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In 2017, Clinton Portis, a former running back for the Washington Redskins, confessed he almost murdered his financial advisor. One day Portis was a multimillionaire living the glamorous life of a professional athlete. Then, he found himself  living in a subtle two bedroom apartment in Northern Virginia. Before he almost attempted murder, he was sitting in his car with a gun, waiting for the person he blamed his financial demise to come outside. Fortunately, a friend talked him out of pursuing murder.

Overnight success

In 2004, Portis made history by becoming the highest paid running back in the NFL. He signed an eight-year contract with the Redskins for $50.5 million. However, his lavish lifestyles, poor financial advice, risky investments, and supporting several family members led to him filing bankruptcy in 2015.

Wealth cannot teach you financial literacy. Without knowledge, you are susceptible to financial failures whether you have millions or hundreds in the bank.

Here are four tips to help you manage your money, especially when you hire a professional.

Get Educated

Before you hire someone to manage your money, invest in your own education. Read good personal finance books to help you learn more. My favorite money books are Rich Dad, Poor Dad by Robert Kiyosaki, The Automatic Millionaire by David Bach, and The Power to Prosper: 21 Days to Financial Freedom by Michelle Singletary.

With education in hand, start to work on your finances. Start by tracking your spending.  Also make sure you have at least $500 for an emergency. If you don’t start saving now. Then, create a budget for yourself. Make sure your budget includes all of your monthly expenses, saving for your financial goals, setting aside funds for retirement, and paying down debt.

Seek Referrals, but Do Your Own Evaluations

Portis hired financial advisors that were registered with the NFL Players Association. And yet, one opened an account by forging Portis’ signature and took $3.1 million from his account. Another advisor convinced Portis and other NFL players to invest in a securities company that was a part of a Ponzi scheme. Investors lost almost $14 million in that deal.

Even when an advisor or financial coach is referred to you, you must do your due diligence. Research the company they work for and read the reviews. You can also research a business on the Better Business Bureau. If a company has a record of unpaid claims and poorly rated insurance policies, think twice before investing in their life insurance. If you plan to hire a certified financial planner verify their certification with the Certified Financial Planner Board. The time you spend doing your homework will save you tons of money and headache later.

Trust but Verify

The goal of a financial advisor should be to review your finances and recommend the best products and services for you. They have a fiduciary responsibility to do what is best for you and not what’s best for their wallet. However, when someone is persuading you to invest in something, consider their recommendation.  Then, do your own research.

If you decide to invest, review your statements quarterly to verify the investment’s performance and fees. Investing in the stock market and other investments can be risky and returns are not guaranteed. Still take the time to learn what your financial statements mean and ask questions until you really understand the documents.

If you still have questions or doubt, seek a second option. Many advisors and money coaches offer free consultations to review your finances. The really good ones will tell you if you have a good product worth keeping. Trust me, this happened to me before. When my current advisor told me the truth, I had so much respect for him I made sure we did business together.

Diversify Your Assets

Everyone knows not to put all their eggs in one basket, and yet Enron still happened. Several employees had all or most of their retirement portfolio invested in the company’s stock. When the news of the scandal hit, the company’s stock went from $90 a share to 0.67 cents. People found themselves out of a job and their retirement savings wiped out.

If you are new to managing your money, start with a basic savings account but seek the highest interest rate possible. If you accumulate a bit of money and are ready to invest, consider mutual funds before specific stocks. Mutual funds allow you to invest in a bunch of companies and spread out your risk. Later, you can consider stocks and bonds for specific companies.

Other ways to invest include home ownership. If you invest in real estate, like I do, then it becomes a significant part of your portfolio. Even with several types of investments, make sure you diversify. If your retirement account has most of its stock in domestic companies, make sure your mutual funds include international companies. What you do not want is for your retirement account, stocks, and bonds to all be invested in the same companies or same industries. If those one or two companies fail, there goes your fortune. Cash in your portfolio is not a bad thing either. Cash assets will give you access to fast cash when you need it for an emergency.

You are in control

Bottom line is, it is okay to hire someone to help you understand and manage your finances. However, you have to take time to learn for yourself so you can understand what they are recommending. You are ultimately responsible for what happens to your money. Take control of your life and your finances today.

If you want a free financial analysis don’t hesitate to contact me today! I can help you better understand your finances and build generational wealth.