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Questions You Should Ask When Looking for a Financial Advisor

Questions You Should Ask When Looking for a Financial Advisor

Choosing a financial advisor is an essential step in taking control of your finances. You’ll want to complete your due diligence before you even start talking to an advisor you’ve selected as a possibility. 

Find a financial advisor


If you have friends or family who are happy with theirs, you can ask for an introduction. But don’t stop there. Look at their website and social media sites. Most financial advisors should have a profile on LinkedIn.

In most cases, advisors who manage money and make stock, bond, and mutual fund recommendations must register with the regulatory agency FINRA (which used to be the NASD). You can look them up by name on BrokerCheck and see if they have any violations or complaints. 

If there’s more than one, you should probably move on to another advisor in your search. Most financial professionals have none, but a disgruntled client can make a complaint. However, more than one charge (or violation) is a worrisome trend.

Once you have a name or two that appear to be a good fit, you can start meeting with them and asking them questions. Feel free to write the questions down and bring them with you, because you want to make sure that you’re comfortable with the person you’re entrusting with your money.

For most investors, having more than one advisor doesn’t make financial sense. People sometimes aren’t sure whether they can trust one advisor, so they split the difference with two. Using two advisors causes issues with your portfolio since neither advisor has a full view of your money. With an incomplete picture, they may not be able to make the right recommendations.

Find an advisor you trust, by checking their bona fides and getting satisfactory answers from them. You may not invest all your money with them at once, but give them a portion to manage for at least a few months, to determine your comfort level with giving them more.



The financial advisor fit for you

Before you meet, ask if they offer a free consultation or “get-to-know-you” meeting. Good advisors usually don’t take all the clients who come to them. They want to have long-term relationships with the people who entrust them with money. 


You want to have a good relationship with your advisor. You need to be comfortable calling them if you have questions. If you feel that they don’t take you seriously or talk down to you, you won’t be able to build that level of trust you need to consult with them when necessary.


Your financial advisor should assist you with different financial decisions: buying a home, choosing a retirement community, saving for college, etc. Make sure you have someone with who you feel comfortable discussing your finances.


The relationship may not be a good fit, and it’s best to find that out ahead of time. If the advisor doesn’t offer free initial consultations, scratch them off your list and move on to the next.


Many people prefer to meet in person, but with the current COVID-19 restrictions, that may not be possible. See if you can set up a video conference so that you can see them and with potentially other members of the team. Just bear in mind that web conferences are a new technology for many financial advisors, so there might be some technical glitches at first.

Look for a fee only fiduciary

You want an advisor who tells you they act as fiduciary. This ethical promise is common in firms that are Registered Investment Advisors (RIA) and financial advisors who are also CFP® professionals. They are fee-only and must abide by strict fiduciary guidelines. 


A fiduciary is someone who has the legal duty to put your interests above their own. That means they have to recommend an investment right for you, and cannot receive product incentive pay or product commissions.


Advisors who are not fiduciaries have less restrictive suitability standards. That means they only need to recommend suitable products. They can suggest a product that pays them better over an equivalent that might be cheaper for you, as long as it’s suitable for your portfolio.

Financial advisor investment approach

  • What is their investment philosophy?

Depending on your risk tolerance and what stage of life you’re in, the financial advisor’s philosophy may or may not match with your own. When you’re young and looking for growth from your investments, you don’t want an advisor who says they’re conservative and focuses on protecting investments. You want a financial advisor to build a custom portfolio for your life priorities, time horizon, and risk profile.



  • Do they perform a risk assessment with their clients?

The asset allocation, or how much money is in different kinds of stocks compared to bonds, is an important indicator of how much and how volatile your portfolio performance will be. The best financial advisors will match your portfolio to your risk tolerance, within reason, so they need to know what your risk tolerance is.


If they don’t use a risk assessment with you, they’re most likely to use a cookie-cutter allocation for everyone. You may not get the performance you need to achieve your goals or take on too much risk for your time horizon. 

How does the financial advisor get paid?

There are many different ways advisors get paid, some of which come with conflicts of interest. The advisor should disclose all fees and methods of payment to you.

