Remember how in your teens you would store money at various places rather than keeping all in one purse to ease up on spending? That was your toddler step to financial management. But ones you start earning, various expenses come to your way inevitably. House rent, taxes, insurance, personal expenses, and so on may not allow you to save up a lot at the end of a month. But a person who understands finances better would end up saving more. This is where the role of a financial advisor comes.
A financial advisor is someone who will suggest you the best practices to manage your finances so that you save more in your limited money pool.
How does that work?
- He will estimate your current financial status in detail, including the assets that may have a potential long term return value and your capability to grow.
- He will determine your goals for the next ‘n’ years or months. Say you want to make an extra $500 dollar in the next 6 months.
- He will prepare an extensive plan to minimize your future expenses like college selection, house loan rates, best insurance policies to sign up for, and methods of tax avoidance.
- He will suggest the investment strategies best suited to your goal and also minimize risk.
Now people have become more conscious of their money than ever before, investing money to grow assets is trending. But investing is not everybody’s cup of tea. It is easy to get lost in the pool of options. Somehow in an attempt to make quick money, we end up making the wrong investment that causes more loss than gain. A financial advisor can help make the right choices.
Should You Hire a Financial Advisor?
It’s a genuine concern as these professionals do charge a good amount to keep a check on your finances. You will find a financial advisor in Bay Area charging around $200 to $400 per hour or 1-2% of your assets under their management in a year.
But there are some perks to this. You must be kidding to think that a 1 hour YouTube tutorial would be enough to learn about finances and manage on your own. The economy of a country keeps evolving. The price of a commodity now is not as same as it used to be 5 years back. Inflation plays an active role. There are a lot of other factors to be taken into consideration and see things from various perspectives to get an idea of how money flows. Your financial condition and economic activity are directly connected to the country’s economic status. That in turn controls a lot of other things which will affect you like the taxes and bank interest rates.
To sum it up, it is a complex cyclic process. You may not want to spend too much time to wrap your head around it. When the transactions are small, they can be managed on their own. But when you are dealing with big numbers, it is advisable to hire a financial advisor in Bay Area to transfer the headache.