19Oct

New Financial Advisor? Here’s 4 Tips to Starting Your Financial Planning Practice

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A financial advisor career has multiple benefits, including good pay, great client relationships and learning galore. It’s an opportunity to engage in a highly respected field, and to provide a valuable service to clients who rely on your expertise.

I enjoyed being in the financial planning industry for several years and was privileged to serve over 200 clients in my financial planning practice.

Here are 4 tips if you’re planning to become a financial advisor that will get you started on the right foot:

1. Hire help immediately. This is one of the best decisions I ever made in my financial advisor carer. I immediately hired a college student to do paperwork and make phone calls. She was a lifesaver. With all the new responsibilities of being a financial advisor, this investment was well worth it for me.

2. Have a paper management system, and stick with it! Determine early on a paper management system that will work for you to keep all your important papers and documents in order. The financial services industry is heavy on paper, and it’s easy to get bogged down in a white mass of papers on your desk (and all over your office) if you’re not equipped with a way to handle all the paper that comes at you on a daily basis.

3. Set office hours and stick with them! Right up front, set your office hours. The beginning years of building a financial planning practice often mean long hours. There’s no doubt you’ll work very hard in the beginning, but you’ve got to give yourself time to rejuvenate and time for the other things in life that are important to you.

4. Determine early on who your ideal client is, then go to all the places they hang out. Become a speaker to those organizations. Frequent the places where your ideal clients can be found. This puts you in direct contact with potential clients without you spending a boatload of money on marketing.

A financial advisor career can be a rewarding one. Enjoy your new venture.

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17Oct

10 Questions To Ask Your Real Estate Investment Advisor – Part 1

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Whether you are an experienced investor or just a beginner, you should always beware of the guru who read a couple of books and armed himself with some general information. I’m not talking about the book and tape salesperson here, but rather the realtor, wholesaler or self proclaimed real estate specialist who is trying to sell you an investment property. Whether you’re buying a property or going into business with someone, you should always do your homework.

In this article, the first of two parts, I’ll offer some of the questions you should ask anyone before working with them.

1) Are you, yourself, an investor and how many properties do you own in the local area? If they answer “none” or say they just rent an apartment, run!

Watch out for the slick book and tape sales people who don’t own any investment property and know nothing about the local market. They will take your money and run. I met a new investor last year who had paid over $5,000 to attend a two day seminar taught by a guy out of California who knew nothing about the Atlanta market. Nothing good can come of that. Deal with locals who not only know the concepts but can help you find the right properties to invest in.

2) Can you provide me with a list of bank owned and foreclosed properties in my area?

If they can’t provide this, run!

If they can provide you a list, pick a property on it and ask this next set of questions.

3) What’s the property’s tax value?

This is a “DUH” question – if the Realtor or Investment Specialist can not give you the assessed value of a property, they need change careers. You would be surprised by the numbers of “PROS” that don’t even know where to start to look for that information.

Generally, the tax value or the accessed value put on a property in Georgia is typically 10 to 20 percent below the market value. When I start my search for possible deals, the first thing I look for is properties priced below the accessed value of the property.

Example #1

List Price is $200,000

Accessed Value is $220,000

This might be a possibility because I estimate the Retail Value of the house to be 10% higher than the Accessed Value or $242,000.

Example #2

Just reverse #1 – list price is $220,000

Accessed Value is $200,000

I probably would not consider this house because I estimate the Retail Value of the house to be $220,000 – no deal here!

Remember tax value is only one of the factors you should consider before buying a house but I consider it a good starting point. If someone is trying to sell you a property and they can’t provide tax value, it could be they don’t want you to know.

4) Can you give me a list of comparables in the area?

Another “DUH” question. Most Realtors can pull a Comparative Market Analysis (CMA) which will show the sales history for the past year to include the following categories: Sold, Expired, Under Contract, and Active Listing. Additionally, the Realtor should be able to provide a Area Market Analysis (AMS) which will provide the average Days On Market by category.

5) How many days has this property been on market (referred to as Days On Market, or DOM)?

If their reply is “I don’t have access to that information”: run. Any Realtor should know that information is available but finding it is the trick. Keep in mind the length of time the property has been on the market does not coincide with the foreclosure date. It could take 30 to 60 days after a property has foreclosed to get it listed with a Realtor and into the MLS.

Why are days on market important? The longer the property has been on the market – the more flexible the seller. Banks and other financial institutions are not in the property management business. Everyday expenses include loss of income, maintenance, insurance, and possible vandalism. I like to submit low offers on properties that have been on the banks books for over 4 months. Offer cash with a quick closing – you will be surprised how flexible the banks will become considering it may be the only offer they have received on the property.

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14Oct

The Very Best Investment Portfolio

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Before making a decision on what to invest in and what to avoid, a common investor needs to know that he or she has to do to find the optimum balance between risk and return. A lot of investors tend to take more risk for hope of a greater return, jeopardizing their capital. On the other side the extremely risk averse investors look for risk free investments only, eliminating the prospect of earning a greater return. The common investor also requires knowledge of the different types of investments he or she can make.

Formulating the optimum portfolio is all about choosing the right investments and appropriating the right proportion to each type of investment. So it is all about choosing the right investment mix to have the best investment portfolio. The different types of investments one can generally make are stocks, bonds and money market securities. These three types of investments make up the portfolio of any average investor.

A common investor cannot comprehend the reasons of fluctuations in stocks. Though investing in individual stocks and bonds has its appeal, it is not the preferred way to go for the average investor as he or she may not be able to pick the right stock in most cases. Therefore the safer way to go is to invest in stock funds. The same goes for bonds and money market securities and here you have the bond funds and the money market funds.

When you invest in stock funds instead of individual stocks, it means that you are dealing with money managers who pick the stocks and bonds for you to purchase along with a host of other investors. These professionals of course have a better idea of what to buy and what to leave. This results in greater returns on your investment.

The return on bond funds depends upon interest rates. Higher rates of interest will yield lower return on bonds and higher returns on money market securities. It is advisable not to make long term investments in bond funds due to the fluctuating nature the rate of return. Money market securities are the safest form of investment as they are completely risk free.

After settling the modes of investment, the investor needs to make the most important decision. That is, the investment mix which gives the maximum return or formulation of the best investment portfolio. Here we need to recall that stocks carry the greatest risk, followed by bonds while money market securities carry negligible risk.

Being to risk averse and putting the greatest proportion of your investment in the money market will yield the lowest return though it is the safest way to go. At the same time you should not be taking too many risks for a greater return. Applying the principle of diversification is the key to the best investment portfolio.

Summarily, to cut down on the risk of stocks, invest in a number of them. Do not forget to make investments in short term bonds and always put some amount in money market securities. Divide your investments across and within these three different types of investments.

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