Financial Planning

Small-Business Success Story: No-Strings Financial Advice

This financial planner charges by the hour and gives investors tools to better manage their money.

Kiplinger's spoke with Lori Atwood, a Washington, D.C.-based financial planner and creator of the Fearlessfinance program and app, about what led her to entrepreneurship after several years out of the workforce. Here's an excerpt from our interview:

How did you become a financial planner? I worked in the financial industry until the spring of 2008. I did my last deal just before the financial crisis. After that, I stayed home with my baby daughter, Stella. When she was ready for preschool in 2011, I thought, What should I do next? I tried to develop a parenting website, but I realized that finance was all I knew how to do. So I called everyone I knew and asked if I could give a seminar on personal finance and budgeting. Attendees asked me, “Do you take clients?” I said yes. In 2015, I became a certified financial planner.

What’s the top reason your clients come to you? Financial pain. I help people who make a decent living -- sometimes as much as $500,000 a year -- but can’t make it work and don’t know why. Their issues seldom lie with their investments. It usually comes down to one thing: living beyond their means.

What’s your advice? First, whether you make $60,000 or $600,000, you must spend less than you earn. Then you need to have a rainy-day fund for unexpected expenses, such as a root canal or new brakes. Without that, paying down credit cards makes no sense because you’ll get right back on the credit card train. Next, do you have an emergency fund in case of a total loss of income -- say, because of divorce, a layoff, or medical or mental disability?

Also, are you saving enough for retirement? After you’ve taken care of those things, do you pay off your credit cards every month? Then we can discuss goals such as buying a new car or beach house, renovating your home, changing jobs, or retiring early.

How do you charge? Unlike many advisers, I don’t require an up-front payment of several thousand dollars, nor a minimum amount of assets under management. I charge $185 an hour, although that may increase if I take on an associate. I want to give people solid advice they can turn on or off when they need it. That’s what the planning industry is missing. And because of that, there’s a huge, underserved community.

And you’re trying to spread your message? I found that I was saying the same things over and over to clients. I thought, Why can’t a lot of this be automated? I had a bunch of proprietary templates in Excel, and I worked with a developer to create my Fearless Finance program and app. You can get the summary report, app and access to the online transactions dashboard for $6.99 per month.

How do the program and app work? With the program, you input your financial data, and it gives you a summary report that includes specific recommendations on a wide range of things, such as creating a rainy-day fund and saving for college and retirement. With the app, you enter your data or link to your accounts to track spending on groceries and discretionary items -- although you can add more categories. You set a monthly target, and you’ll see how much you’ve spent and how much you have left for the month. You’d be shocked at how much people overspend on food—groceries, take-out and eating out.

What’s next? We’re coming out this fall with an edition of Fearless Finance for retirees. For example, retirees generally don’t have minor children at home, and their life insurance needs are different because they generally have no earned income to replace.

Most Popular

Thinking of Buying an RV or Motor Home? Think Again!
personal finance

Thinking of Buying an RV or Motor Home? Think Again!

A Lemon Law attorney has some insights on the downsides of RV ownership you should think about before putting your money down and hitting the road.
May 16, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 17, 2021
Refunds for $10,200 Unemployment Tax Break to Begin This Week
Coronavirus and Your Money

Refunds for $10,200 Unemployment Tax Break to Begin This Week

The IRS will start issuing automatic refunds in mid-May to people eligible for the unemployment benefit tax exemption.
May 14, 2021

Recommended

Estate-Planning Your Stuff with T. Eric Reich
Empty Nesters

Estate-Planning Your Stuff with T. Eric Reich

What to do with the house, the vacation house and the china? We talk with a financial adviser who's got some wise counsel. Also, who makes up the so-c…
May 2, 2021
What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
37 Ways to Earn Extra Cash in 2021
business

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021
6 Money-Smart Ways to Spend Your Third Stimulus Check
Coronavirus and Your Money

6 Money-Smart Ways to Spend Your Third Stimulus Check

If you don't have to use your third stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
March 20, 2021