A Financial Advisors Most Frequently Asked Questions
Financial Advisor’s Most Frequently Asked Questions
In this episode, I address my most frequently asked financial questions. Join me to find the answers to questions that keep you up at night!
What should I do with my cash? This is by-far my most asked question and changes depending on the market conditions.
Finding a good CPA
Health Insurance - are there cheaper options out there?
Buying a car and getting the best rate on your loan - listen in to hear how to get a low rate AND cut your time at the dealer.
Should you loan or invest with a friend or family member?
If you enjoyed today's episode, share it with your circle, and don’t forget to leave a review!
Links mentioned in this episode:
Time Stamps
00:53 Maximizing Your Savings: High Yield Accounts Explained
03:37 Finding a Good CPA: Navigating Tax Preparation
07:35 Health Insurance Hacks for the Self-Employed
11:59 Car Buying Tips: Leasing vs. Buying and Financing Strategies
15:21 Navigating Family Loans: Should You Lend?
17:40 Investing in Startups: A Cautionary Tale
19:38 Wrapping Up: Achieving Financial Freedom
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Welcome to the Financial Freedom Podcast
Hello and welcome to the podcast. Thank you so much for listening. I am Michelle Moses, your host. I'm a certified financial planner, realtor, and former e commerce store owner. And we are going to talk today about my most frequently asked questions. A lot of these are not long enough to be put into an entire podcast.
So I thought I would just kind of lump them all together. And answer your questions because these are, I get, just, you know, friends, people that have paid me hourly, all that kind of stuff. They just call with different things. And, these are the ones that I get the most. So let's just go ahead and dive right in and.
Maximizing Your Savings: High Yield Accounts Explained
So the number one most frequently asked question that I get is where should I put my cash? [00:01:00] Number one, hands down. I must get to ask this every single week. So right now, obviously there are some high yield savings accounts that are paying like 5. 2%. If you are just at like Bank of America or your bank and you have it in a savings account that's like linked to your checking, um, I would highly recommend that you get that money out of there and you put it into a high yield savings account.
If you search high yield savings account online, you are going to see a ton that come up. Like yesterday I searched this and there were like four pages of, you know, legit banks that you could invest in. And then they also, you know, like compare them side by side, you know, if you go to bankrate. com. I, and I, You know, there's, I don't know that I want to name some of these because, they do go up and down and some are better at times than others.
But I would just urge you to only go with a bank that you've heard of. I don't like to go with something that is just I've never heard of it. Uh, you know, sometimes [00:02:00] there's even ones that you see on the street that are still paying like five to 5. 2 percent right now. And I'm recording this right before Thanksgiving 2023.
So I would highly recommend that you put it in a high yield savings account. And then basically what you're doing is you're going to link that to your checking or savings account that you have at your bank, and it will usually transfer within one to two days. So it's not a big deal. If you're worried about overdraft fees or something like that, then I would leave it some in your savings account.
But, you know, these high yield savings, it's kind of a no brainer that you'd put it in there and earn 5%. Right now, the rates are just really, really good. Whereas, you know, a couple years ago, they were just, you know, 1 percent and it was, it didn't matter where you were. And, but, you know, when people have a large amount of cash and they're kind of waiting to do something with it, I do recommend putting in a high yield savings account and again, just link it.
And then that way you can just transfer back and forth. And it's not a big deal. And then you can also move around. Like I've got people that open them, you know, [00:03:00] every couple of years, and then they move and kind of chase a rate. I don't think that you need to go get a CD, but people are. So I don't know.
I think this is just a history thing. I've never been into CDs because it locks up your money and you don't really make that much more to make like a 0. 2 percent more interest so that you lock up your money in six months. I don't think that's worth it. So I, you know, just put it in a high yield savings account.
Don't do the CDs. And that way you have, the ability to take your money out if you want it. But you know, if you're not going, if you know, you're not going to touch it and you want to do a CD and it ends up paying 1 percent more than, you know, go for it.
Finding a Good CPA: Navigating Tax Preparation
The number two question that I get is, do you know a good CPA?
I get this all the time, obviously, between January and, you know, April, or probably May, sometimes, if they haven't gotten the taxes done, and I have to tell you that good CPAs are really hard to come by. Having a tax preparer that is good. [00:04:00] It's going to come up with strategies and ways for you to save taxes.