Fee-only is an excellent way to align the advisor’s incentives with the client’s. The more your account grows, the more your advisor’s compensation grows too. Many advisors use the Assets Under Management (AUM) model and get paid a percentage of the assets under management, which should be well under 2%.  

Or you may be charged on a retainer basis. 

The other model is commission-based, and you should steer away from financial advisors who are either 100% commission or fee-based with some investments on commission. Here you’re charged a fee for each transaction. There’s little to no incentive for the advisor to grow your account, and they do have incentives to keep you buying and selling, which is known as churning.

  • How often will you contact me?
    • Meeting schedules vary widely, and it’s up to you to decide if that frequency works for you. Typically, for accounts that are less than six figures, you should expect less contact and fewer meetings.


    • Who will have custody of my assets?
      • You want the advisor to have a third-party custodian. TD Ameritrade and Schwab are popular ones, but there are others. Having a third-party custodian provides you the ability to look at your accounts and see your account statements. Advisors who offer custody can make their account statements, structuring them in a complicated or misleading format.


        Without a third-party custodian, major crooks like Bernie Madoff got away with millions. He created fraudulent statements that showed the client making what he’d promised them.

      What are the financial advisors qualifications?

      There are websites where you can check what specific designations mean. If you’re starting out investing, you might be OK with someone else who has a bit less experience and is currently working on their qualifications, because they will likely charge you less.

      A financial advisor should have a minimum of five years’ experience, preferably through years of market volatility. Credentialed financial advisors, such as CFP Professionals must complete rigorous study and experience requirements. To keep their credentials active, they attend conferences and classes to stay informed and knowledgeable. CFA, CPWA and other credentials deepen an advisor’s knowledge and expertise to apply to complex planning and investing.

      Ideally, you want to see on the advisor’s website and hear from the advisor that they are familiar with your specific issue and that they’ve helped clients like you. 

      If you own your own business, you’re better off with an advisor who specializes in such clients because they know the typical problems and can help you solve them. 


      Interested in meeting with us for your initial consultation? Give us a call at 619.255.9554 or email us for an appointment.

      Investing for the Sandwich Generation

      Investing for the Sandwich Generation

      Our tendency to live longer means that many families are in the unenviable position of supporting elderly parents while preparing for their retirement and trying to send their kids to good colleges. 

      It’s impossible to get everything you want without an infinite supply of funds. But there are some reliable guiding principles. July is Sandwich Generation Month, a month dedicated to all the families struggling with this issue.


      Put on your own oxygen mask first


      We’ve talked about this principle before, particularly around the idea of self-care. It’s equally important when you’re trying to juggle your financial needs with those of others.


      Why do the flight attendants tell you to put your oxygen mask on first? Is it because they think your selfish, or they want you to be selfish? Is it because they think you don’t care about the others around you? Do they believe, without even knowing you, that you feel you’re more important than everyone else?


      It sounds ridiculous when put like that, right? You know why you need to put yours first: because you can’t help other people when you can’t breathe yourself.


      Your financial needs are no different. If you don’t secure your financial future, how can you help others with theirs? If you drain your resources to help your parents, you cannot help your kids. If you assist your kids, you may put yourself in the position of needing their help in the long run.


      Hopefully, by looking at the situation this way, you can see that it’s not selfish for you to want to prioritize your financial health before you try to support others with theirs. It’s common sense, not arrogance or unwillingness to help others.


      Get help when you need it

      There are a lot of services available for the elderly that your parents can use. You may need to research them. If you can’t spare the time to make all their meals or take them shopping, you’ll probably be able to find a program that will help them. 


      And even if you do have the time, make sure that you get a break. Caregiving is a wonderful gift that you give to others, and it is also emotionally and mentally draining. All caregivers need to be able to take breaks to recharge


      It’s not selfish to recharge your batteries. When you let them run down, you have nothing left to give to anyone. Keeping them charged is the best way for you to provide the care that you want your family to have. There are organizations specifically for caregivers that help with the mental and physical resources you need.


      Years ago, a friend (at the time in her sixties) whose mother had early-onset Alzheimer’s disease was the primary caregiver. Her brother agreed to pay her for the service she provided. 

      But because she took her mom to an adult daycare a few days a week, he wouldn’t pay for caregiver relief to come in so that she and her husband could go on vacation. This stress went on for years until her mother died of related complications. A few months later, she realized that she was displaying symptoms of the disease and that she had inherited it. 


