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Family, Funds and Finances: Are You a Future Financial Advisor?

money-79657_1280 Financial advisors change peoples’ lives and help them protect their assets. For that reason, they will always be in high demand. Here’s some advice and information to help you get into this lucrative industry.

Education Requirements

There aren’t generally high educational standards in the financial planning industry, which is surprising given that you will be managing other peoples’ money or advising them on the best course of action.

However, you can attend colleges like the American College to get a formal education in financial planning. If you attend a college in California online, you can reduce the costs associated with your degree.

Regardless of the route you take to get in, there is always continuing education that is required each year. Depending on the state you live in, and the licenses you hold, you must complete 15 to 40 credit hours every other year, test out on exams, and achieve a passing score to maintain your license.

Where Will You Work?

Most financial planners work for a financial firm or insurance company. But, you can also go out on your own and become an independent registered representative or insurance agent. Some financial professionals open their own financial firm and hire other financial advisors to work for them.

The Sales Component

Do you like sales? Financial planning is a sales-based job. Almost every financial professional needs to be able to sell a client either financial products or sell them on a financial plan. Sales and marketing is perhaps the most under-appreciated aspect of financial planning and many planners struggle with it.

While much of your business will initially come from referrals, you will eventually have to learn how to market.

Charging Fees vs Earning Commission

Financial advisors earn money through fees or commissions. Fees are either based on assets under management or a flat fee for services. Commissions are based on the dollar amount clients use to buy financial products from you.

There is a debate over which compensation method is more fair for consumers, with fee-only financial planners claiming commissions create a conflict of interest between consumers and advisors.

Commissioned advisors, on the other hand, argue that many middle-class families can’t afford the high fees that some advisors charge. The commissions take the place of a $500 or $1,500 planning fee.

Income Projections

Financial advisors make between $40,000 and $100,000 per year. Some make more than that but, according to the BLS, financial advisors earn a median annual income of $90,000. This median income is applies to what many in the industry call “investment advisors.”

Investment advisors manage money for clients who are usually high net worth, raking a 0.5 to 1 percent management fee each year on the total invested assets.

Financial advisors who charge a flat fee may make much less due to the fees being a one-time charge. Commissions salespeople also sometimes refer to themselves as “financial advisors,” and may make more or less than the median income listed by the BLS depending on the products they’re selling.

Sara Curry has enjoyed a successful career in financial services.She likes to be able to share her insights and experiences online. You can find articles written by her on a number of relevant websites.

How to find a job after graduation

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Are you a recent grad?  If you walked across the stage to get your diploma and shake hands with the hierarchy of your school  you may be ready to start the next phase of your life.  I graduated with my Bachelor’s Degree in 2005 and when I close my eyes I can remember that day as clear as if it was yesterday.

Find a mentor for guidance

I was thankful that I had a full time job at graduation, but that’s only because I worked full time during my four years of college.  Why is all this coming up?  I was recently asked to mentor a soon-to-be-college-grad on how to transition from the world of books and classrooms to the workforce.

To be honest my transition from school to full time work was kind of a relief.  After graduation I only had to work full time, I no longer had to also attend classes, do homework and fit time for group work into my busy schedule.  To say graduating freed up a lot of my time and for that I was thankful.  If we’re being totally honest with each other I actually missed school and went back to pursue a second degree a year after graduation.

Work part time during school

So what’s my advice for recent grads?  Well my number one piece of advice is to gain valuable work experience throughout your four years of college, not just in the last semester before graduation.  I’m not suggesting that everyone work full time while studying because I know how hard it was on me.

My grades would have definitely been a lot better if I had the liberty to dedicate 100% of my time to my studies instead of focusing on work.  However part time work can help gain valuable skills that employers look for after graduation.

Check with the student union for part time gigs on campus, check with local student hangouts in the area such as cafes and store.  You may even want to ask your parents if there’s the possibility for part time student positions at their workplace.

Take a non paying gig

During college you may not be looking for a job for the pay check.  If your main goal is to gain valuable work experience then think about non paying gigs such as an internship.  Sometimes departments and teachers are looking for part time aides and assistants, but they don’t have the budget to pay.

Working during college – whether it’s paid or not – can help you gain experience such as accountability, responsibility, multi-tasking and team work skills.  These are all things that potential employers will look for in potential employees.

One mistake students always make is trying to find work in their field of study and that may help.  However employers only look for experience in seasoned employees.  Potential employers look for general sills in entry level employees because you’ll be able to learn everything else on the job.

What’s your career advice for recent grads?

Photo from I’d Pin That

Would you buy a new car?

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I did.  In 2007 I bought a new car and swore it was the biggest financial mistake I ever made.  I sold it three years later and now five years after that BF and I are thinking of getting another new car.  So here’s my question, do you have a car and if so did you buy it new or used?

