Your success, in any area of life, is strongly determined by the people you surround yourself with. Not only do you require the support and encouragement of others to make meaningful progress, but you will often find yourself leaning on them for advice, as well. And as much as you may love and appreciate close friends and family, if you’re an entrepreneur, you simply can’t take financial advice from everyone!
While I’m a big proponent of taking an active role in your money management, there are several pieces of the financial puzzle that will require professional help. Having the right team in place can make all the difference in how you manage your finances and allow your money to work for you instead of against you.
Here’s a quick list of the small group of professionals who you may need to enlist to advise you on business and personal finance decisions:
1. Personal Finance Coach.
This may be a foreign recommendation, but trust me on this one. Its very difficult for a financial planner or advisor to do their job when a client lacks basic budgeting skill, claims they can’t find the money to save and is still struggling with emotional spending due to childhood issues, much less more complex details. The reality is, these professionals desire to work on more complex investment strategies and long-term planning. If you’re starting from scratch and need someone to hold your hand through the process, you should start with a coach that can help you set the foundation that makes life easier for the professionals up ahead.
When life isn’t too complicated and you choose to self-file a simple return, I get it. But an actual accountant can do a lot more than prepare tax returns. Some will help analyze your big picture and help you set up a system for managing and reviewing your finances. They can also keep pace with life changes that affect your taxes, such as getting married or divorced, having a new child or sending one off to college. The IRS doesn’t care about what you didn’t know when an audit hits, so get the advice you need upfront.
3. Estate-Planning Attorney.
While not the most exciting thing to think about, getting life in order to care for the loved ones you will eventually leave behind has to be at the top of your list. This professional will help assemble the documents necessary to ensure that things go smoothly when that inevitable time comes. These documents include a will; a financial and medical power of attorney, which let others make important decisions for you when you cannot; and in some cases, a revocable living trust, which lets your estate avoid probate among many other documents dependent upon your unique scenario. Again, you can do-it-yourself on sites like LegalZoom.com or RocketLawyer.com, but anything you anticipate to hold as legally binding should still at least be reviewed by a professional for accuracy.
4. Financial Planner.
A financial planner is an individual who helps you create a road map for your financial future. The planner works with you as the client to create retirement, tax and college plans according to your specific needs and the financial objectives for every phase of your adult life. By keeping abreast of new tax laws, current trends and market developments, a planner can assist you on a strategic level to create a road map for life.
5. Financial Advisor.
Financial advisors are commonly confused with financial planners. Most people use the titles almost interchangeably which is very misleading for the average person. A financial advisor deals specifically with investing. Their job is to advise you on how to best invest your money in accordance with the road map you created with your financial planner. Their primary function is simply guidance. For example, an advisor might guide you in finding the most tax-effective way to save for your child’s education. You can use the expertise of a financial advisor to assist with primarily market related investments. Most advisors are highly knowledgeable in the area of mutual funds, stocks and bonds, in addition to those who specialize in specific investment products.
Consider this one a bonus. No matter how old you are or what you’ve accomplished, everyone needs wise counsel; either someone who has the success you desire or who has been there, done that and will be transparent enough to tell you what mistakes to avoid. Once you’ve surrounded yourself with a team of the best consultants, coaches and confidants you can find, put a cherry on top and find a mentor that will help you stay clear of the costly mistakes you would more than likely make if left up to your own “bright ideas.”
Patrice C. Washington is the author of “Real Money Answers for Every Woman: How to Win the Money Game With or Without a Man” and the Money Maven of the nationally syndicated Steve Harvey Morning Show where 8 million listeners tune in for her weekly, upbeat and practical Real Money Answers segment. She went from a 7-figure business at 25 to scraping up change to feed her daughter during the 2008 Recession. She founded the Real Money Answers brand to help others who wanted real personal finance advice that works.