      Imagine spending all those years unable to take a break and enjoy time with your spouse or children due to your caregiving duties. Then you spend more years unable to take a break and enjoy that time because of a disease that prevents you from doing so. 


      It would help if you took the vacation time that you get at work because rest and breaks are crucial to maintaining productivity, and even more importantly, joy in your life. Also, make sure that you get breaks and rest when you’re caring for a loved one. Renew your energy by spending time with your spouse and children too.

      Loans for school, but no loans for retirement

      On the other side of the sandwich, many parents feel the need to provide for their kids’ education in the same way that their parents did. Or because they recognize how important education is.


      You and your kids are in very different phases of life. Your own earnings years are either drawing to a close or decreasing. While your kids either haven’t started yet or just entered the workforce. They have the time to pay off loans that you don’t. Most of the time, when you die, your loans and debts stay live.


      Which means that you need to make sure you’re saving enough for retirement. You probably are already aware that Social Security is on somewhat shaky financial ground. However, it’s highly unlikely that people who have already paid into the system for decades won’t get anything. Currently, the program is fully solvent until 2035, but after that, it will be able to pay out only 75% of promised benefits.


      We’ve been here before, most recently in the 1980s, when one solution was to push back the age at which people could take normal retirement, from age 65 to age 67. There are other ways to fix Social Security, including paying the tax on all wages, not just the first $138,000. On the other hand, it’s probably not a wise course to decide that you will depend utterly on Social Security for your retirement either.


      Few workers have pensions anymore, so your retirement savings will be the bulk of what you live on in old age. If your balance is low, you have less time for the money to compound and you need to beef it up significantly. If you’re in the middle of your prime earning years (your 40s and 50s), you need to sock away as much as you can.


      That may leave less for your kids’ college educations, but they can take out loans. They can also look into work-study programs. Many families save by enrolling their kids in community college for the first two years, before transferring to a 4-year university. There are a lot of options when you’re not focused on specific institutions or specific degrees. 


      Be honest with your kids that they’ll need to contribute to their college fund. They might choose to supplement what you can give them with earnings from summer work, or save up birthday and holiday gifts. Get them involved in the future. Not only is it good for your wallet, but it’s better for them too.


      If you want to discuss how to balance out your sandwich situation, please give us a call at 619.255.9554 or email us for an appointment.

      Financial Decision-Making Under Uncertainty

      Financial Decision-Making Under Uncertainty

      As we discussed earlier (in the post about being productive while working from home), we’re all under a cloud of uncertainty. It’s not clear when people will start going back to work in the office. Or even if that will happen, since many employees likely will be working remotely for some of the time. Not knowing what will happen next makes financial decision making difficult. 

      So, how you can optimize your decisions even when the circumstances are unclear? Fortunately, we can implement some reliable strategies that work under any uncertainty, whether it’s COVID-19 or anything else that life throws your way. You can adapt them to both business and personal decisions.

      Take a deep breath to help ease anxiety and read on.


      Recognize the uncertainty to avoid trigger decision-making


      Sometimes people want to forge ahead with the decision making so they can take action. Humans tend to feel better when they’re doing something. Which is why so many end up selling their stocks when the market drops, because at least they’re doing something to relieve the anxiety of seeing their paper worth drop.

      (Remember that your actual portfolio doesn’t drop in value unless you sell and take the loss.)

      By acknowledging that you don’t (and can’t) have all the facts, you’re not resisting the logical part of you that knows this. If you don’t accept the situation, the side of your brain that understands you don’t have all the facts will be fighting every decision you make!

      “My lesson… is to start every meeting at my trading boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.” – Nassim Taleb, author of Fooled by Randomness, Antifragile and The Black Swan


      Examine all the options before financial decision-making


      You may already have some thoughts about which way you want to decide. But make sure that you’ve explored every possibility, no matter how remote. Sometimes just taking a contrarian viewpoint helps you understand the possible negative consequences of your preferred course of action. And the positives of taking a different route, so that you arrive at a better-informed decision.


