Previously, we were discussing about is insurances an asset or liability and that leads us to today's topic of "Is your financial advisor an asset or liability?"
Warrent Buffet has this to say about financial advice from Wall Street.
"Wall street is the only place that people ride in a Rolls-Royce to get advice from those that take the subway"
Don't get me wrong, there are many dedicated agents out there who is sincere in making your financial future secure and i believe i'm part of it.
But in these past years, financial planning industry have been a growing trend in our country, maybe due to the fact that the aging populations group wanting to do something about their retirements.
To be qualified to advise on other people financial futures, all you need is 3 papers within a month, and i cleared them on my first attempts and thus that shows that i'm passionate about financial planning industry.
ok, cut the long story short, it takes you a longer time to become a qualified roti prata man making good tasting prata than it is to become a financial advisor and start giving advise on people's financial futures.
An advisor who is able to help you makes the right financial decision in life is an asset.
An advisor who is able to help you makes money is an asset.
An advisor who is working towards helping you and making sure you have enough for retirement is an asset.
Pay your advisors well, and they will give you good advice.
Try to be cheap with them and you get the worst advice, and you deserve it.
The worst financial advice are FREE advice.
Just like no good things in life come to you for free.
A few questions to note that if your financial advisor is doing a good job for you is,
given the same set of circumstances, will your advisors do the same thing which he/she adviced you to do?
When asking you to invest into their funds, will he or she buys the same funds at the same time as you do?
And for your investment banker, how much of his/her income comes from investment portfolio?
or does his/her income comes mainly from selling financial products(vehicles) to you?
"earned income"
Our financial institute recognized producers.
Once every year, if you read your papers, they will have pictures of their top advisors on the front page according to their contributions to the company.
What is the paper saying?
BEST SALES PERSON.
keyword here is SALES.
The title didn't says like "Most dedicated agent" or "Most Caring agent"
or "Best advising agent".
There is a co-relation between Sales and being dedicated and caring and giving good advise.
But that does not means that all the top agents are dedicated or caring and is giving good advise.
In the world of sales and financial planning, you might be amazed at what some people are doing to be at the top. It's just like beautiful football does not always win the competitions, but i'm glad spain won.
I'll paused for you to digest.
Be back soon.
Monday, July 26, 2010
Monday, July 12, 2010
Is Insurance an asset or liability?
Before I was in this line, I've listened to different financial advisors with regards to insurance.
First time round, I was forced to listened to this "ex-major" who came to BMTC to tell us about how dangerous army was and is.
He was like saying something along this line, "You guys are combat soldiers, you guys need to do SOC (standard obstacles course), what if you break your arms during that training! who is going to take care of your mother! Don't just think about yourself, think of your parents who brought you up! This plan will compensate you blah blah blah amount if you break your arms during SOC!"
Of course, I didn't sign up! AND I AM still in 1 complete piece.
(When you are in camp for the 1st time and for the 1st week, really! that's the last thing you want to hear!)
Day 2
There are these few pretty ladies(well perphaps when you're in camp for 2 weeks, any lady seems pretty) from another local insurance company coming in to talk about saving plans, you young and handsome boys, if only you save this month of money every month, by the end of XXX amount of years, you can receive xxx amount of money.
The talk this time round seems better and more positive instead of death, breaking your arms and legs!
Still, I didn't sign up!
As much as i know even before i'm in this industry that insurance is a necessity instead of a luxury, I hesitate to sign up.
So for all my friends out there who refused to do anything with me, i totally felt what you're going through.
That brings us to our main point today,
Is Insurance an asset or liability?
I think we all should know 1 thing about insurance.
You cannot buy it when you need it.
So when should we buy ?
Before we need.
So you might or might not need them throughout your entire life.
So paying money for something that you might never get to use, doesn't that make it a liability?
Then when you need it, doesn't it immediately make it into an asset?
So to answer that question, Is it an asset or liability.
You have the answer.
If today, your concern is you need the money for your dependents until they can become independent, it's an asset.
If you need this amount of money for your retirement and a policy can do just that, it's an asset.
