Lacy Rogers

Congratulations on considering purchasing a homestead! Owning a farm can be a rewarding and fulfilling experience, but it’s important to ensure you are financially and emotionally ready before making such a big commitment. So, how do you know if you’re ready to take the plunge and buy a homestead? Let’s go over the key financial factors you need to consider.

#1 – You are debt free

First and foremost, it’s essential to have your consumer debt paid off. This includes all debt from credit cards, medical bills, student loans, car payments, and any other outstanding loans outside your current home mortgage. It is so important to be debt-free before taking on any additional expenses associated with owning a farm. I know it can be discouraging to hear this, and if you have a large amount of debt this step can make you feel 1000 miles away from your dream. But if you are committed to the homesteading lifestyle I promise you the wait will be worth it! After all, you don’t want to be drowning in debt before you’ve even started. I don’t want you to be walking into a waking nightmare of late payments and unexpected expenses, I want you to be living your dream on your property!

#2 – You have an emergency fund in place

Next, make sure you have an emergency fund in place. This should be a separate savings account with at least 3-6 months worth of your expected expenses for both your personal and farm needs. Having an emergency fund can give you peace of mind knowing all the work you have done completing step 1 won’t be undone by one (or even a few) unexpected expenses. And believe me, a homestead is full of unexpected expenses! A sick animal, a septic system on the fritz, or a mangled fence line are all stressful enough without having to worry about where the money will come from to fix them. Give yourself the gift of knowing you can handle what comes your way BEFORE you invest in your property.

#3- You have a down payment

Once you have your consumer debt paid off and your emergency fund established, it’s time to consider your down payment and budget. This is money over and beyond your emergency fund! Ideally, you should have at least a 10% down payment saved for the homestead you’re considering. A 20% down payment is ideal, because you will not have to pay PMI (private mortgage insurance) in addition to your monthly mortgage.  You should shoot for your budget to include payments for your farm, including taxes and insurance, and to stay within 25% of your take-home pay. If you are financing the property and the home separately, both of these payments together should still fit these criteria. Keeping your payments within this range allows you to still live life without the crushing weight of a too large mortgage keeping you strapped for cashflow. Afterall, you have new animals to buy and garden beds to build!

#4 – You are committed to building at the speed of cash

It’s important to be realistic about the cost of adding to and renovating your new space. Farms often come in varying states of disrepair, and may require certain improvements just to be livable. These would be things like having functional plumbing and safe electric, resolving any foundation or roofing issues, remediating mold, adding shelter for already owned animals, etc.  If there are repairs or renovations that are essential in order for your property to function with you and your family, those costs need to be figured into your down payment expenses and considered during step 3. For all other improvements not absolutely essential for occupation, commit up front to making those improvements on a cash basis without dipping into your emergency fund. These things we homesteaders often consider high priority, but they are not required to live. These types of renovations include adding animal shelters for future livestock, renovating or adding in gardens, renovating a kitchen, changing out flooring, etc. These things are not essential. It is imperative you slow roll these additional renovations and commit to doing them only when you have the cash available. This will help you avoid getting into more debt and ensure that you’re financially stable in the long run.

#5 – You still have room for your future

It is so easy to get wrapped up in what we are doing in the next 5 years sometimes it is hard to remember that some day we will be dependent on the savings from our younger years. Even homesteaders will have to retire at some point. While we dream of being self sufficient and working the land on our own, the reality is that ideally some day we will have the privilege of being old! With age comes health related issues, limited mobility, and the potential need to have help around the farm. While we can plan for friends or family to help out, it is no ones joy to think about being an obligation or a burden to those we love. Therefore it is essential, even through a homesteading journey of independence, that we consider what will happen as we age. A great place to start is to save 15% of your income into a retirement focused account. Do not be afraid to engage with a professional to help you along the way!

#6 – Acknowledge coming change

Finally, you must be willing and able to prepare yourself for change. Be ready to handle the increased expenses that come with owning a homestead including expenses for animals, renovations, and changes to your lifestyle. You may need to hire a farmsitter if you leave town, for example, and you’ll need to ensure that you can afford these expenses without breaking your budget. You may have to spend more per trip to the grocery if you move out of town instead of shopping a little at a time weekly. Most of the changes in this category are just as much emotional as they are financial. Make sure you’ve factored in all of these additional expenses before committing to purchasing a homestead.