      The best way to make sure you’re looking at all the alternatives is to involve other people. Have you ever seen contests with jars filled with some candy or other treats, and there’s a prize for guessing how many are in the jar? Any individual guess is highly unlikely to be right, but the average usually ends up extremely close to the actual number when they’re all combined. 


      Use the wisdom of crowds. Invite others to hash out the options with you. If it’s a business decision, get your colleagues involved. If it’s personal, friends, and family. If it’s a financial decision, talk to your financial advisor. When possible, include people that you know have differing viewpoints so that you can understand why they have a particular perspective, which could change your view of the matter.


      Spread out the risk

      As you know from investing, the more risk, the more opportunity from return. If you can take more chances, you’ll increase the likelihood that you’re right. Give yourself a higher probability of one of your choices being the right one.

      You can see this in the NFL. Research showed that over 14 years, the teams that ended up with two “lesser” draft picks performed better than those who had one high pick. They gave themselves more opportunities to do well with two players, rather than relying on just the one to carry them through.

      Talk to your financial advisor about how your portfolio is designed for risk. Your advisor should be able to explain the financial decision-making behind your investment allocations and selected funds in your portfolio. 

      Know you’ll be wrong and stay involved



      We’re all human, which, by definition, means imperfection. Therefore, make your life less stressful from the get-go by understanding that you’re not going to be right all the time. It doesn’t happen. Sure, you can make better estimates and better guesses about the future as you go along.

      Absent a crystal ball, you have no way of knowing whether you’re going to be right or not. If you expect that you’ll be wrong, it’s much easier to deal with when it happens.

      When you play it safe because you’re afraid of being wrong, you miss out on opportunities. Make room for error in your process, even as you do your best to reduce systematic ones.

      Venture capitalists know that three-fourths of the companies that they invest in will fail. So they often get involved with the management of the companies they buy. They help coach the founders and staff through the obstacles that arise. This involvement helps them mitigate the failure and learn what mistakes not to make in the future, even as they understand some of their portfolio won’t make it to the next round of funding.



      Decide to learn for better financial decision-making


      There are a couple of ways that you can use learning to make better decisions. 

      One is to reflect on the decisions you’ve previously made. Include the ones that came out poorly, and the ones that came out well. 

      Sometimes the result isn’t tied to the decision. You can make the right decision that doesn’t turn out well for various reasons, including luck. Or you make a decision that had a high probability of succeeding, but end up on the low end of the probability. Even good decisions aren’t guaranteed to come out well 100% of the time.

      Review your decision-making process separate from the result. Did you make the best decision you could under the circumstances? If not, why not? What did you learn from the experience?

      The second way to make better decisions is to run small tests or experiments before launching a full-scale version. 

      For example, rather than ramping up your entire production line for an untested product, run some online experiments to determine if your customers would be interested in such a product. And, importantly: what they would be willing to pay for it. If they’re willing to pay, but the price point is too low to be profitable, you can scrap the idea. Or tweak it into something that people would buy that would still be profitable to you. With modern technology, it’s easy to do this kind of testing.

      Or maybe you have a hobby that you’re considering monetizing. Instead of going full-bore on creating an entire line, make some prototypes and shop them around to make sure there’s interest in your items first.

      Ideally, of course, you use both techniques. Tests and experiments begin to help you make a decision, and then reflection afterward to pick up on any lessons you need to learn for next time.

      If you want to dive deeper into this topic, we highly recommend Annie Duke’s “Thinking in Bets.” This book allows you a peek into the thought process of one of the world’s most renowned poker players.


      Would you like Platt WM to help you crowdsource a decision? We’re happy to help our clients think through their business and financial options. Give us a call at 619.255.9554 or email us.


      Men’s Health: Live Longer With These Health Screenings

      Men’s Health: Live Longer With These Health Screenings

      Men tend not to go to the doctor for routine exams as often as women do, but it’s vital for them to catch potential health issues quickly. Poor health and health costs are the number one concern in retirement planning. And unfortunately, as people get older, there are more chances for health issues to crop up!

      Men need regular health screenings as they get older


      Many of the diseases and conditions that can result in a reduced life expectancy don’t have any symptoms. The only way you’ll know if you have them is to get screened. For example, there are no symptoms for high blood pressure. But if left unchecked, it’s a known precursor for cardiovascular diseases.