It's very hard to find somebody like that. Most of the time, tax preparers are plug and play, doing as many tax returns as they can, and you would have to have a special planning session in order to figure out how you could save more taxes. And CPAs, a lot of times what I'm finding nowadays is that.
They are only taking clients that are business owners and are paying like 600 a month and they need kind of that advice and they need the constant monitoring of things and, you know, brainstorming, I should say, if you don't have any of that, you might be better off, honestly doing some research yourself or scheduling maybe some time there's, you CPA in your area, That you could just pay them by the hour to look at your taxes and say, Hey, you know, do you see anything to where I could be, deducting something that I'm not?[00:05:00]
Most of the time, this comes from when you are a business owner. If you have a job where you are a W 2 employee, so that means that you're a salary and the company gives you a W 2 at the end of the year. You probably don't have that many deductions that you're missing. The time that there's deductions is when you own real estate.
And when you have your own business, then you really get into the minutiae of I can deduct this meal or this networking event, or, you know, can I deduct my clothing? That is where you probably need somebody to ask questions. questions of to make sure that you're doing it right. And honestly, there's a lot of great bookkeeping services out there nowadays, where they can help you of whether it can be categorized or not.
And I think that they do a pretty good job. I mean, you might be missing a little bit, but at least it'll get you started and it'll get you to be thinking in that way of things that you can write off, you know, like your home office. [00:06:00] any rent that you have, you know, the mileage on your car of how to write that off, and it just kind of takes some experience of, of learning how to do that, but, yeah, finding a good CPA that is going to be thinking about your situation and what you need to be doing is very difficult and it took me a lot of years to even find one that I was happy with.
And even the CPAs that I meet now. you know, most of them aren't taking new clients because they're so busy. And, if you listen to the podcast, like I think two podcasts ago about S Corps, I had Jared on and he was explaining how hard it is for CPAs to get their license nowadays because it's so many hours and so many, the education is so high and you have to have so many hours of work and the graduate degree and all that.
And then the testing that, there are becoming fewer and fewer CPAs because people aren't going through that. It's. because of people's life situation they need to make some money and live. And so I'm not saying that they're bad and that you necessarily [00:07:00] even need someone with CPA after their name there's a lot of good tax preparers out there.
I but give. Yeah I I think people are really looking for Tax preparers are people that will, um, think about their tax return and, and not just do the plug and play thing. So I get that at that call a lot. And I have a really hard time referring that one out because I don't really know anyone, but if you know someone and you're listening to this, please send them my way.
I would love to talk with them and maybe even have them on the show, who knows, but give them some business. So let's see, let's move on to number three.
Health Insurance Hacks for the Self-Employed
Number three, most asked question is about health insurance. And this is a big one for people that are self employed. When you are employed with a big company, your health insurance is usually pretty good.
And your premium is not that much. This question mostly comes from business owners. And honestly, I have dealt with this for a long time. I'm lucky now we were, on our own health insurance for years, but now my [00:08:00] husband has a job at a very large company and so we don't have this issue anymore. But I do have firsthand experience with this health insurance thing and searching for it every single December.
My opinion. The worst time of year. Like, why can't we do this in January? We're all bored. But I don't think that there is a good health insurance plan out there outside of the, the ACA health, healthcare. gov. And most of the time you are going to get a credit on your taxes for whatever the, premium is.
So they'll tell you what the full premium is, but then when you put in whatever your income is and what your, what it says on your taxes, then they're going to give you credit of so many dollars. So, I don't think that there is a good health insurance plan out there outside of the ACA health. It is the best insurance that you're going to find.
There are so many other different insurances out there and I have tried to refer people to these different health programs. I have tried them. A lot of them are coops or things where people are like grouping together to try to get a huge group. But the, [00:09:00] the payout, like you, you pay a little bit and I don't feel like the benefit is that much.
Whereas with the ACA, that with the healthcare marketplace, I guess I should say, You are getting at least you're going to get some of your annual exams covered. You're going to get like a colonoscopy and a mammogram and you know, all of your yearly stuff you'll have covered. If you're going to have a baby, it'll be covered.
So, you know, it is worth it if something is going to happen. I understand that if you're young, and It's, you know, you're, you don't think that you're going to use health insurance. I completely understand that you just want to pay something. Then maybe you're just going to get an indemnity plan for a couple hundred dollars a month, and that's fine too.
I've seen people do that. You got to do what you got to do. You know, I mean, health insurance is really expensive and if I could do something about it, I don't really understand why we have different health insurance based upon just where you're employed. I truly think that we should all be able to get the same [00:10:00] great health insurance that you have with if you work for a company, uh, because you get dental, you get vision, you know, you get the whole gamut and it really doesn't cost you that much because there's so many people putting into it.
I really wish that self employed people, um, or people that aren't employed, that they could get health insurance that, was just as good, for maybe the same amount. And the reason that the health insurance, when you work for a company is so much cheaper is one, you've got a huge group, but two, the, the employer is probably paying, you know, 50, you know, 30 to 50 percent of whatever your premium is.
They are required to pay part of your premium. That's part of the deal of doing group insurance. So I. You know, it's, it's not that complicated anymore. It used to be hugely complicated. I used to sell health insurance way back in the day. But if you get on health insurance, just get yourself a high deductible plan, and then maybe get a health savings account, which is a savings account that is specifically for your [00:11:00] healthcare expenses, you'll get a tax deduction on that, just like you would, if you put money into an irregular IRA.
And, and then it can just accumulate if you don't use it. So it's just another savings vehicle. The issue that people have with health insurance is just cashflow. Honestly. I mean, all of that sounds great of what I said of like, let's get this high deductible plan with, you know, 1, 500 deductible or a 2, 000 deductible and then get a help parrot.
With a health savings account so that, you know, basically the money would be in the health savings account to pay that deductible. But the issue that people have is just cash. They don't have the cash to pay the health insurance and then also put it in the HSA. So I totally get it. I'm just telling you that those are the options out there.
And there is a reason that people are all screaming about health insurance is because the self employed people, they really, I think we really do get the short end of the stick and I wish that it would change. So let's move on to the next question.
Car Buying Tips: Lease vs. Buy and Financing Strategies
The most [00:12:00] other frequently asked question that I have, number four, is I need help buying a car.
What would you recommend? And while I am no expert at You know, wheeling and dealing for a car or anything like that. I have an uncle who absolutely is. And his one tip was going on the last day of the month. So I'll pass that on to you, but I'm again, no expert at that. But my one tip with buying a car is, people are asking, you know, should they buy, should they lease, you know, it really depends on you.
Leasing a car. If you've got your own business, you can obviously write it off. Leasing a car is more expensive, but if you do not want to have all of the maintenance, like you just like having a new car for a cheaper price, because it is, if you buy a new car and you finance it and you're buying it outright, Your payment's going to be higher than if you lease it.
So if you lease it and you got a lower payment and you got it for work and you're like, I just don't want to [00:13:00] have a car that's over, you know, 75, 000 miles so that I don't have to do all that maintenance. Okay, fine. So then go lease your car and then know that you're going to lease one the next time. If you want to create some more independence, I would recommend buying your car, uh, or maybe buying a used car.
Because I think that the quickest way to build wealth is to kind of, I don't know if I want to say, like, pretend that you're poor for a while, you know, have an older car, pay it off, and you know, the two biggest things are the car and the house. So if you could have a cheap car payment and a cheap house payment, obviously you're going to have a whole lot money, more money to live the rest of your lifestyle.
But my number one tip I should, I'm. I'm so long and getting to this, if you're going to finance, the car is go to something like lendingtree. com, actually input your information so that they're pulling your credit report, um, or they're pulling at least what your credit score [00:14:00] is and have them give you a quote.
And I've done this the last couple of times that we have purchased a car. And I go in there and I'm like, okay, I got this. And I do, I print it out, honestly, just so that they can see that it's legit. And I say, okay, online, I was getting this rate for this amount. Can you, beat it? And they will go back and it takes like five minutes and they say yes, because they want the financing.
I haven't had them say no. I mean, maybe if it's lower than I guess you could go online. But when you go to LendingTree and you input all of your stuff, they get back to you right away. I mean, you know, they, they think you're at the dealer. They, they want your business. So do expect things back.
They will contact you quite a few times. And then if you say you bought something, then I didn't have any problem with them. And I've never had anybody say they had a problem with saying, no, I bought something and then them leaving them alone. So that is my tip to buying a car is, you know, to go on a site that's like Landing Tree or someplace that's going that you can [00:15:00] apply for multiple loans at one time.
