So you might be thinking “why is Sue talking about ways to lose your money when she usually talks about how to build my business?” Here's why – 9 out of 10 business owners I work with are doing absolutely no active retirement planning. 9 out of 10 are living hand to mouth. No savings for a rainy day, no money socked away for old age.
I can guarantee you that both rainy days and old age come to small business owners. As a part of the planning I do with my clients, we look at what they are doing to provide stability for themselves in the long term. We all need a cushion – against getting sick, losing our business, catastrophe. It happens.
I'm all for wise savings and investing. And just like there are a ton of bad business coaches out there, there's a ton of poor financial advisors, too. So before you go engaging one (which I believe we should ALL have as a member of our team), here are 4 ways to check them out.
- Check to see if the person you are trusting your money with is a Registered Representative by going to the Financial Industry Regulatory Authority and entering their name at finra.org/brokercheck.
- Check your state Department of Commerce and Insurance (or similar name) if you are in the U.S., every state has one. In Tennessee where I live part time, the Securities Division has a website where you can look up registered advisers. You can do the same in your state.
- If you are dealing with a life or health insurance agent you can review their license by going to your state's website. In Tennessee you can find this in the Insurance Division of the Department of Commerce and Insurance. Look for something similar in your state.
- See if your advisor has passed the annual background check with the National Ethics Bureau. You can find out by going to www.ethicscheck.com. NEB goes back 7 years looking for criminal, civil, and business violations.
Please don't think that you can't lose your money. I personally know 3 people who lost every dime they had after 20 years of work because they invested with a high profile person who was nothing but a crook. Just look at Bernie Madoff who defrauded very high profile and wealthy individuals along with little guys, too in the biggest financial fraud in U.S. history. Or look at Jake Butcher, a high-profile Tennessean who also defrauded working class people of their life savings. I once hired a man who had to go back to work at age 70 because of losing everything to Jake Butcher.
I believe in building a profitable and successful business. I also believe it is your responsibility to save for your later years beginning right now. But check out any person you want to work with. You do not want to lose your money – you've worked too hard for it!