      In addition, when you’re able to catch conditions early, you can treat or even eliminate them. If you wait until lung cancer has metastasized to other areas of your body, it’s going to be difficult, if not impossible, to treat. However, if you catch it while the abnormal growths are still small and localized, you may be able to eliminate it completely.


      Men under age 50 health screening checklist


      • High blood pressure

      If you’re usually at a healthy blood pressure (at or below 120/80), you’ll only need this screening every two years. Otherwise, your doctor will probably recommend it every year.


      • Cholesterol

      If you don’t have risk factors or a family history of high cholesterol, put this on your calendar for every five years. If you do, you might need it done more often.


      • Diabetes

      If you’re age 40 or over and you’re overweight or obese, you need to take a diabetic screening. Your doctor may also recommend it if you’re at risk for either heart disease or type II diabetes; if you control your blood pressure with medication; or if your blood pressure is higher than 135/80.


      • Hepatitis B for men in an at-risk group

      Men who have non-monogamous, unprotected sex or are medical workers exposed to blood are at higher risk for contracting the infection. Your doctor will recommend how often you need to be tested.


      • Hepatitis C for men in an at-risk group

      The population at increased risk for hepatitis C are those who had blood transfusions or organ transplants before June 1992, are a medical worker who’s ever been stuck with a needle, or ever injected drugs. Your doctor will recommend a testing schedule.


      • STDs/STIs

      Unprotected sex with someone whose sexual/health history you don’t know? Get tested!

      Health checkups for men 50+

      Just as the recommended screenings for women seem to multiply past the magical age of 50, men also have some additional tests they didn’t necessarily require at a younger age.

      • Colorectal screening

      The schedule for getting these tests starts at age 50. Depending on which one you take, you may be able to go longer without repeating the test as long as the results are healthy. If you take a fecal occult or fecal immunochemical test, you’ll need to have it done annually. Repeat stool DNA every three years, and flexible sigmoidoscopy or virtual colonoscopy every five years. When you choose a colonoscopy, you may not need another for five to ten years.

      Colorectal tests are essential because they can catch precancerous cells in your colon or rectum, which might otherwise cause cancer. Removing the polyps can prevent cancer when you detect them early enough.

      How to choose among your options? Here are the pros and cons of each method.


      Fecal tests can be done in the privacy of your own home, as you’ll need to collect stool samples and send them to the lab. You may need to change your diet and medications before you take the test. They’re prone to false-positive results (where there is nothing wrong, but the test comes back positive anyway.) 


      Stool DNA, like the other fecal tests, doesn’t require sedation or a complete colon cleanse before the test. You don’t need to change food or medications before the screening, either. When you send your stool sample to the lab, they will check for DNA changes that might indicate abnormalities and also for blood. This type of test is not as sensitive as the colonoscopy for finding abnormal growths. 


      Flexible sigmoidoscopy uses a thin tube with a camera on its end into the rectum, where the lower colon (known as the sigmoid colon) and rectum are in view. Most people don’t need sedation, and the colon cleanse isn’t as thorough as that required for the colonoscopy. It won’t catch anything wrong in the upper colon, and you may need to change diet and medications before the test.


      A colonoscopy is performed by inserting a flexible tube with a tiny camera in it into the rectum. This type of screening is more sensitive than the others, allowing your doctor to view all of your rectum and colon. It also permits small growths to be removed at the time of the screening.


      However, it won’t catch everything, particularly very small abnormal growths. You’ll need to change your diet and possibly medications before the test because your colon has to be completely clean. You’ll be sedated for the test.


      A virtual colonoscopy is similar but without sedation or the scope. Instead, carbon dioxide is pumped into your colon via a small tube placed in your rectum. You’ll still need a completely clean colon for this test.


      • Lung cancer (ages 55+)

      Your risk for lung cancer is measured by pack-year. You should get the test if you smoked for 30-pack years: that’s one pack a day for 30 years, two packs a day for 15 years, three packs a day for five years, etc., and you’re still smoking, or you quit within the last 15 years.


      • Height & weight

      Measuring your height can be done every ten years, but weight annually to ensure that your body-mass index (BMI) isn’t too high.

