Episode #16 - Maybe it's time you talk to someone...

Meet your very first certified financial advisor.

Intro:

Thank you Max M and Tova P for clicking and bringing to my attention that I put the wrong link for the financial literacy quiz. Try it here.

Another week, another topic. I’ve received a fair amount of outreach regarding REITS (no, not the rabbinical school - that’s RIETS) from last episode. I encourage you to read to the end of this episode to see those questions/comments. Please keep them coming!

You may recall, a couple episodes ago we launched our first ever Winnings survey to a modest public reception. However, what did emerge was that only about 10% of the respondents contribute to a 401(k) and another 10% have their employer contribute, but they don’t contribute themselves. It also seems, that as a sign of the times and the demographic on this letter - nearly 50% of our community is currently not in the workforce.

Overall, I’m grateful for all who are a part of this community - and if I can be of help on the LinkedIn/job search side of things - connect with me.

As for financial literacy/preparedness in an age of unemployment highs and limited financial access - I bring you week’s episode covering: (Certified) Financial Advisors.

You might have expected something to do with robots and how they’ll save your financial life, perhaps they will, but before that I wanted to share the concept of a financial advisor - a real, live, person.

(FULL DISCLOSURE: I got this photo from a YouTube thumbnail about why you DON’T need a financial advisor. I have not had a chance to watch the video yet, but would love to catch up about it in the next issue).

The Pitch:

Ultimately, if you go down this rabbit hole of “15 Types and Credentials” of financial advisors you’ll end up quite dizzy and probably not have a direction to go in. I share it so you don’t feel like you’ve missed something, but I advise (pardon the pun) you to consider the idea this way:

Financial advisors have the ability to work with you like a coach for a sport, mentor in a professional setting, or a nutritionist trying to help you eat right. As my teacher on this topic Israel Heger explained, financial advisors ultimately work to enable people to conquer inertia and move them towards reaching their goals.

The way I see it, when you get on the phone with a financial advisor, grab a drink (when that’s safe), or just have lunch - you want to make sure you’re working with someone you trust and exercise good judgement. These are people you will share big life decisions/news with (often financial advisors are the first to know when you are expecting a child - maybe after some close family).

Dig Deeper:

Unsurprisingly, the crew at Investopedia provide some more particular credentials that are useful to look for from financial advisors (it can also be spelled advisers - those involved with NCSY, this might be where all of your naming challenges came from)
Researching the person who will do this financial advising for you is essential. Figuring out who they work with and what types of situations they deal with is essential. Yes, they do get paid for this work and the fee structure is something you should familiarize yourself with while you’re in conversation with them. Understanding that they do their job for money means you can hold them accountable for what they do. In most cases that means it’s a win-win, you save for your future and they can pay their bills.

There are other types of financial advisors. For example, some groups do work at the intersection of mental health and financial responsibility - these are items that are often intertwined and might be a part of a more holistic process.

What do these financial advisors do? For one, they give you a face of who is responsible for your money (in addition to yourself). You can ask them questions, and, if you’ve vetted them properly, you can be confident that they will keep your best interests in mind. Secondly, if you are in a situation where you have more finances available than a few hundred dollars (remember, a few hundred dollars becomes a thousand and beyond if you invest), you need more options for investment than simply putting the money into an ETF or two. While this next sentence might be an oversimplification, I write it to drive the point home. They are able to find investment opportunities that you otherwise would have a much harder time identifying if you were on your own. Finally, some financial investment operations will give you access to other instruments (life insurance, homeowners, and so on), which will take a more holistic approach to your financial health.

Takeaway:

While I’ve made mention of “robo-investing” and “portfolio rebalancing” in the past, getting into a conversation with a financial advisor will drastically open yourself up to taking your financial health more seriously. The robots, to be covered in a future issue, do help for smaller amounts of money and I use them myself (!), but I also think finding a time to meet someone who does this professionally is the “out-patient” procedure you can do to further motivate yourself on this financial journey. Again, just like a coach, nutritionist, or other type of expert that you rely on to improve your overall quality of life, at the least a conversation can help a tremendous amount.

Interact:

Have you ever spoken to a financial advisor? Either way, please respond to this email and let me know if you have or have not.

What more would you like to know about financial advisors?

Finally, I am not a financial advisor, but I am curious if people would join a webinar covering some topics and giving you a chance to ask questions. Please respond here if you’d be game.

Gratitude:

Israel was a super resource in preparing this episode and he’s happy to speak with anyone on this list interested in learning more. You can email him at israel.heger@nm.com. (I get no commission from anyone who reaches out to him, but you can send him my regards, I’m a big fan.)

In response to last episode about REITs we had a few generous comments/respondents:

Ben G and Tova P raised the question about the impact of Covid-19 and rent payments on REIT market. This article is a helpful place to start to see that it’s more complicated than a global pandemic will tank the real-estate market. In short, probably not for the long term and we don’t invest solely

Menachem G kindly commented about the asset class with this specific tip that I share here: “a good tip for when choosing a REITs that I have heard over and over is you want to invest in the management of the REITs and not the assets. look for a ones that have a successful track record to increase chances of sticking with a good one.”

Thank you Menachem B for pointing out the confusion between REITs and RIETS.

As always, feel free to comment in the COMMENTS section below, or just respond to the letter directly and I’ll feature your comments later!