How To Find The Financial Advisor Inside

David Frost // Better Investing


January 6  

This can truly be the first day of the rest of your financial future. Let’s start by determining which group of people you find yourself in.

Are you the type to hire financial advisors to help determine what to do with your investments, mortgage, retirement accounts, taxes and any other complex or tedious component of your financial world?

…Or are you the DIY (Do it yourselfer) who knows, believes or thinks they can manage their entire financial picture to success and solitude?

Either way is fine, with caveats.  The goal right now is to help answer those questions and outline simple steps to get you pointed in the right direction.

First order of business is to recognize – Nobody knows you better than you!

Get your house in order

Outlining a plan to determine where you are now, where you need to be to reach your goals, and of course how in the world are you  going to get there is a crucial step and builds the foundation for everything else we need to discuss.

When assessing any business, especially your own personal business, we have to first take an inventory of what we have.  We need a detailed and consolidated report of our financial lives.  This includes everything from our investments, assets, insurance, liabilities, debts, future obligations, cash, income, retirement accounts and so on.

One of the biggest pitfalls many people fall into is completing the exercise one time, but then fail to update the inventory with each change in their lives, the economy, the markets or all of the above.

Arguably the best place to begin this process is by signing up for a free account at  This site is owned by Intuit, is secure and has more than enough features and capabilities for the everyday family needs.

Another source for financial calculators and inventory worksheets is Schwab Moneywise.  You’ll find the necessary documents to fully begin the process of figuring out your total financial picture.

Don’t leave without GPS

When you’re headed to a destination that’s unfamiliar or foreign to you, with modern technology we simply input the address of where we want to go in to our GPS and let the guide tell us what to do.

Well, our financial future needs to be a little more hands on than that, and maybe should be referred to as our FPS or Financial Positioning System.

Let’s get back to all those advisors some of us have.  While it makes total sense to partner with certain individuals and companies to guide us in the areas we need help like tax preparation for example, you still need to be accountable for the final results – win our lose.

This is why our own education is the most important gift we can give ourselves and loved ones.

Never assume the advisor we are consulting with is:

  1. Asking the right questions
  2. Knows everything we think they know or…
  3. Will provide the absolute best advice for our benefit and not theirs.

Simply put, where you need to be can be a moving target.  You’ll need to make certain decisions that may change throughout your life due to unforeseen circumstances, which is why your FPS (Financial Positioning System) will be a dynamic process for a long time to come.

Starting with the end in mind

First we plug in the final destination.  When do I want to retire?  How much money will I need to live in the way I chose.  This may seem obvious at first, but too many people work their entire lives without ever asking these simple questions until its too late and find themselves falling short of their goals.  Don’t be one of those people.

You can use the calculators we showed before, or find others doing a simple search for financial calculators.  Most of them are similar and will do the job to get you on the right track.  Each of you can identify your annual expenses, your income today and projected income in the future (with the exception of investment income which we’ll get to later).  The calculators will factor in a cost of living adjustment for the future which will provide you with a general idea of how much money you need to produce for your family to live without worry and fear.

Here is an example of a simple calculation that took just a couple of minutes to complete.  This example falls short of our goal, but don’t fret because we have a fix for that.

savings projectionsCalculator provided by dinkytown.

I’m falling short, how do I get there?

This concept is not short on ideas.  There are literally millions of financial advisors who claim to have the magic formula for achieving your financial goals.  Caveat Emptor.  Let’s get back to “nobody knows you better than you.”  Don’t make the mistake of turning over the keys to your money, future and happiness while assuming everything is going as planned.  You’re in the drivers seat and you need to have your hands on the wheel at all time.  Control your own destiny.

Reduce Expense

An obvious conclusion for anyone falling short of financial goals, United States of America notwithstanding.

We all can cut some things out of our monthly budget if we chose to make some tough decisions, or just simply abide by a budget rather than the traditional impulse spending.

There are many ways to address this issue and we’ll reserve some of these for a future post, but for now you can go here and here for ideas on how to get started.

Increase Income

This may not be immediately possible for many people when considering the traditional forms of income.  However if you learn the value of how to leverage your own money into non traditional sources of income, you can expect to reduce the time it takes to achieve your goals.

An example for illustration purposes would be to allocate some capital or savings to rental income if you have the expertise.  Private lending is another area to explore.  If you haven’t heard of micro funding or crown funding, then it pays to take a look at some of the more successful companies in this space.

Two that come to mind are Prosper and Lending Club.  Go learn more about them, it’s very interesting.  These sites are normally thought of as a place to get a loan, but where is the money coming from?  You and me.

Right now, you can invest money and receive an 8 or 9% return, or higher.  You invest along side other bright people who are making small investments into a large pool of borrowers which is a great way to minimize your risk and receive regular interest payments back into your account.  How much are you earning today on your investments?

Other areas to increase income would be up to your individual situation, but putting some thought to it and thinking differently is a good start.  We will certainly put forth ideas throughout time to help our readers and followers identify other areas to consider.

Explode Investment Returns

Now here’s an area that hits the “not so funny bone.”  Most of us have experienced major frustrations over time with the stock market’s manic behavior.

Where do you get sound market advice that produces solid returns without the emotion, the risk, the uncertainty and disappointment?

We’ve all made investments that we thought or were told would produce the type of returns that would “grow our nest-egg” in a way that allows us to retire worry free, but only to show a loss soon after with an emotional decision to follow.  For the majority of us, this seems to happen all too often.

We all need the discipline and confidence to make an investment or a trade based on a sound method of evaluation that works, is repeatable and takes the emotion out of your decision making process – which is our biggest enemy and wall between success and failure.

There are three primary areas we focus on to determine a possible investment or trade setup.

First we identify chart patterns that have historically shown a high degree of probability of completing in a certain manner.

An example would be the bull flag pattern.  These are found after a stock has made a decent size up move, and then begins to consolidate or retrace part of that move for a specific period of time.  Here is a visual of two classic bull flag patterns:

Bull Flag

As you can see, the up move in the stock was followed by several days of “consolidation sideways in a slightly downward movement.  This is one of those high probability trade set ups, but we wouldn’t be ready to pull the trigger just yet.

The second thing we have to do is determine the price levels of the chart we’re looking at to see if another high probability signal is present.  Next, we begin to calculate past price moves.  Is the stock at highs or lows?  Where are we relative to the major moving averages?  Do the longer and shorter term prices match up?  What is the current state of the market?  These and several more factors will help determine if we can use price as one of the catalysts in our decision.

The third most important factor we consider is timing.  Sometimes the market is kind of like making a cake, you have to give it enough time to bake before it’s ready to dig in.  Our disciplined approach makes us wait the necessary time frame to allow the probabilities to increase in our favor that the move will happen as we anticipate.  Sometimes the more time a stock consolidates, the larger the projected move will be.  We issue alerts only on the highest probability trade set ups which puts the odds in your favor.

This is only a simple example if one chart pattern we look for on a daily basis.  There are many more we will be covering in future articles.

What to do now?

Stop and reflect on your current financial situation.  Do you need to make some changes?  Are you achieving your goals?  Do you know what your goals are?  Can you grow your investment and retirement accounts enough to get you on the right path toward financial independence?  Yes you can.

My goal is to provide the tools necessary to achieve success in the markets by providing the results of our research in the form of trade alerts that tell our subscribers what investment looks ready for a move that will provide us a good short term profit.  This process repeats on a regular basis and we invite you sign up for a free trial where we’ll show you exactly how we do it.


About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost