The BA Q&A: Do I Need a Financial Planner?

meant to be fun informational. Don't forget that you can remain anonymous, so give us you know, you can tell us your business, but we won't actually put your name out there. So just let us know if you want to remain anonymous. Submit your question to us at Brownambition podcast dot com or hit us up through IG. We are at Brand Ambission Podcast on the Gram. All right, let's dive into these questions. First question from IG. We'll call this listener Sam. Sam says. Sam says, what is

better renting or buying a house? Oh? Sam, I feel like this is the perennial question on everyone's mind all of the time, and it kind of depends on a couple of different things. One, it depends on the and I will say the economy, but also the economy in your area, the local housing economy, and financially, the second huge contributing factor to whether it makes sense to rent or buy our house is what do you want to

do and what makes sense for your financial picture. I think what I love about a lot of the advice and conversations around home ownership these days is there's a lot more appetite to not force people into prescribing to this vision of oh, I need to get a house. I have to be a homeowner in order to build wealth or to be a proper adult. Right, that's just bs and we all know it when it comes to deciding whether to buy or rent. And by the way, this was me four or five years ago when we

bought this house. I was exactly where you are, and I was like, what is the right decision? This is very stressful. We ultimately decided to stop renting and buy a house. And I'll kind of talk you through my train of thought there at the time, in our local economy, there were some houses that we could get at an affordable price that fit the bill for what we wanted out of our lifestyle. We wanted to be close to the city. So I live outside of New York. Now.

We wanted to be close enough to the city to commute to work, which is like, Lol, no one does that anymore. That's not true. A lot of people do.

But yes, we were concerned about being close enough to the city so where commute wouldn't be hell, finding a home that we could put our own stamp on with doing our own you know, remodels, renovations, things like that, because of course, we were always watching HGTV, which is what you do when you're thinking about buying a house and then you think you're a property brother and you can just you know, renovate it on your own. But I digress. So we wanted we wanted to find a place.

It had to be the right fit for us location wise, so close to the city, not too far. We also wanted something within our price points, so we got really clear on how much we were willing to pay. I kind of went off of what what mortgage payment can I afford? Okay, and we decided like something near or a little bit over our rent would be doable, and that was comfortable for us to be able to pay with one income. Just in I always like to be prepared and kind of think, well, what if one of

us loses our job. At the time, we were both working full time for businesses, so it was possible, right, And my husband works for the government, so really I tried to base it off of his salary because you know,

government jobs so stable, blah blah blah all that. But anyway, I've tried to come up with a monthly budget and then kind of work my way back my way into how much house we could afford from there, and ooh, when I tell you you think you can afford something, and then you forget about property taxes, right, so, oh man,

the property taxes here are wild. So I would definitely also factor in like what's your total household expense for the month, so how much mortgage could you afford, and then kind of try to get a sense of what property tax like in your area too, to give you a real realistic picture of what your housing costs could be.

And then from there, once we knew kind of how much house we could afford and what kind of house we wanted and where we wanted it at, then it was just about really wheedling, whittling down the list of options and filtering it down. And the good thing about being so cheap and an extremely expensive market like New York is that our options were very few. Right, So once we found a house that fit our budget and the other sort of metrics, then we stopped renting and

we bought the house. Okay, that is what I can say. It made financial sense for us, It made sense for what we needed. It was a house that fit our needs, and those are the reasons that we got it. And for no other reasons. Could we control the economy. No. That's why I think it really is important to only

buy what you can afford. And it's true since the housing crisis of the early two thousands, banks and lenders have gotten a lot better because they've been for to buy legislation and by the Consumer Financial Protection Bureau, But they have been forced to get a lot better themselves that only letting people borrow what they can afford to repay. So it's a lot harder to get too much house,

more house that you can afford these days. That being said, like you can still do like even though your lender says your approved for X amount of money, it doesn't mean you have to buy a house for that much money. Okay, it's okay to get it's okay to get the smaller house for a little bit less and give yourself that wiggle room. And for us especially, I didn't know four or five years ago that I'd be launching my own business,

but as sure as hell, was relieved to know. And that's part of the reason why I was able to step out of my own you know, when I did, is because our housing expenses were not such a massive part of our household budget that I felt chained or kind of locked down to having this particular job at

that particular salary. We gave ourselves that flexibility, and I'm so grateful that we did, because you may have have the job that pays you know, X amount of money now, but what if in five ten years from now, you're not happy anymore, or you want to take a pay cut to do something else, or you want to launch your own business or whatever. You want to buy a camper van like everyone's doing and go, you know, around the country living out of a camper van and not

my style, but you know, to each his own. You have that flexibility if you create a budget that gives you some room, okay, some room to wiggle around. What else can I say about renting or buy us that's it. Rent if you want to rent and buy. When you want to buy, pay attention to what's happening in your local economy, pay attention to you know. And if you're in a place right now since the pandemic where how's

how's price? Home prices have just been insane and nothing seems affordable and you can't find a house that ticks all your boxes, then just wait, wait, or potentially pursue home ownership in another area. But I definitely wouldn't want anyone to buy a house before they're ready, or a

house that doesn't make sense for their financial goals. You're the one who wants to live in the house at the end of the day, and you're the name who's your name's gonna be on the mortgage payment each month, So that decision has to come from you and no one else. All right, Sam, thank you so much for your question. Let me get to question number two. Oh the boys are out today. This question comes from listeners

