When it comes to your financial future, here’s the deal: You’re on your own. Pensions are going the way of the parachute pants (remember the 80’s). Social Security is looking more shaky by the day. Our healthcare system is being held together by duct tape. In today’s environment, you must be a realist and admit that you’re going to have to take control and create your family’s financial security (with the help of a few financial friends). You can read about the the first two financial friends here and here.
Over the past two days we have explored a few essential financial friends we all will need at some point in our lives. If you desire to build wealth, today I’m encouraging you to consider adding a third financial friend:
A FEE BASED FINANCIAL PLANNER
Making financial decisions is difficult. Make the wrong decision could prove disastrous and may set you back a few years. There’s a lot you can figure out on your own, but all of us can use help when it comes to something as important as how to save, invest, and plan for the future.
Get References
A reference from a friend or family member is a great way to search for a financial planner. But make sure you’ve got similar needs as the person who’s giving the referral. Go to groups like the Certified Financial Planner Board of Standards and the Financial Planning Association for additional references.
Understand how your planner is getting paid
The three most common set-ups are: Fee-only, fee-based, and commission-based. Fee-only planners don’t get commissions for the products they sell – fees are for the advice they give (my personal preference). Fee-based planners may receive commission on some products they sell, but most of their money comes from a fee you pay them. Commission-based planners are paid by the companies whose products they sell.
“When Black Enterprise unveiled its Declaration of Financial Empowerment nearly a decade ago, the idea was to create a program to help African Americans build wealth.” The principles are solid and transcend race, gender, and ethnicity. If you desire to build wealth, today I’m encouraging you to consider adding a second financial friend:
A TRUSTED MORTGAGE BROKER
What exactly is a mortgage broker?
Simply put, a broker is a middleman who helps you find a good deal on a mortgage loan. A mortgage broker does not work for a particular bank or lending institution but rather shops around to find the best terms.
Should you be using a mortgage broker?
Well, a broker can be helpful in certain situations, especially if you have a poor credit history and are having a difficult time finding a lender. A knowledgeable and experienced mortgage broker can find lenders who are willing to do business with you and can even help make your case when your financial history is, shall we say, less than perfect.
In exchange for doing the mortgage shopping on your behalf (and for assisting you in understanding the various terms and paperwork involved in the mortgage), a broker will get a commission. Typically, this commission will range between 0.5% to about 2% of the loan amount that you decide to borrow.
Finding and picking a trusted mortgage broker is no easy task. Solicit references from friends, family members, and your networks. Additionally, you can Google “how to find a mortgage broker” and sort through the links.
So, how are you doing? Do you have a trusted mortgage broker on speed dial?
There is no such thing as a perfect friend. They are all human and everyone is alike in some sort of way. Be like me. Don’t limit yourself to one set of friends. Be friends with everyone.
According to Black Enterprise Magazine, “there are seven financial friends everyone should have on speed dial. Economists & academics believe that at least part of the wealth disparity between African Americans and White Americans in the United States can be attributed to the persistent distrust of financial institutions among a larger number of African Americans.”
The first financial friend we all need is a PERSONAL BANKER OR BRANCH MANAGER
Many borrowers spent most of the time focusing on their credit application and forget to build additional resources to help them qualify. What does it mean to develop a meaningful relationship with your personal banker/branch manager? It means to attempt to develop a deeper level of rapport with the person on the other side of the desk. If you can befriend your banker it means it will have an emotional investment in helping you and your application.
This does not mean that they will violate lending policies or commit fraudulent acts, but if the deal needs a little massaging to make it work they will commit resources to get it done. You can establish a better relationship with your personal banker is simply through respecting their time and treating them with some common courtesy. You can also go the extra mile by calling them on their birthday, asking them if they want coffee at your next appointment together or contacting their branch manager when they’ve done a good job and singing their praise.
Have you established an authentic relationship with your personal banker or branch manager?
People all over the country are choosing to move their money out of bigger banks and into smaller, community-oriented financial institutions that generally avoided the reckless investments and schemes that helped cause the financial crisis.
Fueled by the personal initiatives of thousands, it’s a grassroots effort that has the potential to shift power in the financial system away from Wall Street and to Our Street. Keith Olbermann of MSNBC got behind the Move Your Money campaign on his show. He believes: “It’s time to make those Too Big To Fail banks just a little bit smaller by moving your money to a local credit union or community bank.”
Stephanie Frost decided that she had been mistreated at her big bank for too long and enough is enough — she’s switching to a small financial institution. She filmed herself going to close her account and posted the video to YouTube:
Dr. Reynaldo Anderson, my fraternity brother posed this question on Facebook: What would happen if churches got behind this movement? As I pondered that question, I estimate church goers give BILLIONS to their churches each year.
Additionally, I’m sure most of it is deposited into bailed-out banks – the same banks that refuse to lend to our members & their small businesses. Imagine what would happen if Protestants, Catholics (net worth estimated @ $1 trillion or more), & all other religions were to band together and MOVE OUR MONEY! I guarantee they’ll call us in for a congressional hearing.
Many people believe Michael Moore is the most dangerous man in the world. Personally, I like him because he’s funny & annoying to the powers that be. He is an Academy Award winning filmmaker, author, and liberal political commentator. He is the director and producer of Bowling for Columbine, Fahrenheit 9/11, and Sicko, three of the top five highest-grossing documentaries of all time.
Michael Moore’s next film, Capitalism – A Love Story explores the root causes of the global economic meltdown and takes a comical look at the corporate and political shenanigans that culminated in what Moore has described as the biggest robbery in the history of this country – The massive transfer of U.S. taxpayer money to private financial institutions.
Personally, I can’t wait to see Michael’s new movie. It’s time for people to stand up against greed and hypocrisy and let their voice be heard. Thanks Michael for keeping the heat on!
The opening sentence of A Tale of Two Cities, by Charles Dickens, referring to the time of the French Revolution describes the economic reality of today. The question that’s on everyone’s mind, but, seldom asked is: How are you doing? The answer depends on your individual circumstances, of course – but also on your perspective. The glass is either half full or half empty for many of us today. This morning when I woke up, my first emotion was profound gratitude. Even though my financial worth had been decimated by the events of the last three months, I realized that nothing could touch the things that are most valuable to me.
I also realized that I have a choice: I can focus on what I have lost or I can focus on what I have. I started making a mental list:
I have my health.
I have a loving wife, who is also my best friend
I have three wonderful children. “I am particularly fond of each of them,” as Papa says in The Shack.
I have several profound friendships that encourage and challenge me.
I have meaningful work that I would do even if I wasn’t getting paid.
I have incredibly competent co-workers whom I truly love and respect.
I have a church that grows dearer to me with each passing year.
I have a relationship with God that is endlessly fascinating and fulfilling.
And the list goes on. I could name a hundred more things, but you get the idea.
My guess is that the Economic Downturn is going to get worse (I pray I’m wrong) before it gets better. You and I have very little control over what happens in the external environment. But we do have control over what happens inside our hearts. It all depends on our mental focus.
Question:
What do you have that the Economic Downturn can’t touch?
FYI – I want to thank my friends from Facebook for sharing their tips. If you would like to read more, please click here.
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