MCKINNEY, TX - 11/10/2017
With so many choices for financial planning and so many pulls on our time and money, making sound financial decisions can prove challenging. The right tools and the willingness to wait, may help mitigate that challenge.
There are many choices when it comes to financial planning. From deciding whether and how to invest to selecting the right insurance products to suit one’s needs, choosing the right financial services can seem a daunting task and the stakes are high. One wrong move with one’s money can spell years of financial hardship, so it’s important to know what to do to avoid mistakes from the start.
“People absolutely shouldn’t be rushed into making financial decisions,” says Danny Koh, Principal of Danny Koh Insurance. “Ideally, a planner or insurance agent will ask lots of questions and do their best to create a custom plan. There is no one-size-fits-all when it comes to these things.” Indeed, one size cannot fit all since considerations such as occupation, marital status, family size, age, and other personal factors determine what products and solutions work for a particular person. Because of this Koh notes: “It’s really about employing the right strategies more so than using particular products.”
A critical factor in any type of financial planning is being able to see the big picture and understand the long-term-goals. Koh says that because people tend to want to maximize their enjoyment of life and often have a hard time delaying gratification without good cause, transparency is a key factor in helping people meet their goals. “People have to understand what is happening with their money and why,” he continues, “They need to be informed when things are working and when they are not so that they can make the best decisions for themselves.” A key factor in this is asking the right questions, and getting to know a client and what’s important to them in a nuanced and multi-faceted way. As such, the human touch is still an important factor despite the introduction of “robo adviors” and other automated financial planning tools.
In addition to seeing the big picture, it is also important for clients to be smart with their money and to understand how debt works—and doesn’t. Although it is tempting, Koh advises against going into more debt in order to alleviate debt. Quick fixes like high-interest credit cards and home equity loans may help in the short term, but in the long run, most people find themselves worse off after employing these methods. “Credit cards can’t solve the problem, nor can printing more money,” says Koh. “Unfortunately, debt has become a generational problem, and it’s important to set oneself up properly so that the next generation won’t bear the burden of bad financial planning.”
One of the most important factors in securing one’s financial future is the ability to delay gratification, which is often difficult in today’s world. The allure of dinners out, the hottest gadgets, trips, clothing, or other desirable things and the ease of being able to point, click, and spend, translates to many people are living above their means and spending money they don’t have on things they don’t need. Koh notes some clients will hesitate on making life insurance premium payments, all the while spending money on other things. “Insurance and the like aren’t the most fun things to spend money on so of course people will want to spend on other things first,” he adds. Aside from the fun factor, some of the hesitation may stem from clients not understanding the full potential of insurance as a wealth maximization tool. In addition to providing death benefits life insurance has morphed into a much more customizable asset, over time, so consumers are able to create policies that meet their specific desires for the short and longer term. Additionally, because of special tax benefits that can apply to savings through insurance policies, they can positively contribute to a portfolio that maximizes benefit while minimizing risk.
“At the end of the day, the ability to help clients solve their financial problems is the most important thing,” Koh concludes. Helping them to understand their choices, make the best decisions for themselves, delay gratification when necessary, and utilize those tools that are the best for their circumstances are critical steps in that process.
|person_outline||Full Name:||Danny Koh|
|phone||Phone Number:||(818) 825-6129|
|business_center||Company:||Danny Koh Insurance Agency|
|mail_outline||Email: Send Email|