Brian the boy the men's are here all right? So Brian says, let's say someone's credit is under six hundred, would there be any benefits to them being added as an authorized user on another's credit card account whose credit score is over seven hundred? Would there be any negative credit effects in doing so to the person whose credit score is over seven hundred? Okay, So we've got two

hypothetical people here. Someone's got poor credit, their credit is under six hundred, and then they're wanting to become an authorized user or on someone's account who's got great credit seven hundred and above. And so the question is like, basically, what are the benefits of that? And then is there any risk to the person with good credit to have someone piggyback on them who has crappy credit? Okay, fun question.

So let's talk about being an authorized user. So there's a couple of ways to share credit responsibility and credit card usage with another person, authorized user or joint account holder. The main difference between those two is that when you're an authorized user, you're able to use the card, but you don't actually have ultimate responsibility for the payments. A joint account holder is when two people have joint responsibility for the payments. So if one person stops making payments

the other one they're going to come for you. Okay. So authorized user. The benefit of that is it's less risk for the person with poor credit to piggyback onto someone with good credit. Less risk meaning they don't actually they're not on the hook for those payments. And if the person who actually is the primary account holder has issues making payments, it's not they're not going to come

after the authorized user. And the benefit of being an authorized user, which is this person's getting at, is it can actually help you improve your credit score, so long as the main account holder is making their payments on time. So this is the tricky thing here. You're really trusting that you're piggybacking, and you're like attaching yourself to someone

who's going to be responsibly using their credit card. If they start to not responsibly use their credit card, that could have a negative impact of course on them they themselves, but also on you as an authorized user, because those that credit card behavior could be reported on your credit history as well. These are this kind of reporting will change by credit issuers. So before you become an authorized user, I would actually call up the credit card company and

ask them how do you guys treat authorized users? Do you report positive And of course they're going to report positive behavior to credit bureaus, But what about the negative behavior because that can actually change by issuers, So definitely call them up and get the details on that. Now, would there be any negative effects or risk to the person with higher credit to have someone piggyback on their

account who has poor credit. Well, as an authorized user, you are giving that person the ability to use your credit card, So yeah, there's a huge risk there. They have to be able to use it responsibly. And ultimately, if they screw things up and they charge a bunch of crap to the credit card and they can't afford to pay you for their part of the bill, then

you're on the hook for that. So what I tend to see is people you know in relationships or like a parent child relationship, where it authorized credit card user makes more sense. I mean, you think you can hopefully you can trust your kid, but yeah, there's a risk there, and I would say if you have an authorized user on your account, you got to watch them like a hawk baby. Okay, it's really it's your credit on the

line at the end of the day. So it's helpful for the person who needs you to improve their credit, and I think it's a great you know a tool and a strategy for that, but there's got to be mutual respect and trust. And I think the person whose names on that bill at the end of the month, do not take your eye off of that credit card bill and make sure that you nip any shenanigans in the bud right away, because you're the one holding the

bag at the end of the day. Okay, all right, let me take a quick breaky break, and I'll be right back with more BAQ and a All right, the A fan, It's Mandy. I am back with our third and final question for the BAQA. This week, we have got a question from Brittany. Brittany says, Hey, I'm new to the podcast, but I've definitely been binging. I paid off my student loans in twenty nineteen, saved up and bought my first home, and now I'm thinking about my

overall financial health and trying to build wealth. On a recent episode, you mentioned you have a financial advisor. Could you talk about where we should get one, how much I should spend on them, and how often I should meet them. I tried one and it really didn't work. Then I found another one that has a flat feet of twelve hundred and fifty dollars, which for someone who's

trying to build wealth feels counterintuitive. I would love some advice, Okay, Brittany, I get this question a lot, and you know what, Do I have a financial planner? Yes? But do I think that everyone needs one? No? Even I don't need one sometimes. I mean, I'm sure my financial advisor and planner would tell me like, yeah, you need one, but

I don't really think that everyone needs them. I think what was helpful for me, and the reason I got one about when did I meet Helen like five years ago, is because my husband and I were thinking about getting engaged. We knew we were going towards marriage and wanting to combine our you know, financial pictures together, and we were kind of like not speaking the same language about our finances.