      Enjoy a healthy retirement 65 and beyond


      Depending on you medical history, you may need specific doctor recommended tests. General health screenings that you should keep on your calendar include:


      • Abdominal aortic aneurysm for men who smoked 

      You need this test once. Though you may be wondering what this type of aneurysm is! It’s an enlargement of your aorta, and it’s dangerous because if it ruptures, you might die from the internal bleeding. Some aneurysms of this type stay small, others get very large, and they may or may not rupture.

      The most significant risk factor is from smoking, which makes it more likely that you’ll have one, which also increases the risk of rupture. Smoking weakens the walls of your aorta, which is the major blood vessel in your body.

      • Colorectal screening – you can discuss it with your doctor if you still need to do it. You might not need this test anymore.


      You may have noticed that there’s no prostate-specific antigen test listed. Doctors no longer recommend for men to get these screeners regularly.

      Enjoy good financial health


      We’re not the experts on medical tests, but we’re here to help with your financial health. 

      Our advisors at Platt Wealth Management are here to help you use your money in a way that not only enhances your life but the lives of others around you. Take control of your future education and give us a call at (619) 255-9554 or email us here for a review of your finances.

      What Do New Parents Need To Know About Estate Planning?

      What Do New Parents Need To Know About Estate Planning?

      A new baby can bring so much joy to parents and their families. In this season of new life, a million things are probably racing through your mind every second. Between baby showers, putting the finishing touches on the nursery, and stocking up on diapers and supplies, the days of a new parent are often busy— perhaps a touch chaotic. 

      When starting your new family, estate planning is probably the last thing on your mind. However, it’s important to realize that this process not only prepares you for your family’s current needs but future needs as well.

      Estate planning is vitally important for your child’s future, should anything happen to you or your spouse. Remember, estate planning is a complex process and you should consult your attorney and other financial professionals before making any updates to your plan.

      Here are our four top tips to help organize your estate plan as a new parent.

      Estate Planning #1: Adjust your will 

      Before adjusting your will, the first step is to actually have a will put in place. Your will is the cornerstone of your estate plan and outlines your wishes for your assets— among other things. 

      When you update your will, be sure to include two main areas:

      • Guardianship
      • Trustees

      As a new parent, you will want to establish a guardian for your children if you were no longer able to take care of them. Selecting the right guardian, while grim, is an important task. This person would assume the responsibility to raise and care for your children. 

      It’s important to choose someone who will not only respect your wishes and values but also be able to give your children the life they want and deserve. Before appointing a guardian, sit down and have an open and honest conversation with that person, as this would be a massive responsibility.

      Another important person in your child’s life is the trustee, which would be the person responsible for the financial requirements like taxes and managing any inherited funds. A trustee would pay bills for your child, file any taxes due, and may or may not give any remaining funds to your child over time.

      A guardian and trustee can be the same person, but they don’t have to be. If you do wish for them to be the same person, you can add another person to the will as a co-trustee. A co-trustee can help oversee financial matters alongside the trustee.

      While no other person would be a better parent to your child than you, it’s important to be prepared should an unprecedented event arise. When you have a will put in place, you are in control, not the court system. 

      Estate Planning #2: Revisit your beneficiaries 

      Beneficiaries are the people who inherit an account, policy, or asset from you. You have a beneficiary for insurance, investment accounts, retirement accounts (401k, IRA, ect.), bank accounts, real estate— essentially if you have an account, you have a beneficiary for it.

      You may want to name your child as a new beneficiary on your accounts. While considering that route, we strongly recommend that any beneficiary on an account be 18 years or older. Minors cannot control property, so in the event that they inherit the account, the court may appoint an attorney or another adult to oversee the account until the minor is 18.

      It’s important to note that a beneficiary designation is more legally binding than a will. Say, for example, you named a friend as a beneficiary on your bank savings account but in your will, it was left for your child. The official beneficiary, your friend, would be legally owed that money, not your child.

      Trusts can be a good option for children who are minors as trusts provide control over your assets in the event of your death. Your certified financial advisor will provide you with multiple options based on your goals and wants for your children.

      While it may not be top of mind, it’s good practice to review your beneficiaries periodically to ensure everything is up to date. Again, the more prepared you are now, the more control you have over the future.

