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Five Reasons Why Young Professionals Should Work with a Financial Planner

Robert DowdSeptember 7, 2018

Financial Planning

There is a common misconception that to work with a financial planner, you must have hundreds of thousands of dollars or be a couple of years from retirement. The truth is that many young professionals are working with financial planners to get a head start on taking control of their financial future.  Financial planners are educating these young professionals to establish good financial habits early, which will make sure they are prepared when transitions arise.

Financial planning is more like a detailed roadmap for your financial situation and future endeavors. It may be a long journey, but taking the necessary turns, and sometimes detours, will help lead to the goals set for you and your family. It is more than the proverbial pie charts, investment returns, and talking about retirement. It is a long-term partnership that involves knowledge, collaboration, attention, and most importantly, trust. Below are five reasons why young professionals should work with a financial planner.

Reason #1: Ready for More Than Just Paying Student Loans

“Money is a utility that we skillfully manipulate to navigate.” – Mitch Anthony

After graduating from college, chances are the main priorities in your life were to get a job, pay the bills, and make sure you do not default on your student loan payments. I had the same experience and felt my whole paycheck was used to slowly chip away at my student loan balances. As you gain experience and grow in your profession, you will realize there is extra income that you can save, or throw all of it at your loan balances, which is usually not the best tactic.

Money does not bring happiness. Using money and strategies to achieve our goals provides happiness. Think of it this way. When you drive a car, usually, you are headed for a certain destination. In financial planning, money is the engine of a car because it propels you through the road map to your destination/goal(s). The car is not the money because money is not going to carry you to the destination, the plan and strategy will take you there. In other words, you must control money, instead of the other way around. Working with a financial planner can help you avoid the mistake of allocating all your extra income toward one objective. Financial planners can help tackle multiple objectives and maximize your ability to reaching those goals for you and your family with a skillful strategy and facilitating the decision-making process.

Reason #2: A Lot of Changes Occur During Working Career

“Money goes in motion when life goes in transition” – Mitch Anthony

This roadmap is not a straight shot from graduation to retirement. There are many turns along the way and some are very significant, aka transitions. As you continue through your career, significant events, both personal and professional, will arise and need your attention. Some examples are getting married, having children, buying a home, saving for college, getting a new job, and many more. Sometimes multiple transitions will happen at once and make your head spin.

When transitions occur, some can be scary and intimidating. Financial planners will help navigate clients through transitions by settling nerves, reducing stress, and explaining options by producing a well-established strategy. We become more of a coach to guide you through the process, while at the same time we are like a therapist to help maintain your sanity.

Reason #3: Become More Informed About Your Options

“In life, it is better to prepare than repair” – John C. Maxwell

Having options is possibly one of the greatest advantages in life. You can compare multiple products and see which is more beneficial for you and your family, such as why a Roth IRA may be a better fit to a young professional because of their current tax status. Being uninformed can be very costly and repairing them may cause you to delay or eliminate some life goals. Working with a financial planner before transitions occur should be a priority to help saving time, money, and effort.

As a financial planner, we have your best interest in mind for any recommendation we present to you. We help you clearly understand your options, and the implications associated, such as explaining why saving early and often is usually a great opportunity for investment growth because of compound interest. Think of financial planners as the navigation system in the car. We provide the directions and inform you about road blocks before you reach them.

Reason #4: Need Help Properly Saving for Retirement

“As in all successful ventures, the foundation of a good retirement is planning.” – Earl Nightingale

Retirement is usually one of the top goals for individuals. Everyone works hard to make sure their retirement is attainable and not a pipe dream. It may sound like a simple goal to achieve or plan for, under the surface it can become quite complicated when you factor in all those working years and transitions that occur.

Realistically, on the financial roadmap, there may be more than one stop along the way and we must make sure the engine is working properly to make to journey. This is where you must look in the engine and make sure each component, strategy, is working effectively to make all of our stops. It is crucial at this point that the navigation, engine, and driver are all working together in unison. Doing so will help create a successful venture and help you call the financial shots later in life.

Reason #5: Long Term Relationship to Help Relieve Stress About Money Decisions

“Discovery is an ongoing process because people are always changing” – Unknown

There are multiple reasons why working with a financial planner during the beginning stages of your personal and professional career and these are only a handful. Financial planners have the technical knowledge to propose strategies, but we are also in the car to help you navigate the financial planning roadmap. When needed, we will hold your hand and take you step-by-step through a process in achieving your goals. We are here when you need reassurance and when you need redirection. We will be here during your lowest lows and celebrate with you during your highest highs. Our goal is to see you park the car at the end of your journey knowing you achieved everything you set out to achieve.

If you are in need of some help or guidance, feel free to reach out to us at Hoover Financial Advisors, we are always willing to help guide you in these important decisions. 

Sources:

For Millennials Goal is Financial Freedom

I’m Young, Do I Really Need a Financial Advisor?

Financial Planning for Millennials

Ten Wise Financial Planning Moves for Millennials