NAPFA Consumer Education Foundation

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Americans need financial advice they can trust. Given the complexity of the financial world and the shell game of financial salesmanship, it is no wonder so many Americans are confused. When it comes to financial planning, few industry professionals actually sit on their client’s side of the table and uphold a fiduciary responsibility to help clients determine which choices are truly in their best financial interest.

If you have questions about your finances, the non-profit NAPFA Consumer Education Foundation is offering a series of monthly presentations in Charlottesville, beginning this Saturday.

The NAPFA Consumer Education Foundation is a new forum designed to help you make these important financial decisions. The Foundation is dedicated to bringing consumer financial education to communities across America. The core focus of the seminars is to represent the best interests of community participants by providing an educational setting that engenders sound decision-making about important matters of personal finance. Each month, an industry expert (most of whom are fee-only financial planners and fiduciaries themselves) will provide an interactive question-and-answer forum covering a broad range of financial planning topics.

Statistics show that fewer than 20 percent of investors are literate about important investment concepts. On average, women are less knowledgeable than men about matters of personal finance, and older investors are often less informed than younger investors.

In consumer studies, most investors did not understand the basics about the fees associated with “no-load” funds, the purpose of diversification, or the relationship between interest rates and bond prices. Most investors had never prepared a financial plan or checked out the track record of their broker or financial advisor. And, most did not understand how their financial advisor was actually being compensated.

Many professionals in the financial services industry are salesmen and have no legal fiduciary responsibility to act in your best interest. Financial advice is often little more than a sales pitch for a financial product that turns out to be counter-productive to helping you achieve your goals.

As recent reports have shown, many Americans are in for a rough retirement. A few decades ago, company pension plans would cover most of an employee’s financial needs in retirement. Today, most companies have switched from a defined benefit plan to a defined contribution plan.

Poverty in retirement can be a living hell. Many families spend more time each year planning for their summer vacation than they do for their financial future. By your retirement age, if you have not secured the financial means necessary to support you for the rest of your life, you are not likely to get a second chance.

Sadly, few employees are fully participating in their employer’s plan. In fact, few employees even know how much they should be contributing each month to meet their retirement goals. Most employees do not attend financial seminars even when they are offered in the workplace. They are skeptical, often for good reason, that the advice is a thinly veiled sales pitch.

According to the Jump$tart Coalition for Personal Financial Literacy, high school graduates possess very little knowledge about personal financial skills. School systems do not require that their graduates know and understand the financial concepts of earning, spending, saving and investing. And, parents often avoid talking to their children about subjects such as budgeting and saving, in part, as a result of their own failure to apply sound money management principles at home.

Although it is designed for adults, the new series of talks sponsored by the non-profit NAPFA Consumer Education Foundation is also an opportunity for parents to bring their teenage children who have shown an interest in gaining the financial literacy that will make the difference between living in poverty or prosperity in the future.

Earning a paycheck is not the same as being able to make informed, responsible decisions about what to do with your income. As a result, those who practice sound financial planning principles get wealthier and those who turn a blind eye often wind up getting either bad financial advice or none at all.

The upcoming series of presentations is an opportunity for community members of all ages to learn about important financial skills such as how to invest in your 401(k), how to allocate contributions between the various tax-deferred retirement plan options, how to save for college through a 529 plan, how to analyze the costs and benefits of paying down your mortgages, and how to effectively build up savings in your taxable investment accounts.

I have the honor of making the first presentation this Saturday, October 21, 2006, from 12:00 p.m. until 1:30 p.m. at the Northside Library meeting room in the Albemarle Square Shopping Center. I will be speaking on “The Three Most Important Things You Can Do to Maximize Your Financial Well-Being.” The first discussion will provide a general framework and overview of the presentations to follow in succeeding months.

On November 11, 2006, Blaine P. Dunn, CFP, will be speaking about “Budgeting Like a Millionaire: How to Grow Wealthy Saving and Investing.” And on December 9, 2006, John G. Bowen, CPA, CFP, AIF, will be speaking on “Year-end Tax Planning.”

All presentations will be held at the Northside Library meeting room in the Albemarle Square Shopping Center from 12:00 p.m. to 1:30 p.m. All presentations are free and open to the public. You are encouraged to attend and to bring your financial questions.

If you would like a schedule of upcoming talks, visit the Charlottesville NAPFA Consumer Education Foundation website at www.napfa.org/consumer/NCEFCharlottesville.asp. To put your name on the mailing list for notification of future meetings, send an email to Charlottesville at NAPFAFoundation.org.

Photo by Sapan Patel on Unsplash

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. Favorite number: e (2.7182818...)