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DIY Investing – Do you Need a Financial Advisor to Start Investing?

January 8, 2019

Are you thinking about investing to turn your dollars into even more wealth? If you are looking into ways to invest your funds, there are a few ways to do it. One way is to hire a financial advisor to provide financial services, but some people like to try investing on their own with some DIY investing strategies. Either way, here are some things you should know.

 

Types of financial advisors

There are several different options for financial advisors. Each type of financial advisor has strengths and various fees for service. You’ll want to pick the right financial advisor based on what you’re looking to do with your money, may want to pick a specific type of financial advisor. Let’s review what each type of financial advisor does.

 

Accountant

An accountant or CPA can help with several different situations and types of knowledge. For instance, an accountant could help you hire and pay a nanny or do your taxes. They might specialize in certain things like being an entrepreneur or freelancing. Make sure you meet and vet your potential accountant to ensure they can do the type of advising or planning you need.

 

Investment Adviser

This type of financial adviser is someone who can advise you on various types of securities either as a single consultant or as part of a larger firm. They are registered professionals through the Securities and Exchange Commission (SEC) or other applicable state agencies and have to have a securities license to actually sell securities products. This might require a licensed securities representative, like a stockbroker, to make the transaction happen.

 

Stockbroker

A stockbroker is someone who is typically licensed by a state to sell stocks, bonds, mutual funds, and other types of securities. These financial professionals usually earn a commission on their transactions, which is how they make money. There’s quite a bit of regulation for the profession including organizations like the Financial Industry Regulatory Authority (FINRA).

 

Financial Planner

Financial Planners or Certified Financial Planners (CFPs) are often employed or certified through larger agencies or even global companies that offer their own types of accounts and services. They can help you work toward a number of different financial goals based on a large spectrum of products. They might advise you about retirement, short or long term investing, saving for education, or managing other financial assets. They make money either based on fees or on commissions from the products you buy through them.

 

There are other options like Estate Planners, Attorney, and Insurance Agents, but they tend to deal with more specific financial situations and less with broad investing knowledge.

 

A really important factor in picking a trusted financial advisor is looking at their expertise, reputation, and how well they fit with your personality and service needs. Don’t pick an advisor who is only available 9am-5pm if you work long hours and prefer to visit in person, for instance. For example, if you’d rather talk via email or use online tools, old-school professionals with a smaller operation might not have the digital infrastructure you’re looking for. Similarly, you want to work with someone you trust, so make sure their demeanor is a good fit for you.

 

If you decide that a financial advisor is not for you and instead you want to do your own investing, you also have several options for how you can approach investing.

 

DIY Investment Strategies

Brokerage Accounts

Brokerage accounts are a way that people can try their hand at DIY investing.  You’ll need to set up an online brokerage account first. Once your online account is set up, you can do research and look into what experts are saying about different companies. Look for advice as to what to buy or avoid, keep or sell.

 

Apps

There are lots of different types of investing apps. You can try something simple that rounds up your debit card purchases and automatically invests very small dollar amounts called micro-investing, for instance. You might want to try your hand at an app that allows you to trade stocks. Some apps have higher fees than others or are paid apps while a few offer free trades. A different type of investing app that you can try would be one that focuses on your retirement, allowing you to move money around for your retirement funds. There are lots of options! Just be sure you look at the fine print and read reviews to see what kinds of experiences other people are having and what the legal details are.

 

Other Online Tools

Various websites and types of software exist to both help you research investing and to facilitate online transactions. Just like apps, there are lots of options based on the type of investing you want to do and how you want to do it. Just do your homework and look for reputable tools before you get signed up.

 

Pros and Cons

With something like an app, you avoid the fees that come with some types of financial advisors. On the other hand, you don’t get the personalized attention that financial investor can offer you. If you invest for yourself, you have a lot of control and can potentially save money on fees again, but you also run the risk of making some expensive financial mistakes if you don’t know what you’re doing. Make sure you know the pros and cons of any of these DIY investing strategies before you start so you don’t end up between a rock and a financial hard place.

 

Tips for How to Invest Smart

Investing successfully can be really challenging, which is why people should start small. Don’t invest a bunch of money in risky stocks hoping to make a quick fortune. Instead, set aside a small fund to use for investing and start watching and learning before you do anything. If you can’t afford to lose money, go with more stable investments that will earn less but also likely won’t lose much if anything. Logic is a far better guide than emotion when it comes to investing. Sure, a hunch might make someone rich, but plenty of people have lost fortunes to their hunches. The math works out in your favor if you look at logical options and stick to a smart plan.

