How Your Financial Adviser Is Similar To A Personal Trainer

The questions is posed often: “Why should I hire a financial adviser? Can’t I just create a savings account, and then sign up for something like eTrade to invest in securities?” I like to counter this argument by asking, “why do people hire personal trainers?” Personal trainers teach the same exercises you can find online for free, so why pay for something that is only a search query away?

The answer to this question is multi-faceted. When you work out on your own, you’re responsible for your own schedule. Being responsible for your own schedule is incredibly difficult – it’s very easy to cheat yourself on the number of days you workout, or the number of reps you complete in an individual workout. When you workout on your own, you sometimes demonstrate improper form – something that may not hurt now, but will 10 years from now. When you workout on your own, it’s hard to stay motivated.

That is precisely why you hire a personal trainer – to be responsible for your schedule, to whip you up into good form, and to keep you motivated. What’s funny is this – a financial adviser is much like a personal trainer. Albeit, they practice in different industries, but what they provide you is very similar.

Financial advisers help you diversify and manage your assets (schedule responsibility), show you how to properly prepare for retirement (good form), and create an obligation to invest in your present and future (motivation). Sure, you can try to save money on your own, but your will must be strong. And of course, you can go out and use eTrade to handle your security trading, but many eTrade investors fall pray to personal emotions getting into the way of good judgement.

I recommend finding a financial adviser, and schedule a sit-down to talk about what you’re current investment portfolio looks like, what you’re financial goals are, etc.

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How Making Your Bed Can Help You Financially

making bed
Do you make your bed in the morning? Be honest. It’s a difficult habit to get into, especially if you’re not a morning person. However, you may be surprised to hear how making your bed every morning can help you financially. One of the key steps to becoming financially independent is developing the habit of saving, but just like making the bed, it’s a very difficult habit for most people to get into. If you put your mind to it, you can develop that habit. Here’s how:

Making the connection

Before we can start helping ourselves financially through creating of routine of saving, let’s build up to that by creating a routine of another action. I chose making your bed, because I’m writing this article almost right after doing so. Starting tomorrow morning, the minute you jump out of bed, turn around and make it. If you have to do jumping jacks before hand, do them (you’ll be surprised at how awake you become after doing 25 jumping jacks in the morning). You’ll want to stop after the 4th day, but do not. If you can hit two weeks of making your bed every morning, science shows that it will become routine. You’ll wake up and make your bed without even thinking twice about it – it will just become something you do.

The same should go for savings – it should become something you do, just like making your bed. If you’re able to conquer bed making, saving is not much more difficult. If you’re not saving any money at all, let’s start small. Begin by saving whatever amount you’d like in a savings account every week – this has to be money you will not touch unless an emergency occurs. Saving money every week will put you into a habit of saving, and it’s a great habit to have.

Hopefully, you’ve seen the connection between making your bed and saving money for the future. Both are habits, and both habits can be learned if molded into your routine. Just like the first 5 minutes of running, starting the routine can be horrible – But once you get past that, it’s easy going.

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Achieve Financial Independence Through Entreprenuership

mark zuckerberg

In my previous post about gaining control of your financial life, in tip #13 I mentioned how taking the route of an entrepreneur can be incredibly beneficial to your financial help, depending on your circumstances. Today, I’m going to delve a bit deeper into that tip and lay out the path to becoming an entrepreneur.

Not everyone is born an entrepreneur, but I firmly believe that everyone can become one. You don’t have to read books, or attend seminars, or take classes – entrepreneurs are driven by passion. Do you have passion for something? Maybe it’s cars, cooking, running, model trains, etc. Have you ever thought, “I wish so-and-so could be better?” If you have, you’ve discovered a problem. Now, you must provide a solution.

Search locally and online for solutions to your problem. Don’t see an adequate solution to the problem you’ve discovered? You now have an opportunity in your hands. Prototype, brainstorm, do whatever you need to do to figure out how you can improve that aspect of your passion.

Now, before you run off and go Zuckerberg on everyone, consider if your finances can handle the volatility of becoming an entrepreneur. You may need to take out loans if you’re idea requires physical production, so be sure to have cleared your debt before embarking on this path.

Continued reading: 163 Ways To Becoming an Entrepreneur.

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Gaining Control of Your Financial Life

financial independenceOne of the most common questions I receive on a monthly basis from friends, family, and acquaintances is, “how do I gain control of my financial life?” When asked on the spot, it’s incredibly difficult to answer. There are so many questions I need to ask them first before I can give a concise answer – and even then, I still need to bring them in for a sit down.

Gain control of your financial life

I’ve decided to compile a list of the 13 strategies needed to take control of your financial life. Now, whenever I’m asked the question, I refer them to this list before I have a sit down.

1. Create a priority list: What’s the most important goal you need to accomplish? List that goal at the top of your list. Is it to remove all debt? Send your child to college? Whatever it is, list your priorities in order from highest to lowest. There are even a number of iPhone apps that will allow you to do just this.

2. Set a budget: You know, I can’t believe this is on my list, because it is so simple and so important. Frankly, I’m astonished when people approach me with financial advice, and when I ask if they’ve created a budget to meet their priorities, they respond with, “I haven’t had the time.” If you don’t have the time to set a budget now, when are you? Set a realistic budget, and stick to it. Track every penny.

3. Invest and diversify: Choose an asset class to invest money into – whether it be securities, real estate, etc. I suggest you properly diversify your investments not only across asset classes, but within asset classes as well.

4. Take control of your debt: It’s tempting to use a credit card with the “receive now, pay later” mentality in mind, but you must erase this mentality if you’re planning on becoming financially independent. Find who you owe money to, and focus on saving money in order to pay off those debts. Nothing feels better than being debt-free.

5. College savings: If you have a child, do them the benefit of sending them to college. Begin saving now, so you take some of the burden off them in terms of loans later in their life.

6. Teach your kids the value of the dollar: If you’re reading this article, chances are you wish to become financially independent. Do you want your children to be reading this same article, in the same situation as you 20-40 years from now? Teach them the value of the dollar.

7. Retirement planning: Start saving now. Retirement should be enjoyable, and come earlier in life rather than later. Money makes retirement enjoyable, so save with the thought in mind, “I’m delaying my fun now so my future self can enjoy this money.”

8. Diversified assets: Somewhat similar to tip #3, but focus on understanding how & why you should be diversified. Owning shares of Target, Abercrombie, and KMart is not diversified.

9. Hire an adviser: They’ve spent years of their lives learning to plan your finances. Find a good one who is trustworthy and knowledgeable, and hire them.

10. Manage your taxes: Do them right, and either use a tax software such as TurboTax, or hire a tax professional to help you.

11. Family finance planner: You’re not just taking control of your own financial life, but the financial lives of your family as well. Make sure everyone is on board with you.

12. Estate planning and asset protection: Hire a professional to create a plan for after your gone. Protect your estate as well as your assets.

13. Entrepreneur route: Have a passion for a niche, or do you see entrepreneurial opportunity in your workplace? Hammer out a business plan and see if this is something that can be done as side-work until you’re ready to take on your own business full-time.

Conclusions

Hopefully you’ve taken something from the list, and will take action on it. It may seem daunting at first, especially if you’re in dire straits, but the road to financial independence is a long one, and one that requires dedication and hard work. Start now.

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