And it's going to send it out to all of these credit unions and banks and things like that, that are out there. And then they're going to get back to you right away with what the rate is, and the terms, you know, how many months. And so I think that is a very quick way. And it's a way to take out a lot of the headache of buying a car.
Okay.
Navigating Family Loans: Should You Do It?
And my last most frequently asked question is should I loan my family member money? And this is a really tricky one. Uh, as you can tell with my sign, I, you know, I don't have a problem with this and I haven't had anybody really have issues with loaning a family member money. Uh, you know, most of the time you kind of say, just be okay, not getting it back.
I just say, put something in writing. Okay. Because I think if you put it in writing, it makes it more legit and they know that you're serious versus, you know, you're just giving it to them and it's like, okay, pay me back in six months, [00:16:00] you know, no, I mean, treat it like it's a business transaction, write up, get a note that's online, get it notarized, uh, make a You could even make it a 1%, you know, rate that you're going to charge them, but do you know, like maybe charge them something so that they're, they've got some skin in the game.
Um, but if you just want to give people money, that's a whole nother story. I mean, that, that's fine. If you've got the money and you want to give people money, but we're talking about family members coming to other people asking for, you know, like a 25, 000 loan, a 50, 000 loan or financing. Um, I have one client whose, um, brother, he financed or helped finance a dental practice and he did pay him back.
I mean, cause it was like a business transaction. So I don't necessarily think that all of that is bad. I think when you read it in the news, you know, there's all these articles about all of that. Uh, I think that that, you know, they kind of get a bad rap, but if you put it [00:17:00] in writing and again, have it notarized, I just don't really see a problem with it.
So, um, yeah, but feel free to call me or write and see if the situation is different, but it really just depends on you and how you feel about it. If you feel like you're being taken advantage of, I'd probably say no. And if you feel like they're, you know, they borrowed money from you and not paid it back, uh, then I would be prepared to not ever get the money back.
Uh, so, but if you feel like they will pay it back and you've got some terms on the loan. you know, then you're probably okay. But if you've loaned money to this family member all the time and you just never get the money back, then I would probably say you're just going to be kissing it. Goodbye.
Investing in Startups: A Cautionary Tale
Uh, oh, you know, I'm going to put a number six on here because I do have another one and I get this question a lot too, is that people come to, uh, some of my clients and they, so this would be number six, most frequently asked question is, should I invest in such and such company?
And honestly, it's usually an app, uh, or some sort of. [00:18:00] competition, or it is a healthcare app or something like that, a workout app, um, or, you know, just some sort of business. And they're raising money for their business. And it's usually in increments of 000. I, and this includes some of the medical marijuana that was going on quite a few years ago.
Some of that did turn out when it was a legit business, but when it was just friends and family, I have never seen one of those pan out. Uh, I don't know if it's just my luck. I'm not saying that they're all bad. I just, if someone's coming to you and saying, Hey, I've got this business idea, you know, there's a lot of business ideas.
I would just really, really research about what the competition is and how long it's going to take them to get up and going. Because in my experience, it takes at least five years to just get, you know, your feet under you with a business of where you're able to make a living. Uh, and if this is a highly [00:19:00] technological, you know, a lot of the, that takes, um, some very high level skill, you know, you're having to hire some coders and things like that.
Uh, but maybe that's going to start going down with all the AI, but you know, I haven't seen any of this pan out. Um, so my. Answer has usually been no on that, um, but people honestly, they usually ignore me and go ahead and do it. Uh, and which I think is funny. And I don't know why that is. It's just funny that I'm telling you that, that most people, they go ahead and do it and then, um, they don't get the money back.
And I've had that happen probably a dozen times. So, uh, Again, these are all the most frequently asked questions.
Wrapping Up: Achieving Financial Freedom
I hope that this helps you and creates a little bit more freedom in your life. And I hope you have a wonderful day. And thank you so much for listening. Please subscribe to the podcast and give me a five star review.
If you're enjoying it, thank you so [00:20:00] much.
Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as professional financial advice. Always consult with a qualified financial advisor or professional before making any financial decisions. The hosts and guests of this podcast are not responsible for any actions taken based on the information presented.