057: Financial Planners, Insurance, and REALTORS with Rich Arzaga
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In the real estate industry, we always need to be aware of leveling up our financial situation. In this episode, Rich Arzaga joins Monica to talk about all things financial wellness. Rich shares information about licensing, credentials, and how financial planners get paid, as well as some things to look out for when choosing a financial planner. They also discuss different investment platforms and insurance options. This episode is packed full of great information for any REALTOR\\xae, whether you already have a financial plan or are just getting started.
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The title \\u201cfinancial advisor\\u201d is a broad term \\u2014 not everyone you hear about being a financial advisor has the same license or credentials. If you are seeking out a financial planner for your financial situation, make sure you look for someone who is licensed and credentialed. These people are licensed in giving advice or offering different investment options. Rich shares some of the different license numbers, and what goes into being able to earn each license. To find the right financial planner for you, ask the questions about what licenses they have and what that means, as well as what credentials they hold. The CFP\\xae (CERTIFIED FINANCIAL PLANNERTM Practitioner) designation is going to easily set financial planners apart from one another.
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Financial planners get paid in a few different ways. When you pay a fee for service, the financial planner is creating a plan for you, but not managing the money or offering insurance products. As you get to a higher level of need, many advisors fall off and you may need to find a different advisor who is certified to handle more advanced planning like taxes, stocks, investment real estate, etc. A more advanced advisor can help to mediate conversations between other professionals that handle specific aspects of financial planning. Beyond financial planning, there is asset management. These advisors get paid either on commission or a fee.
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In addition to license and area of expertise, some other things Rich recommends when trying to find the right financial advisor is chemistry \\u2014 you want to be able to build trust and make a connection with them. If you\\u2019re paying someone, you want to trust that you can follow the advice they give you, much like a trusted REALTOR\\xae! Another thing to consider is the company; some companies are very formulaic. Because everyone\\u2019s situation is different, it\\u2019s hard to put people in a formula that is true to their intentions. If you\\u2019re able to work with an independent advisor, that will give you a better shot at more individualized planning.
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A frustration for REALTORS\\xae can be that some financial planners don\\u2019t specialize in investment real estate, and aren\\u2019t sure how to treat directly-held real estate. Rich became a financial advisor because he was passionate about real estate and now teaches financial planners how to help clients with their real estate questions. If you\\u2019re looking for someone who can help with real estate, look for an advisor who specializes in cash-flow-based planning. Cash-flow-based planners can integrate directly-held real estate to be part of your financial plan.
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There are several independent investment opportunities as well. About 17% of the population are self-investors. Rich talks about some of the different platforms available for anyone who wants to dip their toe in the water of investment. Platforms like Robinhood, Schwab, TDAmeritrade, and Fidelity all offer something a little different for whatever level of investment you are at. It\\u2019s never too early or too late to start investing, and we are fortunate to have many options!
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Rich shares some new information around health care that has come about from the American Rescue Act. Regarding life insurance, don\\u2019t be afraid to explore this, especially if you have people depending on you. Term life insurance will do for most and there is more flexibility in companies, but if you are going to do cash value, do your research to make sure the company is strong.
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Some other insurance options are long-term care and disability insurance. As people get older, one of the biggest risks they face in the balance of their financial life is the need for long-term care and the expense that comes with that. Rich shares some calculations based on the trends for long-term care, the overview of the risk for the family. Disability insurance is quite pricey, but the question for every REALTOR\\xae to ask themselves is if you became disabled today, would you be short in your financial plan or would you be okay? As you are shopping for disability insurance, get as long as your plan requires, or you need; if you can\\u2019t afford that due to cost, give yourself at least two years to be able to get your situation under control.
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The NAR\\u2019s Center for Financial Wellness is a great program and resource for financial literacy for REALTORS\\xae. The nice thing about this resource is that it is industry-specific, not just general financial planning. It\\u2019s also free!
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Tweetables:
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\\u201cYou may grow out of your partner that you\\u2019re with if you\\u2019re growing your net worth and your situation is more complex. You\\u2019re going to need someone with a little more depth.\\u201d \\u2014 Rich
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\\u201cFinding somebody that you can trust is really very important, otherwise people who don\\u2019t have that chemistry maybe don\\u2019t take that advice.\\u201d \\u2014 Rich
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\\u201cThat\\u2019s how you get the help. Find somebody that\\u2019s a CFP\\xae, who does financial planning, that uses cash-flow-based technology.\\u201d \\u2014 Rich
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Guest Links:
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Additional Links:
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Onlinelearning.realtor for NAR Online Education
Training4RE.com \\u2014 List of Classroom Courses from NAR and its affiliates
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crd@nar.realtor
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Host Information:
Monica Neubauer
Speaker/Podcaster/REALTOR\\xae
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Monica\\u2019s Facebook Page
Instagram.com/MonicaNeubauerSpeaks
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Additional Bio:
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Rich Arzaga is a CERTIFIED FINANCIAL PLANNERTM, a CCIM, an Accredited Investment Fiduciary\\xae, an inactive REALTOR\\xae, and the Founder and CEO of Cornerstone Wealth Management. He is also a long-time Adjunct Professor in the UC Berkeley Personal Financial Planning program.
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Cornerstone Wealth Management, Inc.
\\u201cHow Real Estate Financial Planning Became Our Niche\\u201d
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Inspired to be Our Clients\' Most Valued Asset\\xae
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Rich Arzaga, CFP\\xae, AIF\\xae
CERTIFIED FINANCIAL PLANNER\\u2122 PRACTITIONER
Accredited Investment Fiduciary\\xae
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