Owning a farm can be a great adventure, but it’s important to ensure that you’re financially and emotionally ready before making such a big commitment. Consider the key factors I’ve outlined here to determine if you’re ready to take the leap into farm ownership. And remember, owning a farm isn’t for everyone, so if you decide it’s not for you, that’s okay too! There are plenty of other ways to enjoy the benefits of farm life without taking on the full responsibilities of ownership.

So, are you ready to start your journey towards owning your dream homestead? With the right preparations, you can be well on your way to enjoying the benefits of this rewarding lifestyle. I would be honored to have the opportunity to walk along with you on your journey. Good luck, and happy homesteading!

That statement applies to so many areas of our lives. We wait for the perfect body to love ourselves in our skin. We wait for the perfect partner to love someone else fully. We try to wait until we have our **** together to address our finances.

Life isn’t perfect. Life evolves. Your money will evolve with you too.

You do not have to have the perfect budget! Start aligning your budget with your values today! I’ll let you in on a secret, those values are going to change with you as you grow. So, your budget will always be changing! And no one is going to know if you need a couple drafts to find what works for you.

You do not have to have a massive income! You can start working toward your goals where you are right now. Every contribution toward your future matters, even small ones.

You do not have to know everything! Or anything, really. Hiring someone who can help you uncover your values, learn how to manage your own finances, and help you set goals is ok. That is exactly what Financial Planners are here for!

Please don’t wait to be perfect. Start today working toward a more secure and confident life for yourself. 

When beginning a financial planning journey for the first time (or even starting anew with a different financial planner) one of the main things you should look for in who you work with is their financial planning process. This is one of the 3 P’s of hiring a financial planner I suggest you should never go without! While every person or couple is extremely unique in their needs and desires, the areas we cover together to develop their financial plan are always the same. These 7 areas we cover will be explored over the course of a year:

1. Financial Foundation
   1. The first area we cover when reviewing your financial plan is your financial foundation. This includes areas like your current spending and budget, any debt that needs to be addressed, children’s college education, and large purchases like cars or homes. There is a reason we call this area your Foundation. The decisions you make for these financial factors help shape the rest of your goals. It is so important to understand your current spending and how it relates to your short- and long-term goals. We’ll review all these areas together and make sure you are making the most of your income by aligning your budget with your personal values.
2. Insurance
   1. Second we will conduct an insurance review. Insurance recommendations vary, but usually include Term Life Insurance, Auto Insurance, Renters or Homeowners Insurance, Health Insurance, Long-Term Disability Insurance, Long-Term Care Insurance, Identity Theft Insurance, and an Umbrella Policy. We will review your coverage in these areas and any other areas that might be relevant to you. We will make sure you have the right amount of coverage (not too little, but also not too much! Just like Goldilocks) and also make sure the premiums you are paying are reasonable for the coverage you need. I do not sell insurance myself, so you are welcome to utilize the insurance provider of your choice. Because I do not sell insurance products, you can also trust that my recommendations for you aren’t influenced by commissions, pressures for quotas, or anything other than your needs.
3. Taxes
   1. Everyone’s favorite topic to hate! For our review of your taxes, we will take a look at your prior tax returns for any areas of improvement. We will also discuss the tax efficiency of your investment accounts, explore options for tax deferred accounts, and do our best to optimize your tax efficiency. I am not a licensed tax preparer, and all tax based recommendations should be reviewed with your preferred tax professional.
4. Investments
   1. In this topic, first we work on education. I will meet you where you are to teach you the basics about investing. It is extremely important to me that you understand all your investments in full. We start with an emphasis on understanding BEFORE investing. We will also evaluate your risk tolerance and discuss the types of investments that are right for you. You will have time to ask any and every question you’ve always wanted to ask before we move forward in investing your money. Once you feel confident about what you’ve learned, I will recommend investments specific to your needs and risk willingness, and we will implement those investments at your pace and comfort level.
5. Retirement
   1. This one is the big kahuna for most people. It is such a big question mark! Will I have enough money to make it? What does making it even mean? How early can I retire? And how much fun can I have when I get there? (and along the way too!) We will sit down together and discuss your dream retirement. What does retirement mean to you? Everyone answers this question differently. Some people have big travel dreams, some people just want to have more flexibility in their schedule doing work they love, others want to make a large purchase such as land to create a family legacy. No vision is wrong, and the possibilities are limitless. We will discuss what YOUR vision of perfect is, assign numbers to understand what it takes to accomplish your goal, adjust if necessary and make a plan together to achieve your goals.
6. Estate
   1. This section of your financial plan is critical. This is the area where you protect all of the hard work you are doing. Together we will discuss one of life’s least comfortable topics—What if something bad happens? While this subject is no fun to discuss, I think most people do agree it is important to protect the people we love in the event of our passing or injury. I will walk with you to help you develop your plan. While I am not an attorney and cannot draft your estate documents for you, I can help you think through your options in a low stress environment. We will explore what documents could be right for your situation for when you talk with an attorney, potential need for insurance or specific account titling, beneficiaries, and setting up your assets to minimize chaos and conflict in a stressful time for your family.
7. Legacy
   1. The last topic we cover together is the more fun side of your end of life planning – The legacy you will leave behind! After you’ve moved through your working years and enjoyed your retirement, the next big question is what do you want to leave behind? Some people want to ensure financial security for their children or grandchildren, some want to leave large charitable gifts to a cause they have supported in life. Even if you do not have lofty goals, leaving a legacy for your family of a tidy estate with no debt has a major positive impact. We will work together to make sure the legacy you want to leave behind is in place, so you can rest with peace of mind.

