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Category: Stocks

The 6 steps for a Good Financial Plan

My LGBT friends – let’s not be willy nilly about how we establish financial plans! Let’s be savvy folks who strive to have financial freedom! My goal is to help the LGBT community have a step up when it comes to investing and retirement planning!
The first thing to do when wanting to gain financial freedom is to come up with a financial plan. Here are the six steps:

steps

Credit Hakan Dohlstrom flickr
Establish a Relationship
You’ll want to find a financial advisor. Someone that you get to know, like and trust. Go interview someone. They’ll be interviewing you, too, to see if both you and they are a good match. Find out how long they’ve been in business. What their philosophy is. Check their history on http://brokercheck.finra.org/Search/Search.aspx FINRA is the governing body over investment folks. You can see if your potential advisor has any disclosures (bankruptcies, complaints, etc.) I suggest using someone who is a broker and an investment advisor. They are fully licensed to dispense advice. Also, strongly think about using someone who is independent and doesn’t work at a firm that uses proprietary products. There isn’t a conflict of interest between the client and the firm when it comes to giving unbiased investment advice.
Gather Information
After you find the advisor, you’ll need to gather all of your financial information. Investment accounts, 401k info, pensions, tax return, social security information. Your advisor will need that at your appointment.
At this appointment, the advisor will talk to you about goals and expectation. What do you want to accomplish? When? These will be quantifiable goals. They will also discuss qualitative goals such as your health, do your children get along well, do you have parents you make have to take care of in the future.
Analyze the Data
Next, your advisor will analyze the data. This is where the advisor takes a look at your big picture and sees where you are currently. She will look at your trusts, wills, budget sheets, tax situation, savings, investments and see where your strengths and weaknesses lie.
Presenting the Financial Plan
After the data is analyzed, your advisor will present you with a financial plan. There will be recommendations on where you need to shore up your portfolio, your life documents (wills/trusts), insurance, etc. They will show you where you need to improve your plan , why it will help and how you can resolve the issue.
Implementing the Plan
Once the plan is presented , and both the client and the advisor are in agreement to move forward, the plan gets implemented. A plan is great, but it has to be implemented to work! There may need to be involvement from other parties, such as CPA’s and Estate Attorneys for plan fulfillment.
Monitor the Plan
Ongoing monitoring of the plan is of utmost importance. An annual review is necessary to ensure that any changes in the plan are made if needed. If you have a major life change in between visits (moving, marriage, change of job) make sure to discuss this with your advisor to keep them in the loop!
Do you have a financial plan?
An ADPA (Accredited Domestic Partner Advisor) designated Financial Advisor can assist you with your choices if you need help from professional.
Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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Bonds, Corporate Bonds

Many folks out there think of stocks when they think of investing. Well, my wise LGBT friends, that is only one piece of the puzzle. One of the most overlooked investments is the individual corporate bond.

Drops
Photo credit: 55laney69

When a business wants to raise a large amount of money, they issue bonds. You purchase the bond and the company pays you a predetermined amount of interest (usually monthly, quarterly or yearly) for a set amount of time. At the maturity date of the bond, you get the principal back. So basically, you are acting as the bank and making a loan to a company.

Why own them?
Good question! Here’s the answer: They may help add stability to your portfolio. It’s nice to know how much interest you will receive and when you will get it. Plus when the stock market is volatile, you know you have a holding in your portfolio that is giving you a consistent return.

Here is an example:
A bond may pay 6% interest and has a 20 year term to maturity. That means that on a $10,000 investment you will receive $600/year x 20 years = $12,000 interest over the life of the bond, plus you get back the initial $10,000 that you invested. That’s a 120% return on your initial investment plus your principal back! (This is a hypothetical example for illustrative purposes only and is not representative of any specific investment. Your results may vary).

Other stuff you should know:
Sometimes companies have severe financial hardships or go bankrupt. If they do, they can default on their bonds, which means that you can lose your future interest payments and/or the principal that you put into your bond investment. So if you are looking at purchasing bonds, look at their credit rating. AAA is the best rating , anything that is BB+ or below is considered to be a “junk” bond and is very speculative.

Redemption:
Can you sell bonds early? Yep, you can. The value of the bond can fluctuate, though. It may be worth more, the same or less than when you purchased it. So if you do sell it before the maturity date, you may lose money or make money. Many factors can affect the price of a bond, including interest rate changes, credit quality of the company and what the stock (equity) market is doing.

It is best to speak to a financial professional before you venture into the world of bonds! See if they are right for you and your current financial situation.

 


 

Sharon_Herman_HeadshotSharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial, the largest independent broker/dealer* in the United States. www.silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment advisor and separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

*Financial Planning Magazine (June 1996-2013 based on total revenue)

 

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Buy Quality Investments

Hello my LGBT friends! I hope this blog post finds you well.

In my last blog, I spoke about getting a game plan together. Now I’m going to talk about investing.

My belief – buy quality investments and be well diversified.

QualityAndValue

Your underlying investment strategy will only be as sound as the investments you buy. You wouldn’t build a house on quicksand and expect it to be sturdy, right? Same goes for your investment portfolio. Have a good foundation.

When looking at stock type of investments, look for companies that have been in business for a long time (I usually look at companies with at least a 10 year track record) and have a history of increasing dividends. That may be a good indicator of a company with a good financial record.

Diversify!
Don’t buy stocks in just one sector. Spread the love!  You may want to pick companies from different sectors to balance out your portfolio. If you are starting out, I don’t recommend having more than 5% of your portfolio in any company. So even if you really like Coca Cola, Pepsi and Snapple, you might not want to buy all three of those companies. They do the same thing – make beverages.  If you do decide to buy all three of those companies, buy them in smaller amounts so that sector doesn’t go over 5% of your portfolio. Make sense?

Stock Sectors include:
•    Basic Materials
•    Conglomerates
•    Consumer Goods
•    Financial
•    Healthcare
•    Industrial Goods
•    Services
•    Technology
•    Utilities

To break it down even more, each sector has sub sectors –for example, Utilities include the sub sectors of electric, water, natural gas.

So remember, quality and diversify your holdings. Do you have a favorite stock?

An ADPA (Accredited Domestic Partner Advisor) designated Financial Advisor can assist you with your choices if you need help from professional.

Diversification does not guarantee a profit or protect against loss.

Past performance doesn’t guarantee future results.

 


 

Sharon_Herman_HeadshotSharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial, the largest independent broker/dealer* in the United States. www.silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment advisor and separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

*Financial Planning Magazine (June 1996-2013 based on total revenue)

 

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