CFPs (advisors on the sell side) tend to give their clients general advice and recommendations. Even when they personalize the advice, they tend to use software that provides one-time recommendations.
As one of my colleagues says "CFP is showing the client a recipe. While what we do is give the client the recipe and show them how to cook it."
Financial consultants have the ability to pool all of their resources in order to provide the client with the best planning. That's a major distinction. Consultants also aren't promising any type of outrageous returns per year, because they focus more on the long term education. The CFPs...the short term performance. This minor difference separates one losing their clients billions and one keeping their assets safe. Where CFPs are loyal to the client, they tend to have some conflict of interest situations if they work for a discount broker. These brokers give them commission (this is where those hefty bonuses come from) for the profitable trades they make, at the time of the trade. And more times than none, commission is even higher if they use one of the broker's affiliated products. Ever wonder why right before the economic crash banks dished out the largest bonus ever? Financial planners/advisors were selling the riskiest investments in bulk and it collapsed on their heads a short time after. However, even with the hurting market they made their money.
This money that these scrupulous advisors made our now coming back around to attack them. President Obama has now endorsed a $9 billion tax bill, for banks, over the next 10 years that will severely hamper bonuses. For those of you that don't know about the bill, he wants the banks to repay the taxpayers for the TARP money that was dished out during the recession. Even banks that have paid back their part of the TARP will be on the raw end of the deal.
Moreover, the greed of some affected the outcome of all. And now all have to pay for it including the honest and responsible CFPs. Don’t get me wrong, I use CFPs and other financial advisors to refer my clients when they need more specific investment recommendations. However, that’s only because we at Cloud 9 are not authorized to give specific stocks and bonds advice to our clients. People across the world we see more financial consultants (counselors) rise up and capitalize on the public doubts of current CFPs.
Friday, January 22, 2010
Monday, January 18, 2010
What does being a Millionaire really mean?
I recently read this article,$1 Million Does It Still Mean You're Rich?, and I decided to write something on it. Enjoy.
It seems as time goes on, money becomes more and more worthless. People who were millionaires in the 19th century would be worth a billion dollars now. On the other hand, people who are worth a billion dollars will only be worth a million by the time the next century rolls around.
Inflation. This word doesn’t mean much too many of those uneducated in financial literacy. They believe that a 5% return on investments is 5% more money. Au contraire, with an inflation of 7% you’re actually losing money at a rate of 2%. If you don’t follow, keep reading…
The cost of living for residents varies in almost every state. Even in some states the cost of living can vary vastly by just going 10 miles outside of the metro city limits. This is where millionaire status may mean next to nothing depending on where you live. If you live in New York, $1 million will get you an extremely small apartment (and this is getting even worse as years go on). On the other hand, if you live in Nebraska, $138,000 may get you a 3 bedroom (and 3 bath) home. These effects on the housing market are only magnified when inflation is taken into consideration. In years to come this gap between what you can afford based on where you live will widen. Fortunately for those in New York, the pay for simple jobs is probably way higher compared to Nebraska using the federal minimum wage.
In consumerism, the race to $1 million is getting easier and easier and less and less glamorous. Since being a millionaire is no longer an elite status, people tend to buy expensive “toys” to show how liquid there millions are (most millionaires are so because of their real estate holdings, not many have access to $1 million in cash).
Millionaire land is beginning to grow in population. And with such growth, being a millionaire no longer gives you the label of being “rich” or “affluent.” Those two are only used to describe those of true wealth, not just those with money.
It seems as time goes on, money becomes more and more worthless. People who were millionaires in the 19th century would be worth a billion dollars now. On the other hand, people who are worth a billion dollars will only be worth a million by the time the next century rolls around.
Inflation. This word doesn’t mean much too many of those uneducated in financial literacy. They believe that a 5% return on investments is 5% more money. Au contraire, with an inflation of 7% you’re actually losing money at a rate of 2%. If you don’t follow, keep reading…
The cost of living for residents varies in almost every state. Even in some states the cost of living can vary vastly by just going 10 miles outside of the metro city limits. This is where millionaire status may mean next to nothing depending on where you live. If you live in New York, $1 million will get you an extremely small apartment (and this is getting even worse as years go on). On the other hand, if you live in Nebraska, $138,000 may get you a 3 bedroom (and 3 bath) home. These effects on the housing market are only magnified when inflation is taken into consideration. In years to come this gap between what you can afford based on where you live will widen. Fortunately for those in New York, the pay for simple jobs is probably way higher compared to Nebraska using the federal minimum wage.
In consumerism, the race to $1 million is getting easier and easier and less and less glamorous. Since being a millionaire is no longer an elite status, people tend to buy expensive “toys” to show how liquid there millions are (most millionaires are so because of their real estate holdings, not many have access to $1 million in cash).
Millionaire land is beginning to grow in population. And with such growth, being a millionaire no longer gives you the label of being “rich” or “affluent.” Those two are only used to describe those of true wealth, not just those with money.
Saturday, January 9, 2010
Our Goals For You
Cloud 9 Financial Consulting does its consulting in a variety of ways. We can serve our domestic clients from anywhere in the world no matter where they are. And although international clients don’t have as many offered service packages as domestic clients. We will give you the same excellent service as we would if you lived only a block away.
We serve our clients with an emphasis on taking advantage of recent advances in technology. Here are some examples of these advances: cloud computing, Google wave, shared Google documents, and Skype, as well as WebEx. The different choices of technology separate us from almost every U.S. financial planning institution. While we will sometimes drive(and eventually fly) out to meet with you, our pride and joy is that we can meet with you virtually. We are also willing to provide consulting through phone calls.
Our consulting process is long but very thorough. The reason for this is that with more information, we can help you better than anyone else can. Our goal is to walk with you as you reach financial freedom, not to just send you on your way with a map.
Now, on to the good stuff.
We serve our clients with an emphasis on taking advantage of recent advances in technology. Here are some examples of these advances: cloud computing, Google wave, shared Google documents, and Skype, as well as WebEx. The different choices of technology separate us from almost every U.S. financial planning institution. While we will sometimes drive(and eventually fly) out to meet with you, our pride and joy is that we can meet with you virtually. We are also willing to provide consulting through phone calls.
Our consulting process is long but very thorough. The reason for this is that with more information, we can help you better than anyone else can. Our goal is to walk with you as you reach financial freedom, not to just send you on your way with a map.
Now, on to the good stuff.
Friday, January 1, 2010
In the beginning....
We decided to start this blog so that potential clients and curious readers can be introduced to the kind of consulting we perform at Cloud 9.
Here we will post real stories, situations, or problems and then provide our advice for that specific situation as if the subject of these posts, were our client.
We will post to the blog once a week and on occasion more than that. This blog is our coming out party, sort of. We want you to, the public, to see our consulting practices.
Our philosophies are pretty different simply because they are unique. We apply both simple and complex theories; both rudimentary and advanced. If there are any questions go to our website and e-mail us concerning how we came to a certain conclusion, or maybe, what certain terms mean in the context that we write them. We are here for our readers, we don’t want you to be here for us.
A little background on Cloud 9, we are a web-based company that noticed the financial industry lagging behind the cloud computing curve (hence the name). So we formed Cloud 9 in order to take advantage of this information platform. Cloud computing has multiple benefits, a major one being that we can service clients all over the world. Or in other cases, serve domestic clients who like to travel.
More on Cloud 9 Financial Consulting in our next blog….Our next blog will explain how we conduct our business in order to take advantage of cloud tech.
Happy New Year!!
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