 

Avoid These 7 Money Mistakes

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2019-10-15
Best Apps for Budgeting in College

Managing money is hard, but budgeting in college? That’s a whole different ballgame. For a lot of students, you have so much to worry about with classes, work, and other involvements that finances often slip your mind. So how do you hold yourself to a budget when you can barely remember to feed yourself dinner? Luckily, we live in an age full of apps to help you get a jumpstart on budgeting and money management. Here are a few of our favorites.   Mint®. Mint is a free mobile app where you can view all of your banking accounts in the same place. It automatically updates and puts your transactions into categories so you can see where all your money is going - and where it’s coming from. It also recommends changes to your budget that could help you save money. Its features include a bill payment tracker, a budget tracker, alerts, budget categorization, investments, and security features.   PocketGuard®. Like Mint, PocketGuard allows you to link your credit cards, checking, and savings accounts, investments and loans to view them all in one place. It automatically updates and categorizes your transactions so you can see real-time changes. PocketGuard also has an “In My Pocket” feature that shows you how much spending money you have remaining after you’ve paid bills and set some funds aside. You can set your financial goals, and this clever app will even create a budget for you.   Wally®. This personal finance app is available for the iPhone, with a Wally+ version available for Android users. Like other apps on this list, it allows you to manage all of your accounts in one place and learn from your spending habits. You can plan and budget your finances by looking at your patterns, upcoming payments and expenses, and make lists for your expected spending.   MoneyStrands®. Once again, with this app, you’ll have access to all the accounts you connect. Its features allow you to analyze your expenses and cash flow, become a part of a community, track and plan for spending, create budgets and savings goals, and know what you can spend without going over budget.   Albert®. A unique feature that Albert emphasizes is its alert system. When you’re at risk for overspending, the app will send you an alert. The app also sends you real-time alerts when bills are due. Enjoy a smart savings feature, guided investing, and the overall ability to visualize your money’s flow and create a personalized budget.   Before you download any budgeting app, make sure you check out the reviews and ensure it’s legitimate. Because a lot of apps ask for your personal financial information, it’s essential you verify their legitimacy before entering your account number. Listen to what other people have to say and then choose the option that works best for you, because not every app will be perfect for everyone. Budgeting in college may be hard, but downloading an app is just one way you can make it easier. Maybe you don’t want to use an app at all. If you’re in that boat, you can check out some other approaches to budgeting here or here.   Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.
Woman sitting on floor looking at laptop computer
2019-10-14
Motivating your student to apply for scholarships

Do you find your child lacking motivation when it comes to finding grants and scholarships? While some students are intrinsically motivated and will search out and apply for scholarships on their own, other students may need a little encouragement in order to accomplish these tasks. While it can be frustrating, it's important to remember that this is likely the first time your child has had to navigate financial waters. Because of that, we're sharing some simple ways you can motivate your child to apply for scholarships before and during their college years.

Discuss college costs and finances with your child.

Your student may not fully understand how much college can cost. Hold an honest discussion with your child where you review the costs of their top college choices, how much money (if any) you will be able to contribute, the significance of
creating a college budget, the realities of student loans, etc. While they may be more focused on which clubs they'll join and their newfound freedom, helping them understand the importance of financial help can make their college year much more enjoyable.

Share scholarship success stories.

Sometimes, all it takes to motivate your student to apply for scholarships is sharing how their peers are reducing the cost of college. Ask other parents which scholarships their child was able to secure, and even let your child know the lump sum their friend was able to save. Take note of the steps each student performed in order to obtain the scholarships and go over with your student ways they can implement strategies into their application process.

Assist with developing a scholarship organization plan.

When it comes to applying for college scholarships, it pays to be organized. From deadlines to account passwords to application requirements, your student will have a multitude of details to remember. Developing a scholarship organization plan will help deter your child from becoming overwhelmed, which in turn will motivate them to complete applications. Share these organization tips with your child to make the process of applying for scholarships a little easier.

Provide incentives.

Using extrinsic motivators, such as rewards, can prod your student into action. Just as you may have bribed your toddler during the toilet training phase, that same concept should work with your teenager. Consider making a deal with your child that if she applies for a certain amount of scholarships, then you will provide half of the money so she can purchase that new phone or outfit for which she has been saving up money.

Give your child a free pass.

Most teens would gladly give up their household chores to complete other tasks, even if the task involves academics. Allow your child a free pass on chores if they use that time to search out and complete scholarship applications.

Set realistic goals.

If you expect or nag your child to spend most of her free time looking for scholarship leads and filling out applications, no wonder they aren't motivated. Work with your student to set realistic goals for the number of hours spent each week on the scholarship application process.

Acknowledge and encourage your child’s efforts.

