If fees are still a concern, ask your advisor to review their policies and fee structure with you, so you’re not hit with any surprises later on.
Misconception #4: I’m Capable Of Managing My Finances, So I Should
You’re super smart, driven, and capable – there’s no doubt about it. If you desire to do so, you can absolutely manage your money by yourself.
But ask yourself this,
Would I prefer to spend my evenings and weekends relaxing with loved ones or rebalancing my 401(k)?
Working with a financial advisor frees up your time to do more of what you love and puts your financial future in the hands of a knowledgeable professional with your best interest at heart.
Misconception #5: Financial Planning Is One And Done
A financial plan isn’t meant to be a “set it and forget it” thing. Instead, it’s a living, breathing document that grows alongside you.
Take cash flow, for example.
Say you’re single, in your early 30s, and renting a downtown apartment. Fast forward 10 years: you’re 40, married with two kids, and preparing to make a downpayment on your first home.
The cash flow plan you have now will look much different than the one you have 10 years from now. That’s why it’s imperative to re-evaluate your plan and adjust as your life evolves. Life is full of transitions, and your financial plan can help you ease into those changes.
Misconception #6: All Financial Planning Is The Same
Financial planning isn’t one-size-fits-all by any means.
Advisory firms across the country have different specialties because people need different things from their financial plans. The financial concerns of a tech employee in California will look different than those of a family business owner in Texas.
As you search for the right financial partner, ask lots of questions and take the time to understand if they’re a good fit for your needs.
Misconception #7: Financial Planning and Investment Management Are Interchangeable
Actually, the terms “financial planning” and “investment management” mean very different things, but they work together to address your full financial picture.
Financial planning: This concept focuses on how your money supports your life. It’s about taking a holistic look at your short- and long-term goals, personal values, and desired lifestyle.
Investment management: Constructing and managing your portfolio over the long term is the primary purpose of investment management. Investment management is typically charged by the amount of assets under management (AUM), and most advisors require a minimum to work with a client.
Work With Brightview
As you continue your journey to finding the right financial planner for you, don’t hesitate to reach out. I specialize in helping tech employees understand their stock options, develop a financial plan, and progress toward their long-term goals.
I’d be happy to take a look at your current financial picture and answer any questions you may have.