You’re probably thinking “Wow, that is a LOT to cover”, and you’d be right. The first time you work through a financial plan is a big commitment and takes quite a bit of thought and self-reflection. Just like anything else though, it does get easier with time. Our first year of working together follows a schedule to make sure we cover all these topics in depth together. Every year after that, we will review the plan you already have in place to see what still applies and edit what has changed. Some years will require more changes and edits than others, and your financial plan will grow and morph with you over time. It is my absolute pleasure to walk with all my clients on this journey. Learning what makes your story unique, hearing your special goals, and helping you work toward them is what makes my job worth doing.

Hiring a financial planner for the first time can be an extremely intimidating process. How can you know who to hire? Everyone you speak with is probably saying something different about what you should be looking for.

“Find someone at a firm name you recognize like Wells Fargo or Merrill Lynch” right after hearing “Definitely don’t hire someone at a big bank, they’ll rip you off”. Yeah, opposite advice, that’s super helpful.

“Find the cheapest person you can” hmmmm I wouldn’t buy the cheapest car available….that’s just inviting problems, could hiring an advisor work the same way? If I cheap out will I get a lemon? Do I want to risk having a lemon managing my entire retirement fund?! But then how do I know where to splurge when I’ve never had one before?

Or maybe you’ve even heard “Oh, you don’t need a financial planner. You can do that all on your own. The information is available online.” Well, that might be true, but if you’re like most people the information available online is either extremely confusing to you, or it starts to sound like the teacher from Charlie Brown after about 5 minutes. Can you say BORING?

So, how DO you go about finding the right financial planner for you?

The recipe for finding the right fit for a financial planner begins before you start interviewing candidates. (Interviewing? YEP! You are the boss, looking to hire someone to do work for you!) Start by thinking about what feels important to you in your ideal advisor. This could be different for everyone, and there are no wrong answers.

• Do you prefer someone who has an office you can visit, or are you more comfortable with online meetings?
• Is there a specific age of advisor you would prefer?
• Do you have specific needs your advisor should have expertise in, such as LGBTQ+, blended families, debt payoff, etc.?
• Do they prefer strawberry ice cream or rocky road? (These things can be important)

Remember, anything goes here. This is a list about what is important to YOU. This list shouldn’t be too long, but it should include the things that you feel are critical for your personal success in the relationship you will have with your financial planner. Use these criteria to begin your search and develop a list of 3-5 candidates to interview.

After determining the qualities you absolutely need in a planner, there are 3 main things you should look for when interviewing your candidates. I call them the 3P’s!

Process

You’ll Ask: What is your financial planning process?

Every financial planner you interview should have a clear, repeatable process they follow for all their clients. While your situation is special to only you and you should be receiving advice and recommendations based on your specific situation, the method the financial planner uses should be really close to the same for every client. They should have a specific method for discovering your needs, organizing what they learn about you, applying their expertise to your situation, and delivering their findings to you in an accessible manner.