There are several advantages of buying a new car such as the warranty on parts and service as well as the peace of mind that comes with something new – and of course there’s the new car smell.  I will never forget the day I picked up my car from the dealership and sat in it for the first time.  I was 27 years old and felt like a true adult for the first time in my life.

Buying a new car is a big girl purchase

Buying a new car was the biggest purchase I’ve ever made and I was more than happy to parade it around in front of my family and friends whenever I could.  My parents didn’t really seem to care too much, but to me buying a car was a really big deal.

A new car comes with new financial obligations that I definitely wasn’t ready for.  The car payment alone was $500, then I was paying $125 in parking, $50 every two weeks in gas and $100 a month for car insurance. Overnight BF and I suddenly had a newfound $775 in monthly expenses that we definitely couldn’t afford.

A new car costs a lot of money

I would love to tell you that it was all worth it because our brand new Honda Civic was just that awesome, but unfortunately the cost wasn’t worth the benefit for us.  Since we lived in the city and both worked less than 30 minutes away on foot we always walked to work.  Of course it would be easier to drive, but I refused to pay $125 for parking in our apartment building and another $250 per month for parking at the office.

We really only used the car on weekends to run errands, get groceries and for weekend road trips.  We sold it three years later with less than 30,000 kilometers on it.  I was sad to see it go, but I love saving the extra money every month.

The case for buying a used car

A lot of people who have bought both new and used cars say that they will never buy used again.  For some people the inflated cost just isn’t worth it.  I like the idea of having something new, but then again having something that’s only a couple years old and saving thousands of dollars is O.K. too.

It took a long time for our Honda to become fuel efficient.  The dealership says that this usually only happens after 10,000 kilometers.  It took us over a year to reach that point on the speedometer and until that point it seemed like our car was drinking gas.  Now remember this was back in 2008-2009 when gas prices were very high.  Buying a used car means this is already worked out.

So what would you do?  Buy a new or used car? Photo from Pixabay

How to Maintain Good Credit

Maintain Good CreditThis post is a contributed post from USA.gov.  See their Financial Self-Defense Kit for advice on how to build financial confidence as well as safeguard your finances.

“It takes many good deeds to build a good reputation, and only one bad one to lose it.”

— Benjamin Franklin

Your credit history is your financial reputation. And just like your professional and personal reputations, your credit history takes many years to cultivate, can be easily damaged, and will follow you for the rest of your life.

Sound intimidating? Good. Are you scared? Don’t be.

Yes, maintaining good credit is important. Nearly everyone will need to borrow money from a lender at some point — say, for buying a car — and your credit history determines whether you qualify for a loan and, if you do, what interest rate you pay. It can make or break your application for a credit card. A prospective landlord can check it to judge whether you’ll be a responsible tenant. Potential employers may request your credit reports to see if there are any red flags.

Luckily, many resources are available to help you learn how to successfully establish — and maintain — a healthy financial reputation. Here are three tips for creating a stable foundation for good credit:

Monitor your credit reports

Understanding your financial habits — such as payment history and spending patterns — can help you improve them! Your credit score is generally based on information in your credit reports. Mistakes on your credit reports could hurt your credit score, so check them regularly. Make sure to check that your reports don’t contain any errors, such as incorrect contact information, closed accounts listed as open, or an item like an unpaid debt listed twice.

If you find something wrong in a credit report, you should contact both the credit reporting agency that produced it and the creditor that provided the information.

Pay your bills on time

This is one of the simplest ways to keep your credit score strong — yet, with the hustle and bustle of everyday life, it can be easy to lose track of time and miss payment deadlines. Set up auto-payments or electronic reminders to ensure that you won’t be hit with late-payment penalties. Paying bills late can also hurt your credit score, which in turn can raise your interest rate — meaning that you’re out even more money.

It’s a common misconception that the best way to improve a credit score is to pay off all of your accounts and close them. Get up to speed on your payments and stay on schedule, but be careful when closing accounts. Doing so eliminates some of the credit available to you, making balances appear higher when compared with the combined credit limit of all of your accounts. Also, if you managed that account well and made payments on time, closing it will remove all the positive benefits of your responsible credit behavior on your report and score.

Don’t get close to your credit limit

Credit scoring models look at how close you are to being “maxed out,” so keep your balances low in proportion to your overall credit. Experts advise keeping your use of credit at no more than 30 percent of your total credit limit. That means that if you have $12,000 of available credit, you shouldn’t use more than $3,600.

You can decrease your credit utilization ratio over time by paying as much of your credit card balance as possible each month. If you can, pay more than the minimum balance due; this will increase your available credit and decrease your utilization ratio faster.

Just as a shining professional reputation can take you far in your career, your credit score can make or break your financial status. To learn more about how to establish a stellar financial reputation, visit FinancialProtection.USA.gov.