Managing finances has always been a difficult thing to do. Whether you are an investor or just the typical consumer weighing your budget to last for the rest of the month, at some point in your life, you may have considered hiring a professional to mentor and help you out.
What is a Money Manager?
Money managers can help you through taking over simple financial obligations you do regularly, such as ensure that you pay your taxes, utilities, and debts.
Daily money managers are often confused with portfolio managers or investment managers. The latter group of people is those who will manage a client’s investment portfolio (mutual funds, investment vehicles, etc.) intending to increase money growth through time. This will be through advising the client when to buy and sell stocks and implementing different strategies while monitoring the overall growth performance of the client’s assets.
Do You Need a Money Manager?
For a certain fee, a money manager has the huge responsibility of taking over all your financial needs and obligations and guiding you on how to manage your money well. Among the tasks, a daily money manager could do for you are your basic deposits and withdrawals, bill payments, and month-to-month financial balancing and paperwork. They will also be providing you with an individualized portfolio, continuous advising and guidance, and personalized service.
You must first assess your financial situation. These are the questions you should ask yourself:
- How far are you from your financial goals?
- Do you have a spending/budget plan?
- How often do you sit down and assess your finances?
- Do you have an emergency savings fund?
- Do you check your financial performance?
- Do you have the time to travel to and from your bank to retrieve cash for your payments?
- Can you handle all the paperwork in your finances, such as your taxes?
Through assessing yourself, you can identify the answer to the most important question of all to ask yourself: Do I need someone to manage my money?
Why You Would Want a Money Manager
Guidance from an Expert
Having a professional money manager means you will have the best quality care to help guide both your major and minor financial decisions. Making mistakes and having mediocre performance from your finances has harsh effects – you might end up losing more money! With a money manager, you do not need to worry. You must simply communicate all your ideas, your preferences, and other useful information about your finances and your visualized outcome. Then, check whether everything is to your liking. From there, your daily money manager will do the rest to ensure everything in your finances is as you want them to be.
Resources and Connections
As a money manager, they must have the necessary connections to ensure that the client’s finances, budget plans, and investment portfolio are to their preference. Whether it is CEOs of companies, financial institutions, lawyers, bankers, and money coaches, a money managers connections will be of great help in managing your money and ensuring the ease in processing everything in your financial transactions and dealings.
They also have access to myriads of information, such as analytical data and research reports. This is of great help to ensure a higher probability of success in your financial decisions.
Why You Wouldn’t Want a Money Manager
You’ve Got It Under Control
One of the reasons others do not let someone else manage their money is when they are truly confident about their money management skills. It depends on how much help do you think you need. Some of you may be newly wedded couples starting to plan your finances together. You might be a student juggling all of your expenses, along with balancing every academic endeavor you have. You might also be middle-aged and want to prepare for retirement while still working hard to provide for your daily needs. if you do not see the need for someone such as a daily money manager to take over your finances, then who you might need to consult is a money coach.
A money coach is someone who will only guide and help you in your finances. You will still be the one to handle your activities, unlike money managers who will take over these financial obligations of yours.
If you are the type of person who is more concerned with your spending habits and knowing financial information first-hand, then you also do not need a money manager. Managing your own money will allow you to see how your money works every month and keep you updated on all your tasks, such as paying the monthly bills, managing your investment portfolios, and saving up for your future. By managing everything yourself, you will also be sure that there is no chance of being a victim of fraud.
In the contemporary world, there is no such thing as freebies anymore. Hiring a money manager would entail paying them a certain amount for their services. The typical management fees charged for money manager services nowadays range from as low as 0.5-2% per annum. There are also the performance fees that could range from 10-20% of the profit. Imagine paying the management fee and having $500,000 in profit returns. You will have to pay an additional $50,000 in performance fees, when instead it could be used instead for starting new investments.
Advantages of Having a Money Manager
Continuous Motivation and Advice
Having a daily money manager could greatly help in motivating you through making decisions to responsibly manage your finances. Aside from personalized service, your money manager will also continue to advise you on your financial journey. If you are having doubts or second thoughts in investing, for example, your money manager will find the best information and steps for your money to grow.
Your money manager’s knowledge of financing and investing will help you sleep at night. You do not have to worry about being a victim of financial fraud, knowing that someone is taking good care of your hard-earned money. It’s a good feeling that the money you spend on the performance fees and service charges is worth every penny.
Preparing for Retirement
If you are in the stage of life where you are starting to consider retirement, having a money manager can help you build and prepare for your future. This will include a proper budget, spending plans, building up a savings account, and managing your investment portfolio to grow your assets more as time goes by.
More Time for Family and Self
With the fast pace of the world today, finding time to spend with family and self becomes a non-priority. Hiring a daily money manager means you do not have to make your budget or lose sleep over all your piling expenses. You can instead spend time with your family. Treat yourself to a good night’s sleep. It is important to also take care of your relations and yourself.
Money Managers‘ Usual Clients
Belonging to the upper class of society seems easy. You have all the financial means to provide for your needs and more. On the downside, this is also the main reason why you might need the service of a money manager. Imagine having several digits inside your bank account, several investment accounts, businesses with their corresponding paper works, financing for the whole household, salary for all the persons employed, and much more. When it seems difficult to manage daily expenses, turning to a money manager can take it off your hands.
As you grow old, your cognitive abilities and memory diminish. Therefore, it will be better if you have a money manager. You will not have to worry about losing your money, especially since there are often scamming activities targeting the elderly.
By having a money manager, you will have a person whom you can trust that all of your finances – every penny you worked hard for before your retirement – is and will be put to good use for you and your benefit and is managed well.
These are usually the people who work the extra hours to provide for the needs of their family. Being busy working might simply mean they do not have the time for other activities, such as sitting down to track expenses, constructing a spending plan for the month, revising a budget plan, traveling to and from the bank, and paying the bills. In this case, a money manager can alleviate a large amount of that extra stress.
Those Struggling with Finances
Another type of usual client of daily money managers is those people who are having a hard time managing their daily finances. Hiring a daily money manager may be the life-saver they need to help organize and manage their money.
Finding a Money Manager
Having a money manager can surely work wonders, not only to your finances, but to other aspects of your life as well, such as maintaining a healthy relationship with your family, preparing for the future you can have, or the simple gift of having a good night’s sleep.
It is then important to find the perfect match for you and your financial needs. The American Association of Daily Money Managers is an association of money managers who continuously follow their code of ethics. Among the money manager groups, you can choose from the top-runners in the industry that you should inquire about.
Aside from having low service and performance charges, you should also consider if the money manager you are planning to hire has a good record. They must also share the same vision with you, can easily communicate with you, and can provide you with all the necessary information, knowledge, and tools you need to live without the worries of losing all your money down the drain.