Having a process in place shows you that the person you are hiring has experience, organization, and competency.

Price

You’ll ask: How much are your services?

This is where I want you to really pay attention to how they answer this question in the interview. The answer, ideally, will be clear, concise, and specific. You wouldn’t buy a shirt at a store if the tag said “It depends” and you only found out after leaving the store where it showed up on your credit card statement, and you shouldn’t buy financial advice that way either. The financial planner you are interviewing should have the ability to clearly state how much they charge for their services, how you will pay them, and when that payment will be due. Please read here to learn more about the ways financial professionals get paid.

Be very, very wary of people who say they will take you on as a client for “free”. This is their job, and it is highly unlikely you have found someone who is giving away their time out of the goodness of their hearts instead of spending it with their family or friends. Advisors who offer “free” financial planning often do so as a precursor to high commission products they would like to sell you, or the financial plan will be of low quality. If they aren’t willing to discuss their fees using specific terms that you can understand, it is best you move on to a different advisor who will.

It is also important to note what you will be receiving for the price you pay. Some financial planners go into more detail than others, some offer a financial plan that you must implement yourself or pay more for help with follow-up, some charge more for managing your investments in addition to the plan. All of these things are ok! Just make sure you know what you are getting for the price, because not all quotes will be apples to apples comparisons when you just look at the cost. Choose the best cost to value option that makes sense for your situation.

Personality

You’ll ask: anything, or nothing!

This, in my opinion, is the most important criterion for choosing your financial planner. Once you’ve selected who you are going to hire, this will ideally be a decades long professional relationship. Life is too short to work with people you don’t enjoy. I want my clients to see my name for a meeting on their schedule and smile! And I want the same for myself, when I see them pop up on my schedule.

It is important that whoever you hire speaks to you in a way that you are able to learn, grow, and understand. Your financial planner should be teaching you something new all the time. Maybe they’re teaching you something new about finance, introducing a new way for you to think about your goals, or maybe helping you and your partner have new conversations you’ve never had before. No matter what you are discussing, you will want to partner with a planner that teaches in a way you can relate to and comprehend. Make sure they are someone to which you feel you can ask questions. No question should make you feel stupid or embarrassed! It is their responsibility to meet you on your level and work with you until you understand your investments. If they are not willing to put in the work with you, move on to someone who will.

Sometimes it can also just be a matter of style. Just like every person you meet isn’t going to immediately be your best friend, every advisor you interview isn’t going to be an instant connection either. There is value to hiring someone you “click” with. You will be partnering with your financial planner in some of the absolute best and absolute worst times of your life. Money tends to be a significant factor in both of those areas. For a wedding or divorce, birth in the family or death, major promotions and career advances or layoffs, all of these things are emotionally charged and greatly impact your financial life as well. Make sure that the person you have selected as your financial planner will be able to help you navigate those major life situations in a way that helps you feel secure and confident in the steps you are taking.

So there you have it. Those are the 3 P’s of hiring a financial planner! If you cover just those three areas with any financial professional you interview, you will be able to make a confident hiring decision!

The world of financial advice is littered with puzzling industry jargon and conflicting information about what is “best”. How are you supposed to begin getting your financial life in order if the language used to talk about even hiring a financial advisor is confusing? To help you wade through the massive amount of information out there, you can reference this guide to help you with some of the more technical aspects for hiring a financial planner. Personality fit, price for advice, and many other factors can weigh in too, but for this article I’ll be sticking to the technical parts.

How do Financial Professionals Get Paid?

There is a LOT of confusing information about how financial professionals get paid. When you are selecting the right advisor for you, knowing how they will be compensated is critical. Being well informed about where your advisors interests are aligned (and if they are putting your interests first) can help you weigh the advice you are being given with open eyes. Let’s take a look at some of the most common ways financial professionals can be compensated for their time and expertise.

Fee for Advice
When a financial advisor charges a fee for advice, they are charging a specific, agreed in advance fee for the advice they are providing to you. This fee is not usually tied to the size of your investments, but it can vary based on the complexity of your individual situation. While you will have to pay for this type of service as a direct expense on your budget, it is a great way to help ensure that the advice you are being given is free of direct financial incentive for the planner.

Hourly
This is very similar to a fee for advice form of billing. The primary difference is that you will be charged based on the amount of time your advisor is working with you and on your plan. Most advisors who use hourly billing charge a minimum number of hours and prorate the fee to the nearest 15 minute increment.