      Estate Planning #3: Check on your insurance

      Remember that life insurance policy you’ve been putting off? Now is the time to get serious about it. A life insurance policy is another way to ensure that your family can take care of expenses in the event that something should happen to you or your spouse.

      The amount of coverage and type of policy you should have is dependent on:

      • The size of your family
      • Your net worth
      • Any debts or loans in your name
      • Future expenses for your family

      Generally, your life insurance policy should be 20 times your annual income, but that’s not always the case. A certified financial planner can help you choose the policy that will best fit you and your family’s needs.

      Estate Planning #4: Ensure you have a power of attorney, or two

      A power of attorney (POA) is someone who has the legal ability to make decisions on your behalf. For your estate planning needs, you will need to have two different POAs: a health care/medical POA and a financial POA.

      A medical POA/directive makes any medical decisions for you if you become incapacitated. It’s important that you have your healthcare wants clearly outlined in your will so your medical POA can carry them out as you wish. For example, whether you would or would not want to be on life support and for how long is something to put in your will.

      A financial POA handles any financial matters if you become unable to. This person would have access to your accounts and handle payments for debts, taxes, bills, and so on. A financial POA can be a partner, spouse, or anyone that you trust.

      Estate Planning #5: Rally together with your team of professionals

      Estate planning is a complex process— one that requires a strong, cohesive professional team to get right. While it may seem like an unpleasant topic, estate planning will help safeguard not only your financial security but emotional wellbeing.

      While your certified financial planner will be able to help you create a plan that’s unique to your needs, you’ll also need an estate planning attorney who you trust and can help you execute the documents in your plan.

      Here at Platt Wealth Management, we are passionate about helping you achieve your goals and we do that by putting your needs ahead of our own. Prepare for the best possible future and give us a call at (619) 255-9554 or email us here for a complimentary review.

      10 Things Your Children Need to Know About Money

      10 Things Your Children Need to Know About Money

      Money is essential to living in the US, so everyone needs to know the basics about finance. Not many schools teach the subject. You might have to be the one to teach your children money fundamentals, no matter their age. If they’re old enough to earn an allowance, they’re old enough to learn how to deal with it.

      We’ve arranged the concepts below from simple to more complicated. Kids today are often well-versed in TikTok and Snapchat but not money. As the parent, you’ll know where they are in terms of financial sophistication. How you talk to your kids can also differ depending on how old they are. The idea of a spending plan for a six-year-old shouldn’t be discussed at the same level as with your teenager.

      Your children should have a good understanding of most of these before they get to college (with the possible exception of retirement savings). Don’t worry if you missed that deadline, because it’s never too late!

      If you can, start early so your kids don’t get tempted by the credit offers that wash over college campuses. Or they don’t end up taking out $300,000 worth of loans to obtain a credential that would only generate around $40,000 per year in salary (true story).


      Spend Less Than You Earn


      Even young children can learn this at a very basic level. Suppose they’ve earned $5 in allowance money. Talk to them about setting some aside for later, maybe buying a gift for a sibling, and taking the rest to spend.

      This can be scaled up as necessary for older children. They might want to spend money to hang out with their friends.

      Plant the seed of spending less than you earn as early on as you possibly can, and water it regularly! Make sure the concept of saving is built in. Right away your kids understand that a portion of all earnings should be stashed away for later.

      Wants vs. Needs


      This is huge for helping children learn to live a financially comfortable life. Yes, your child needs a set of pencils for school. But they don’t need the super-expensive set.

      Yes, they need clothes to wear. But they don’t need designer outfits.

      Yes, your young child wants a lollipop, but they don’t need it.

      Help them make a list of what they need and what they want. You might be surprised at what goes in each category! Talk to them in an age-appropriate manner about making sure that their needs are covered before they spend on their wants.

      For example, you might expect your older children to purchase some school supplies or cover their own cellphone bill (or whatever), using their allowance or part-time job money. Be clear that they pay for these requirements first. Before they spend their money on other items like entertainment.

      Money as a Tool Not an End Goal

      You don’t want to raise a Scrooge McDuck who enjoys their money by diving into a pile of gold coins! Help them understand that the point of life is not to amass as much money as possible, but to lead a fulfilling life using money as a tool.

