Rule number two…be aware of the interest rate.

The interest rate can be used to determine entry point and exit point of an investment vehicle dependent upon ones strategy and any applicable derivatives used for hedging purposes.


As interest rates increase so does the rate of return on risk free treasury notes. If the government one day is willing to go from a 2% yield to a 4% yield for a 10yr treasury note it will cause stocks prices to fall until the return on stocks rise well above treasury notes while bond prices fall (limits spending). And the math is fairly simple in the short term as it is: current stock price/rate of return wanted ( a reasonable number above bonds) = new share price. But it is not a sure science as it depends on the level of debt financing entities have incurred as they will lose more money with higher rates on loans. Low debt financing entities can benefit price wise and even dividend paying companies can see benefits when rates rise... as rising rates signifies economic growth for companies not trapped in debt.



Commodities prices have historical changed indirectly proportional to the interest rate while Forex prices change directly proportional to the interest rate. And since historical inflation in the US is about 3.5% when interest rates rise bank products such as CD's become more attractive as they can see rates higher than the average rate of inflation.

R.I.P Financial Planners #NewRules

       

2014 marks the death of the traditional financial planner...




Software developers with the CFP certification, software developers with the backing of a CFP, and software developers in general have created phone applications that manage money in real-time along with analytics. One can link bills, link credit cards, link investments, link retirement funds, links college funds, link banks accounts, etc. to mobile applications in order to monitor a budget and in order to monitor spending habits in real time.





Traditionally, financial planners have not monitored the daily spending activity of clients, but rather suggested strategies to free up cash in areas of clients lives and recommended investment products. Financial Planners work with other professionals such as brokers and insurance agents in order to execute a client’s financial plan. A Financial Planner is simply a middle-man that provides financial ideas in an archaic fashion as the internet allows one to shops investment products without a planner’s bias towards a product they sell, or a planner’s bias toward a product that a friend of theirs sells.




Common sense of spending less than your income and possibly selling assets when above means is the universal truth of financial planning. Self-discipline to not count on future increases of income and self-discipline in spending are the rules to avoid being in the red. One only needs an attorney to assist with things such as estate planning, will in testament, and transfer of assets in a divorce… a tax professional that is aware of the ever-changing laws in order to give you scenarios of tax implications as changes to financial status occur…. and a broker to facilitate the transactions of securities and insurances. The financial Planner is a waste of money.







And in case you think I am making this up as I go along…here are excerpts and links from reputable companies on the duties of a financial planner:


“True financial planners are held to a fiduciary standard, and generally hold the CFP® credential. Often, insurance advisors or wealth managers will position themselves as a financial planner to stir up business they will eventually lead to commissions or assets under management. A financial planner usually describes an advisor who, for an hourly or project based fee, helps their clients develop a written financial plan that they will execute elsewhere. Generally financial planners are not investment experts, and may not give the most comprehensive or competent insight on how to invest. Also, they tend to have limited resources to help you execute a plan.”
Read more: http://www.businessinsider.com/financial-planner-broker-or-wealth-manager-2012-11#ixzz325alNArM


“Basically, financial planners will gather your personal and financial information and use it to make recommendations for your situation. In most cases, you won’t need a financial planner for managing your day-to-day finances.”


Read more: http://www.quickenloans.com/blog/financial-planner#ixzz327I9kXmj








And with that said…..the only types of financial planners that are relevant today and will be relevant in the future are the types with tips to lower cost in various aspects of your life. The new age financial planner can tell you where to find the best grocery store coupons, provide simple DIY household fixes, or teach you how to make homemade soap (no, I did not mean soup...why not soap, lol)….Sound a lot like Grandma, huh?



Bankrupt?….Hustler harder or find a lawyer to help you file the bankruptcy paper work. You probably cannot afford a planner that will charge for advice and the planner will ultimately recommend you to an attorney to complete the legal aspects, which will incur additional fees for you. The financial planner as we known has been eliminated and serves no purpose in our society moving forward. Financial Planners are simply hustlers of people that do not use the internet or hustlers of people that are in panic mode. Sorry…. #NewRules

Yes, I did in fact eliminate financial planners in one blog post….and with that savings of money click on the shop link ( http://www.iceberggem.com/shop.html ) so you can eliminate the Wealth Managers/Financial advisor from digging through your pockets while maintaining returns or possibly improving your returns. You are eliminating a reoccurring fee/commission...and you can also monitor your finances with more care than an advisor that serves lots of clients or an advisor that only gives special attention to those with larger accounts. Oh, and fun fact… even those with the illustrious CFA title that manage your mutual funds cannot consistently beat the market especially once you factor in fees. Some CFAs make tweaks to stock indexes and still charge you significant fees….hahaha, but that’s another story.