For many young professionals, building wealth may seem like a topic geared more towards those who are planning for retirement instead of those who are in the early stages of a career. However, it’s never too early to start accumulating wealth. In fact, the earlier you start, the better off you’re going to be.
Investors today have a huge array of investment options. Many of these options can be too complex or difficult for the average investor to understand. Other options have specific investment and eligibility rules and regulations. While there are those who can successfully manage their money on their own, it helps to have a team of financial professionals available to guide you in making the best decisions. Having and utilizing these financial professionals can be referred to as “power investing”. The three main types of professionals that can yield the biggest benefit are financial advisors, personal bankers, and certified public accountants (CPAs).
Financial Advisors Help You Create a Plan for Financial Success
One of the most important services that financial advisors provide for young professionals is to help create a solid financial plan. The simple fact is that those who have a plan are generally more successful than those who don’t. Financial advisors can also help you with planning large purchases and making major financial decisions.
For example, an advisor can help you with the purchase of a house by determining how to best structure a property loan and how much of a loan you can afford based on your overall goals and financial position. They can also guide you in making other decisions, such as choosing the best time and way to exercise employer-offered stock options and developing strategies to reduce your taxes by using tax-deferred retirement accounts. As you get older, financial advisors can also help determine how much and what type of insurance you need, plan for your children’s education, and plan for retirement.
Personal Bankers Do More Than Help You Manage Your Bank Accounts
Once reserved as a service only for the affluent, many banks now offer personal bankers to any customer who conducts regular transactions and maintains minimum balances in their accounts. A personal banker manages your accounts similar to the way a financial advisor manages your investment portfolio.
Personal bankers stay up-to-date on interest rates, loan and mortgage options, and general banking trends. They can also provide you with information on other products and services the bank offers, such as special accounts and CDs. In addition, they can fast track loan applications, remove fees, waive minimum balance requirements and may be able to make exceptions to other banking policies. In these cases, building a relationship with a personal banker can be a huge benefit.
Certified Public Accountants
Many people are not aware of the differences between an accountant and a certified public accountant, or CPA. In short, CPAs can do everything that an accountant can do, but accountants can’t perform all of the duties of a CPA. A CPA is an accountant who has earned one of the highest professional designations in accounting by fulfilling specific educational requirements, passing a rigorous professional exam, demonstrating high standards of professional ethics and meeting other ongoing requirements as determined by each individual state.
CPAs are highly knowledgeable about tax issues and can be particularly helpful with minimizing income tax obligations. Many also have experience with financial planning practices and can work with your financial advisor to develop strategies and investment plans. CPAs must also earn continuing education credits to maintain their license, which means that they stay up-to-date on changes in accounting practices, regulations, tax code, and other relevant topics.
Financial Advisors, Personal Bankers, and CPAs Are the Foundation for Financial Success
In order to accumulate wealth, it’s important to align yourself with a team of trusted financial professionals. Throughout each stage in your life, enlisting the services of financial professionals can help you handle financial challenges and questions that arise and can keep you on track to help you meet your financial goals and avoid pitfalls along the way. And remember, the earlier you start, the better off you’ll be, financially, as you near retirement.
By Grant Webb with Bisk Education. Grant is a writer and learning facilitator with the Bisk Education’s 2012 CPA Review preparation program. Dating back to 1971, Bisk has been a leader in providing up to date information on Exam dates and blackout dates as well as helping accounting professionals become a CPAs.
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Category: Money Basics