The cost of financial planning
A lot of people assume financial plans and advisors are reserved for the super rich. And, honestly, most of them are. There are often exorbitant minimum requirements to even get a foot in the door. But the cost of financial planning for those in the 1% looks a lot different than it does for HENRYs.
If you’re making good money, you should know how to manage it. It doesn’t seem fair that 20-30 somethings should be turned away from financial advice just because they haven’t cracked the 7-figure threshold yet. But that’s the situation that most young professionals find when they seek out a financial advisor. It leaves them to figure this sh*t out for themselves, which in turn leaves them with two issues:
This stuff wasn’t taught in school.
There’s so much information on the internet, it’s tough to find credible sources. And even when you do, what you’re reading is general information that isn’t specifically customized to you.
What is a financial plan?
A financial plan is a map that shows where you currently are with your money and how to get where you want to be. And not just, “Save X amount for this many years and you can retire at 65.” Financial plans should take a holistic approach so that you have specific answers for how to achieve your short-, mid-, and long-term goals (including retirement). And really good plans should give you answers to the questions you don’t even know to ask.
If your financial planner is a fiduciary, WHICH THEY SHOULD BE, they’re looking out for your best interest and your best interest alone. No kickbacks to them, no not telling you about other options that benefit them directly, nothing but making your money do as much for you as it possibly can. Your plan will lay out exactly how this happens: from how your investments should be allocated based on your goals, to the best debt pay-down strategies, to, at Stash Wealth, how to optimize credit, credit cards, and reward points.
Is a financial plan worth it?
Trying to navigate your financial life without a plan is like trying to drive cross-country without Google Maps. Or worse, without Waze. You’ll get there – probably – eventually – but how many backroads are you willing to take? You can spend years trying to make the right financial decisions, probably getting a lot of things right along the way, but what about the things you’ve missed?
Whether you can afford a plan is not the question, it’s whether you can afford not to.
How important are your goals to you?
What is the cost of financial planning?
Want to put a number on it? Vanguard conducted a study that concluded, when managed well, advisors can add an additional 3% to your returns. Russell Investments estimated that number even higher at 3.75%. But it goes past that.
Confidence, specificity, and clarity. Along with knowing how to send your kid to college without them taking on student loan debt. Or pay for an entire vacation with credit card reward points. And even saving tens of thousands of dollars by properly refinancing. There are both quantitative and qualitative benefits to an all-encompassing financial plan.
What should a financial plan cost?
The average financial plan can cost as much as $3,500. And that’s just for a retirement plan. Not taking into account a big vacation, or setting up a 529 for your kids, or what you actually want to be spending your money on before 65 years old. And what if retirement looks different for you than the standard throw in the towel? We don’t know the answer for these guys.
But we do know that number feels a little too high to plan for one goal alone.
In our opinion, a financial plan should cost $1,000 for individuals and $1,500 for a couple and should include planning for all of your short-, mid-, and long-term goals. That’s why ours do. Book a call with a member of our team. We’ll qualify you over the phone and you can get a feel for how we do things around here.
Stash Wealth provides financial plans designed to assist high earning young professionals build and manage their wealth.
Stash Wealth offers a pragmatic approach to financial planning and wealth management. Whether saving up for Tahiti or a Tesla, we help you achieve your short-term and long-term goals.
Written by Stash Wealth Staff Writer
Stash Wealth Staff Writers are knowledgeable about personal finance topics. Their objective is to unravel the complexities of finance trade jargon, products, and services in order to equip HENRYs with a sound understanding of financial matters.