Assets Under Management (AUM)
Under this billing method, an advisor charges a percentage of the value of your investment portfolio. This is typically an annual rate that is billed directly to your investment account quarterly. For example, if you have $100,000 invested with an advisor that has an AUM fee of 1%, you would be paying $1,000 annually. If this is billed quarterly, your investment account would be charged $250 once per quarter.

Commission
Commissions are when an Advisor receives a direct incentive for selling a product to a client. This is common in most insurance or annuity products, certain mutual funds, and individual transactions for non-AUM accounts. If you have not signed an agreement for fee for advice, hourly planning, or AUM, it is likely that your financial professional is earning their revenue through commissions paid to the advisor by a third party on the products they sell to you.

Salary
Some large financial firms hire financial advisors to work on their staff as a part of the service they provide to their clients. These advisors will likely be limited in the advice they can give. They often serve hundreds (potentially thousands) of clients, making the depth of their attention per client naturally limited. They are also limited to only giving advice on the accounts you hold with their employer.

So, now that you understand the most common ways financial professionals are paid, lets talk about some frequently used terms you might see financial advisors use to advertise their services.

The Difference in “Fee-Only” and “Fee-Based” Advice

Fee – Only
Fee only financial planners are paid directly by their clients for the work they do. They may be paid as a flat fee, hourly fee, or with AUM fees, but the compensation only comes directly from their clients. A Fee-only advisor will not receive commissions from selling specific products to their clients. This can help prevent bias on the part of the advisor to recommend specific products linked to higher paying commissions.

Fee- Based
Fee- Based financial advisors receive their compensation either from commission for selling products or directly from their clients. It is possible for a fee-based advisor to be compensated with a mix of commission from sales and fees directly from the client.

Other Widely Used Terms

Fiduciary
This word has become a real buzzword in the world of financial advice, and for a good reason. A financial planner that is a fiduciary means they have the obligation to put their clients best interests before their own. A great example I run into often is when an advisor has a client who is being charged via AUM fees who also wants to pay off their primary home. It is in the advisors financial interest to keep the money under AUM, for higher compensation to the advisor. Whether or not to pay of their home early could have MANY contributing factors in either direction for the client. A fiduciary advisor would not factor in their own compensation when helping the client make this decision.
Advisors who are not fiduciaries are not held to this standard of ethics. Non – fiduciary advisors are required to provide investment advice they believe to be reasonably suitable to the customer. Suitability leaves a lot of room for interpretation and does not necessarily mean the advice given has to be the best advice to the client.
I find it easiest to think of it this way: One scoop of ice-cream is a suitable dessert. One scoop of ice-cream atop a molten lava cake with a generous drizzle of warm caramel sauce? Now THAT’s considered in my best interest. Maybe you prefer fruit? Everyone’s needs are different.

CFP ®, CFA ®, CDFA ®, QRXYZLMNOP???
Industry designations can be really confusing at best and misleading at worst. Just because a financial planner has some fancy looking alphabet soup behind their name does not necessarily mean they have a good background or education in financial planning. Make sure to do your research on what those letters represent. The planner you are investigating may have a designation that suits you very well! Or their designations could be relatively meaningless. There are dozens of designations that financial advisors can use, but only a few are certified by an independent third party agency. A list of Accredited Designations can be found here:
https://www.finra.org/investors/professional-designations/accredited-designations
Since there are so many certifications, I couldn’t possibly cover them all in one article. In general, for a place to start, the designation for a CERTIFIED FINANCIAL PLANNER, or CFP®, is widely recognized as a respectable, rigorous program for Financial Planners who provide comprehensive, personal financial advice.

How do you fall into those categories?

I am a Fee – Only Fiduciary Financial Planner. My compensation only comes directly from the clients I serve. I do not sell insurance products or annuities, and I do not receive commissions from any of the products I recommend. I hold CFP® and CRC ® designations, which are both accredited as per the link above. I offer Fee for Advice and AUM for my current clients. I also offer hourly services, but I highly recommend and believe most people benefit from a comprehensive financial plan.

If you believe that my services would meet your current needs, I would love the chance to speak with you. Please schedule a complimentary 30 minute consultation so that we can determine if we would like to work together. I look forward to seeing you soon!