Working With A Financial Advisor - Building Your Team

If you have read some of Robert Kiyosaki's books you are aware that one of his strategies to becoming financially independant is to work with a team of experts. Basically what he's saying is to work with such professionals as Financial Advisors, Tax Planners, Accountants, Lawyers, etc. These individuals have extensive knowledge in their own area of expertise and by working with them you can accelerate your own learning and advancement in financial and business matters.

Here in Canada, working with a Financial Advisor is free for the client in most cases since they are paid by the companies whose financial products they sell. A word of caution though, this can lead to a conflict of interest where certain Financial Advisors may try to sell you certain products not because they are better for you but because they earn more commission from those products. This is where you have to do your due diligence by shopping around and asking questions. Also avoid Financial Advisors that work for financial institutions because they are biased towards selling only their company's products. I personally work with an independent Financial Advisor that has access to a wide offering of products and services from multiple financial institutions and insurance companies. This way he has the ability to mix and match products from different companies that better suit my needs.

Some questions to ask Financial Advisors before adding them to your team include:

• What differentiates you from other Financial Advisors / What is your approach to financial advising?
• How long have you been in this business?
• What qualifies you to offer financial advice? (Traning, education, experience, awards)
• Do you offer products from a wide range of financial institutions and companies?
• How do you get paid - from the client directly or do you earn a commision from the companies' whose products and services you sell?
• Can you provide me with a few referrals - clients that use your services?
  

Working with a Financial Advisor can take years off when you plan to retire because they can help you accelerate your savings with different financial tools and strategies that you had no idea existed. For example, I learned the other day that Manulife offers a low interest, open loan for investing in such products as mutual funds in which your monthly payments only involve paying back the interest not the capital. In addition you can deduct the interest payments as an expense on your income taxes so you'll pay less in taxes while your money grows faster. Once you make profit on the investments you can repay the loan and keep the profit you made. This is one trick the rich use to make money faster - they use debt as a lever to make more money. In contrast most of us use debt to buy consumer goods and material items that do not bring in more money for us, just more debt at high interest rates - think of your credit cards!

Another strategy that I learned from my Financial Advisor is that you can take out a line of credit against your house and pay off your mortgage with it. Why would you do this? Let's say you have mortgage payments of $2000 per month. By paying off the mortgage with a line of credit you will significantly reduce your monthly payments because with most lines of credit you only have to pay back either the interest or a small percentage of the amount borrowed. So what this means is that you can cut your monthly payments on your house (sometimes by more than half) and therefore increase your cashflow to do other things with the difference you no longer have to pay. Here's where you can maximize your savings for retirement or use the money to start your own business. The possibilities are endless.

So now that I've given you a taste of what working with an ethical and professional Financial Advisor can do for you, go out there and add one to your team of advisors, you won't regret it! (Just remember to do your due diligence first by shopping around and asking questions)