Positive encouragement can work wonders to increase your child’s motivation. By letting your child know that you have seen and appreciate their efforts to apply for scholarships, you are giving them the confidence they need to continue applying for more. For more information about scholarships, be sure to read the scholarships and grants from our friends at eCampus Tours. Your teen can also perform a free scholarship search by clicking here.   Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.
Couple sitting at table on the computer
2019-10-11
5 Financial Tips for After You Refinance Student Loans

The process of refinancing student loans can be like studying for finals: you prepare for weeks, the stress keeps you up at night, and once the big day finally passes, you feel a huge sense of relief. You might even go out with friends to celebrate. But like college, you can’t just forget what you learned. You have to apply that knowledge to the next step.    When it comes to refinancing student loans, the next step is to continue honing your financial savviness. Find other ways to reduce and quickly pay off debts so you can start spending money on the things you want, instead of the things you need! Below are five tips to consider after refinancing student loans. 

Pay Down Other Debts

Take the extra amount you paid toward that student loan and apply it to other debts. With a $50,000 loan at an 8% interest rate, you could owe approximately $480/month for 15 years. Your total interest over the life of the loan is $36,000. But if you’re able to reduce that interest rate to just 6%, your monthly payment drops to $420/month and the total interest paid is $26,000. What could you do with an extra $60/month? What could you do with an extra $10,000 over 10 years? A lot.    Consider all the types of debt and ongoing expenses you have that you could apply that $10,000 toward:
  • Credit cards
  • Car loans
  • Home loans
  • Medical bills
  • Childcare
  • Cell phone bills
  • Utility bills
  You can also opt to keep that extra money aimed at your loan. Refinancing student loans often establishes terms with no prepayment penalties. So paying off loans faster can alleviate the burden of debt. This can take many forms, including:
  • Make an extra payment: In addition to your minimum monthly payment (12 payments a year), consider an extra payment every few months. In the example above, if you save $60/month on your refinanced student loan, you will have enough money for a whole extra payment every 7 months, with no additional work done on your part. Just a little saving!
  • Pay more than the minimum: If you don’t want to worry about orchestrating extra payments, overpay during each regular monthly payment. By going above and beyond the minimum payment, you’ll keep from accruing as much interest on your principal balance. Going back to our example again, if you were to keep that extra $60 applied to your monthly payment of $420 (for a total of $480), you could pay off your loan 2–3 years earlier at a savings of $5,000. It might seem tempting to use that extra $60 as play money right now, but $5,000 could be an even bigger play day in the future!
  • Make single lump-sum payments: Use your tax return, annual bonus, or an inheritance to make lump-sum payments toward the principal balance on your refinanced student loan. Again, the mindset here is to pay off that loan as fast and comfortably as you can.  

Negotiate Other Bills or Debts

Don’t stop while you’re on a roll. Once you secure better terms for your loan, find other ways to lower your bills. Use that financial savvy you picked up refinancing student loans, and negotiate with other debt collectors. This negotiation isn’t limited to loans—you can often get better rates with your cable and internet provider too.    You also likely have a dozen or more automatic monthly payments coming out of your checking account or linked to a credit card. Some banks or apps like
Truebill® and Trim® can help you find and cancel subscriptions that are unused or that you forgot you signed up for in the first place. What started as $60/month saved could possibly turn into $150/month after canceling unused subscriptions. 

Consolidate Credit Card Debt

You can consolidate loans, but did you know you can also consolidate credit card debt? If you have multiple cards that you owe money on, you can roll those cards into a single loan. Depending on your credit score and other factors, a consolidated loan can have lower interest or a lower, more achievable payment. You could also take out a personal loan with a lower rate to pay off cards directly with the credit card company.

Keep At It

Refinancing only sounds like the hard part. The real challenge comes after you sign the papers. Getting a new interest rate and a new loan term won’t save you money if you don’t make on-time payments and pay off your loan according to those new terms. Adult life has a lot more things on its to-do list. Set up automatic payments so you don’t risk forgetting. At the very least,   set monthly reminders in your calendar app to write a check or manually process your payment. 

Tell Your Friends

ELFI offers options for student loans and refinancing student loans. But did you know ELFI also has a referral program1 that can help you make (and save) even more money? Sign up and create a personalized referral link to share with friends or family. When someone refinances using your link, you’ll get a $400 referral bonus check and your friend will receive a $100 credit toward the principal balance of an Education Loan Finance loan. There’s no limit on the number of people you can refer. Learn more at elfi.com/referral-program-student-loan-refinance.     Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.   Terms and conditions apply. Subject to credit approval.   1Subject to credit approval. Program requirements apply. Limit one $400 cash bonus per referral. Offer available to those who are above the age of majority in their state of legal residence who refer new customers who refinance their education loans with Education Loan Finance. The new customer will receive a $100 principal reduction on the new loan within 6-8 weeks of loan disbursement. The referring party will be mailed a $400 cash bonus check within 6-8 weeks after both the loan has been disbursed, and the referring party has provided ELFI with a completed IRS form W-9. Taxes are the sole responsibility of each recipient. A new customer is an individual without an existing Education Loan Finance loan account and who has not held an Education Loan Finance loan account within the past 24 months. Additional terms and conditions apply.