If your concerned is providing for your family when you're not around and an agent come around selling you an investment plan, that investment plan is a liability to you.
Yet the very same investment plan is an asset to somebody who is planning for retirement or for child's education.
An insurance plan is just an insurance plan.
But an agent who comes along who is able to identify what you need and sell you a correct plan to fit your needs, that agent is an asset to you.
Insurance is a very important piece of investment which you want to have in your portfolio, however, it's not the ONLY piece of investment.
Instead of trying to find the perfect piece of insurance to fit your life, instead try find the perfect agent who is able to help you to identify your needs.
As much as there are agents who can be asset to you in your life, there are agents who will be a liability to you.
Selling based on commission and returns instead of selling according to your needs.
Or just to give you an example to bring across the point,
Client is in his 40s and is in good health, doesn't have any medical plan.
Yet the agent sell a $5000/yr premiums investment plan and walk away.
3 months later,
Client is hospitalized and the bills came up to be $100,000.
By selling a hospital plan of let's say, $400/year, he could have save that $100,000.
So a better question to "Is insurance an asset or liability" will be " Is your insurance agent an asset or liability?"
In our next session, I will discuss on my personal opinion about questions to ask your insurance agent to identify whether he/she is suitable for you.
First time round, I was forced to listened to this "ex-major" who came to BMTC to tell us about how dangerous army was and is.
He was like saying something along this line, "You guys are combat soldiers, you guys need to do SOC (standard obstacles course), what if you break your arms during that training! who is going to take care of your mother! Don't just think about yourself, think of your parents who brought you up! This plan will compensate you blah blah blah amount if you break your arms during SOC!"
Of course, I didn't sign up! AND I AM still in 1 complete piece.
(When you are in camp for the 1st time and for the 1st week, really! that's the last thing you want to hear!)
Day 2
There are these few pretty ladies(well perphaps when you're in camp for 2 weeks, any lady seems pretty) from another local insurance company coming in to talk about saving plans, you young and handsome boys, if only you save this month of money every month, by the end of XXX amount of years, you can receive xxx amount of money.
The talk this time round seems better and more positive instead of death, breaking your arms and legs!
Still, I didn't sign up!
As much as i know even before i'm in this industry that insurance is a necessity instead of a luxury, I hesitate to sign up.
So for all my friends out there who refused to do anything with me, i totally felt what you're going through.
That brings us to our main point today,
Is Insurance an asset or liability?
I think we all should know 1 thing about insurance.
You cannot buy it when you need it.
So when should we buy ?
Before we need.
So you might or might not need them throughout your entire life.
So paying money for something that you might never get to use, doesn't that make it a liability?
Then when you need it, doesn't it immediately make it into an asset?
So to answer that question, Is it an asset or liability.
You have the answer.
If today, your concern is you need the money for your dependents until they can become independent, it's an asset.
If you need this amount of money for your retirement and a policy can do just that, it's an asset.
If your concerned is providing for your family when you're not around and an agent come around selling you an investment plan, that investment plan is a liability to you.
Yet the very same investment plan is an asset to somebody who is planning for retirement or for child's education.
An insurance plan is just an insurance plan.
But an agent who comes along who is able to identify what you need and sell you a correct plan to fit your needs, that agent is an asset to you.
Insurance is a very important piece of investment which you want to have in your portfolio, however, it's not the ONLY piece of investment.
Instead of trying to find the perfect piece of insurance to fit your life, instead try find the perfect agent who is able to help you to identify your needs.
As much as there are agents who can be asset to you in your life, there are agents who will be a liability to you.
Selling based on commission and returns instead of selling according to your needs.
Or just to give you an example to bring across the point,
Client is in his 40s and is in good health, doesn't have any medical plan.
Yet the agent sell a $5000/yr premiums investment plan and walk away.
3 months later,
Client is hospitalized and the bills came up to be $100,000.
By selling a hospital plan of let's say, $400/year, he could have save that $100,000.
So a better question to "Is insurance an asset or liability" will be " Is your insurance agent an asset or liability?"
In our next session, I will discuss on my personal opinion about questions to ask your insurance agent to identify whether he/she is suitable for you.
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