Dear Dr. Don,
I really need advice. Over the years, I have stuck by a floundering family business owned by my parents. It has finally sold and I have been gifted a small amount of money. I am 58 years old, have $11,000 in my IRA, and put part of the gifted money into two $5,000, five-year CDs at 3.25 percent.
I’ve got an appointment with a Wells Fargo financial dude. I’m so afraid of the market; could you please give me some advice to ponder on?
— Becky Bemused
You’ve only shown me $21,000 in assets. You’ve got $10,000 of that locked up in CDs for the next five years. While you can no doubt withdraw those deposits by incurring an early withdrawal penalty, getting investment advice on a $21,000 portfolio isn’t your first priority.
You need more than just investment advice. Ask the “financial dude” if he provides comprehensive financial planning services. If he’s just providing investment advice, tell him you’ll reschedule after you have a better handle on your financial goals.
A comprehensive financial plan can include budgeting, taxes, insurance, retirement, college savings and estate planning. It’s likely you won’t need to touch all these bases, but a comprehensive plan will make sure you don’t miss a topic important to your goals. A holistic approach to financial planning will also consider your life goals.
I’d suggest using a fee-only financial planner. He or she will help you see where you stand, and identify financial (and life) goals and how you can work toward accomplishing them. I recommend you read the Bankrate feature, “Financial Planners: Not just for millionaires anymore.”
The National Association of Personal Financial Advisors is another good resource. Interview a few candidates using the CFP Board of Standards guide, “How to Choose a Planner.” I also recommend reading the CFP Web page, “Financial Advisers Who May Work With You.”
To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.” Read more Dr. Don columns for additional personal finance advice.