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How should I invest my money?

“How should I invest my money?” This is a question I have received from a couple of students who have come in to Powercat Financial to discuss their financial futures. It excites me when I talk with these students who are in the game and are already preparing for retirement. These students often have little to no student loans and are already looking to the next part of life. They are thinking strategically and wanting to build wealth for themselves and future generations. For those who are reading this post and are themselves about to graduate or are wanting to invest, I am hoping to inform you of professional organizations and websites who will help you find excellent professionals. These professionals can help guide and assist you as you plan for and journey through life.

The CFP (CERTIFIED FINANCIAL PLANNER™) Board website is a great starting point. This website has an excellent search engine designed to help you find qualified individuals who care about you and your future. The website helps you search for CERTIFIED FINANCIAL PLANNER™ professionals. CFP® professionals are individuals who have gone through rigorous education, ethics training, examinations, and have obtained experience within financial planning before they are able to use the CFP® designation.

The National Association for Personal Financial Advisors (or NAPFA) is another great organization helping consumers find financial advisors. Financial advisors who are members of NAPFA hold themselves to a standard of fee-only financial planning. Fee-only means these financial professionals receive no commissions on any products they provide. This helps, not insures, they will provide unbiased advice that is best for you, the client.
The third place to go when searching for a financial planner is the Financial Planning Association website. The Financial Planning Association is a large group of CFP® professionals. Much like the website of the CFP Board, this website can help connect you with CFP® professionals who are masters of their craft.

CFP® Professionals are held to a fiduciary standard. Fiduciary standard simply means the advisor will always act in the best interest of the client. Are you surprised? Yes, not all financial advisors are required to act in your best interest. All financial professionals are held to the suitability standard. This standard means they will always provide whatever is “suitable” for your situation, not necessarily what is best.

For those wondering how much a financial planner will cost, it depends. Some financial planners are compensated by a percent of the money you have them invest/manage. This is called assets under management (AUM). There are some financial planners who provide “startup packages” for young professionals. The financial planner charges a flat fee for developing a basic financial plan and helping the young professional gain solid footing for their financial future. Other planners are paid on commissions for products (i.e. mutual funds, insurance, etc.) they sell. The immediate cost of hiring a financial advisor may be high, but in the long run it’s worth it. Financial planners help bring objectivity to what can be an extremely emotional subject.
On an end note, invest time in finding a financial planner. This can be an uncomfortable, nerve wracking process. Work through these feelings and find a financial professional who you can trust. I recommend starting with those who hold the CFP® designation and work from there. You are entrusting your future into the hands of this individual, do not be afraid to ask them hard questions about how they are compensated or if they are a fiduciary advisor.

While Powercat Financial cannot provide specific investment advice, we can help prepare you for the next steps of your financial future. Our office can help you walk through budgeting and helping you understand some of your larger financial goals. To schedule an appointment with our office, you can go request a free and confidential appointment at https://www.k-state.edu/powercatfinancial/.

References:
http://www.letsmakeaplan.org/?utm_source=LMAP&utm_medium=header&utm_content=homepage&utm_campaign=header.
https://www.napfa.org/find-an-advisor
http://www.plannersearch.org/

Philip Wegman
Peer Counselor I
Powercat Financial
www.k-state.edu/powercatfinancial

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