I mean, ten eleven years into our relationship now, I just know that we're two fundamentally different people, and we decided to make life really difficult for ourselves choosing someone so different to us. But what really helped me was having financial planner to kind of be that mediator between the two of us and to help kind of like make things less. I don't know, it just made our

conversations easier to have. We would schedule a time with Helen, we would have a question, you know about saving for the wedding or I know, we talked to Helen when we were thinking about buying our first home and it

just kind of made it. We had like a referee in the mix, and it helped my husband feel more heard, because when you're married to Mandy Money, or you're dating Mandy Money, it can feel a little bit like I take a lot of like air out of the room because I live and breathe and eat and sleep this stuff, which made it more challenging for him to feel like, you know, his ideas mattered and things like that, which

I understand looking back now. So that is why we brought in a financial planner for a lot of people. You know, let's talk about what's the point of a financial planner and what can they actually do. So most financial planners can be really helpful in kind of assessing where you're at with your net worth, so how much assets versus liabilities do you have, and then helping you sort of strategize how to increase your net worth. So

how can we get our debt paid down? You know what can we do to be saving more and increase our cash flow so that we have more money to save and invest, make some suggestions on you know, how much to contribute to different accounts, and if you need someone to kind of help you, just get the nice foundation for financial success set up. That's where a financial

planner can be helpful. Another thing, and this is where I kind of suspect this flat fee of twelve hundred and fifty dollars is coming in, is financial planners can give you like a full plan which kind of gives you, like your goal for how much you want to have saved and invested for retirement and things like that. And that's more like here's a you know, you're going to download a lot of information from you and then they'll

like give you this plan. I've had one of those plans done not by Helen, but by a previous financial planner. I actually got it through I was a personal finance journalist and I was using a service called learn Invest,

which is now not even around anymore. But they had a financial planner and I just decided to use them kind of for research to see what it was like, and I got one of those big financial plans and when I tell you, I haven't looked at that thing, I don't even know since one Also I was making, you know, I don't know forty five thousand dollars at the time, and it just a lot of that plan didn't necessarily it didn't stay like accurate for long. My

career was just progressing. I was making these big leaps in my pay, and that plan made sense for a single twenty four year old, you know, making forty five to fifty K a year, but it definitely didn't make sense for me a few years down the line. So I would just make sure you really understand what it is that you're getting with an investment like that. The financial planner that I have, we base, we just pay

for the sessions. When I decide I need a session, I'll book one and then we pay, and it probably amounts to a couple of times a year. And how do you decide how much you should meet with them. That's really up to you, and it's really up to what kinds of goals you have and how much support you need in achieving those goals. And I think that's maybe not the best. That's the answer that you know people would like because they just want me to tell them what to do, right, But I can't do that.

It really depends on you and your personality. For myself, I work better if I have sort of like a big call and then I can like execute, you know, do X, y Z, and then I'll get it done and then you know, see you in six months or whatever. So that works for me. If you're someone who's got more of a complex financial picture, maybe you have children, you have a mixed family, You've got some big goals,

you know coming up, big career changes coming up. You may want to have a chat with a financial planner, you know, once a quarter or once every other month, or maybe even once a month. It all depends ultimately, like how much you're willing to mean it will cost money, right, this is someone's time. But I think what you should get as an upfront expectation of what is an hour? What is a one hour call with you? Look like, what is the goal for that call? What am I

going to get out of that call? And because there's so many more independent financial advisors now financial planners, they have their own way of doing things, so unfortunately it's not as easy to compare kind of apples to apples. When I was searching for a financial planner, I remember we interviewed probably three different planners until we found the one that we felt was the best fit for us.

And it wasn't really a like a strategy there. It was just kind of who did we think fit, Like who do we both like because this is two of us deciding, and who could we afford and all of that. So all that is to say, it's what you're doing right now now is the work that it takes to find the right financial planner for yourself. It is to work with different people and see how it goes, talk

to different people until you find the right fit. And I know Tiffany has also in the past talked about her own journey to find the right financial planner, and she interviewed several people. So it's not easy work. And it's not as easy as going on like a ZocDoc and getting the best reviewed gynecologist. There's just maybe this is a business idea, but yeah, there's no easy way to gauge as the success of financial planners or like who's best for you kind of have to do a

lot of the like work yourself. You can definitely ask for referrals from friends and family and people who you know who have had a good experience with their planner. What else can I say about that? Oh? Right, where did I find Helen? So? I found Helen through x Y Planning, which is the x Y Planning network, and at the time, they were really focusing on gen X gen Y, which I think they still do. They have a lot of fee only planners there, and fee only

planners will charge you a fee for their services. So, like I said, when I have a call with Helen, I pretty much know what it's going to cost me and all of that, so everything is pretty transparent. And also, if you want investment advice, like if you want someone to tell you where to put things and give you a plan for that, that's an additional level of service which some financial planners can help you with if they're a registered investment advisor. So ask those questions too, and

also ask what the fees are for those services. So I know when I go to Helen and I'm like, Okay, give us advice on how to diversify our investments. You know we've been doing these an autopilot for a while. What's your advice? I know that's going to cost me more to get that kind of advice from her, So I just kind of ask what's that going to cost me? And move from there. Okay, I hope that's helpful. Brittany. Thank you so much for listening, and you're a new listener,

so welcome to the show. Thank you so much for supporting us. And that wraps up this week's be a Q and a thank y'all so much. Hit us up at Brandimission Podcast at gmail dot com. If you have any questions, you can also go to our website, brandimission podcast dot com submit a question there, or go to ig We are at brandambission podcast on the Gram.