      With younger children, keep it simple. Do they like it when other kids don’t let them use their toys, but keep the toys all to themselves? Those kids are greedy, and no one wants to play with them.

      Children who see money as a tool and not an end in and of itself are less likely to be greedy and more likely to use it responsibly.


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      As a follow-up to avoiding greed, kids can be taught the value of helping others. Sometimes that’s a financial donation, but it often isn’t. A great lesson for this is to “adopt” a family at the holidays. Choose a family whose children are similar in age to your own, and have them help pick out the items needed.

      In addition to money, children can learn to donate their time. Make it fun! If they love the water, join in on a beach cleanup during the summer. There are plenty of organizations out there so you’ll find one that works for your family.

      Whether your family plans to donate money or time, talk to the kids about how they can determine if the charity is legitimate. How do you know that the money goes where you want it to go? When choosing the volunteer activity, they can also do (age-appropriate) due diligence.


      Set Financial Goals


      It’s highly likely that your kids, no matter what age, want something! They may not have the money for it. Teach them how to solve this puzzle.

      For young children, pick a goal that won’t take too long for them to achieve. For older children, if it’s a more expensive item, you might contribute some amount and then have your child save up for the rest.

      Sometimes, kids find through this type of exercise that the original goal isn’t quite worth saving all that money. That’s OK, and it’s a valuable lesson as well.

      Debt and Compounding Interest


      You might save this lesson for your older children. However, they definitely need to know it before they go off to college. They must understand that when they don’t pay off all the debt on a credit card, it grows higher than the amount they originally took out.


      You can probably find illustrations of this online. Most credit card companies now show on the statement how long it takes to pay off a certain amount of debt when only the minimum payment is made.

      Credit scores are also important for kids to understand. How too much debt makes it harder for them to buy cars and houses, and even rent apartments or get a job. Having a good credit score means using debt responsibly (e.g., paying off the credit card in full at the end of the month) and not having too much of it.

      Debt vs. Credit Cards

      Kids today aren’t necessarily familiar with checking accounts, so the difference between debit and credit may not be immediately obvious to them. Explain how the debit card draws from their account. And has no impact on their debt or credit score.

      By contrast, paying on a credit card leaves the money in their account alone. But if they don’t pay the credit card off at the end of the month, they’ll owe more than the purchase price.

      They also need to understand that this type of purchase could affect their credit score as well, if they’re not responsible about paying off the balance every month.



      Here’s another subject that’s probably better for older children. Not only income taxes on the money that they earn, but also sales tax on what they buy. They’ll need to learn that the price of the item on the rack isn’t what they’re going to pay at the cash register.

      A big misconception kids (and adults!) have about income taxes is that the tax bracket rate applies to all their income. Introduce the concept of marginal taxes, where the bracket rate applies only to the amount above a certain floor according to the tax code. Let them know what income taxes are used for: roads, fire departments, public health, and the like.

      If your child is earning money, whether it’s from YouTube videos or a part-time job, they should learn how to do their own taxes. My dad made me learn how to do mine back when there was no software. It’s a great life-skill for your kids to have, and they understand why the money they see in their account isn’t the $15/hour that was promised!


      Emergency Fund

      Before your child goes off to college, make sure they understand the importance of having savings they can draw on in case of emergency. One to two months worth of basic needs costs put aside is a great start.


      Retirement Savings

      One key concept to get across is the importance of saving for it ahead of time. Hopefully you already planted that seed with the idea of spending less than you earn, and the discussion of how compound interest works. This time, it’s working for them, not against them.

      Another is why tax-deferred accounts are so attractive. Most kids should probably be opening Roth accounts if they’re eligible to make retirement contributions, but at this stage you probably don’t need to get into the nuts and bolts of traditional v. Roth.

      They’ll need to learn about stocks and mutual funds. That a share of stock means they’re owning a share of the company they’re buying. Stocks are best for long-term investments, which is also important for them to know.


      They’ll need to learn about stocks and mutual funds. That a share of stock means they’re owning a share of the company they’re buying. Stocks are best for long-term investments, which is also important for them to know.

      Would you like to invite your adult children to your next planning session so they understand your plans and goals? Give us a call at 619.255.9554 or email us.

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