I know I'm going to get ripped for this but....

[walkinwood]

Like others have mentioned, I used Vanguard.

I just wanted to be sure that I wasn't seeing an extra zero and thinking I was all set. Luckily, that wasn't the case.

 

[travelover]

Like others have mentioned, I used Vanguard.

I just wanted to be sure that I wasn't seeing an extra zero and thinking I was all set. Luckily, that wasn't the case.

I did something similar at Fidelity - a little hand holding.

Still no birthday card.

 

[Terryjm51]

Haha. I did the same thing ran all the numbers figured out what sites to use. Came up with a credible scenario that appears to work fine.
However I don't do this for living is what I told myself and still insecure with my math had a fp run the numbers $1500 bucks and I gave them my excel sheet!
I was on track, what a dummy
I do do this for living, budget our house hold and have put a huge nest egg together like so many in this forum.
This forum cost zero and you get better advise
My two cents. I don't trust any of them.




Sent from my iPhone using Early Retirement Forum

 

[Rick_Head]

It depends on what you want. No one can accurately predict the future. FireCalc does a good job of telling you what would have happened in the past. Things like the Trinity Study are also guidelines you can use.

What I would want from a fee-only (ie. hourly) FA is advice on taxes, estate planning and a few other things I probably haven't thought of (those last are the most valuable) that are predictable provided the rules don't change. It's also not their fault if the rules do change.

The price I'd be willing to pay would depend on what I asked for, what I thought a reasonable number of hours to do it would be, and how much I'd be willing to pay per hour. I'd also compare that to the cost of getting similar advice from someone else (say a tax lawyer/accountant, estate lawyer or whatever).

No one can guarantee you you won't run out of money. No one can guarantee you you won't die filthy rich. That part is up to you.

If you live North of 49 as I do, the odds of finding such an advisor approach 0. Therefore you may well be on your own (no matter where you live).

 

[phil70]

Maybe I am under the wrong impression, I thought the hourly fee only financial advisor was someone that I could hire for a few hours of work. Not someone I wanted to hire to run my accounts. Are you saying that none of the FA's give 1 time advice?

The adviser I spoke with, part of the Garrett Planning Network, did exactly that: one time consulting gig with a fixed fee.

 

[2B]

Maybe I am under the wrong impression, I thought the hourly fee only financial advisor was someone that I could hire for a few hours of work. Not someone I wanted to hire to run my accounts. Are you saying that none of the FA's give 1 time advice?

What I meant is that people that manage their own assets would be the most likely to search out a fee only planner as a way to validate their plan and the OP intends. Why would a fee only planner be surprised that someone comes to them that is managing their own assets. I can also see someone double checking their % of assets FA.

 

[target2019]

What I meant is that people that manage their own assets would be the most likely to search out a fee only planner as a way to validate their plan and the OP intends. Why would a fee only planner be surprised that someone comes to them that is managing their own assets. I can also see someone double checking their % of assets FA.

The "fee only" terminology has different usage, depending on the group your with.

In this forum and elsewhere most think of "fee only" as meaning a fixed, one-time fee that you pay for an evaluation of a plan, or construction of a plan.

Advisors also refer to their service as "fee only" (see NAPFA) since they are only charging a fee, and not a commission on sales. I was corrected earlier, rightly so, in that most NAPFA advisors want a percentage of your assets until your relationship ends.

I don't think there is a standard definition of "fee only" in the financial industry. Maybe I am wrong.

 

[2B]

The "fee only" terminology has different usage, depending on the group your with.

In this forum and elsewhere most think of "fee only" as meaning a fixed, one-time fee that you pay for an evaluation of a plan, or construction of a plan.

Advisors also refer to their service as "fee only" (see NAPFA) since they are only charging a fee, and not a commission on sales. I was corrected earlier, rightly so, in that most NAPFA advisors want a percentage of your assets until your relationship ends.

I don't think there is a standard definition of "fee only" in the financial industry. Maybe I am wrong.

I agree with your definitions. Another popular term for FAs that take a percentage of assets is "wrap account." I tend not to use that here because people new to the DIY concept frequently don't understand that their friendly FA is sucking a couple percent of their assets every year to put them in high cost funds.

 

[haha]

I don't see why we should take it upon ourselves to convince people to save money. It is clear enough that simple DIY asset management is a foundational belief among most of our members. If someone wants to waste money, how is that our business? There may be ways to improve on the Boglehead plan, but giving an FA a big chunk of dough annually is very unlikely to be one of those ways That should be clear enough. It may be that what is mainly being accomplished by these expenditures is marriage preservation. Just like executives may hire consultants, not to learn something, but to offload blame. Even a one time only $2-$3000 seems misguided. Did God tell the FA what is going to happen? If not, how can he have better ideas than all the many calculators and guesstimates to be found all over the web? What to expect, particularly over the long periods that many ERs will be facing is completely unknowable. I think what is knowable tends to be ignored anyway. For example we know that the Shiller CAPE is very high, in territory that has not yet gone on for long without being brought down. How many of us are using that to decrease exposure dramatically?

We don't campaign against motorcycle riding, though statistically it is not a great idea.

Also, have you ever seen a more hard headed group? IMO we should respect what someone makes clear, not believe it for ourselves, but let them be with it.

Ha

 

[phil70]

I agree with your definitions. Another popular term for FAs that take a percentage of assets is "wrap account." I tend not to use that here because people new to the DIY concept frequently don't understand that their friendly FA is sucking a couple percent of their assets every year to put them in high cost funds.

The specific reference to hourly fees is becoming more common, and his helpful to differentiate from the typical RIA model where they charge the recurring fee on assets under management.

The one time consult we got was helpful. In theory, a "simple" boglehead allocation should not require a professional's input. However, I prefer an asset allocation with exposure to more asset classes. Larry Swedroe recommends asset classes including small value, developing markets etc. My wife and I both work, which means we have two different 401k plans with different fund options. If you want to get exposure to 8 or more asset classes across two plans, you can wind up looking over 15 fund products. I essentially outsourced the hours of work it would have taken to do that type of analysis. Now that we have the baseline, it will be easy for me to keep track of going forward.

 

[phil70]

I don't see why we should take it upon ourselves to convince people to save money. It is clear enough that simple DIY asset management is a foundational belief among most of our members. If someone wants to waste money, how is that our business? There may be ways to improve on the Boglehead plan, but giving an FA a big chunk of dough annually is very unlikely to be one of those ways That should be clear enough. It may be that what is mainly being accomplished by these expenditures is marriage preservation. Just like executives may hire consultants, not to learn something, but to offload blame. Even a one time only $2-$3000 seems misguided. Did God tell the FA what is going to happen? If not, how can he have better ideas than all the many calculators and guesstimates to be found all over the web? What to expect, particularly over the long periods that many ERs will be facing is completely unknowable. I think what is knowable tends to be ignored anyway. For example we know that the Shiller CAPE is very high, in territory that has not yet gone long without being brought down. How many of us are using that to decrease exposure dramatically?

We don't campaign against motorcycle riding, though statistically it is not a great idea.

Also, have you ever seen a more hard headed group? IMO we should respect what someone makes clear, not believe it for ourselves, but let them be with it.

Ha

I think that forum members should reserve judgment on people who pay the recurring asset management fee. If you have no head for finance and no time or inclination to manage your portfolio, a good FA can be better than no FA, even if after deducting a reasonable fee. Of course there are bad apples in the industry. Just like there are bad lawyers, doctors and cops, teachers, etc.

If you are lucky enough to have the time, skill and confidence to manage your own portfolio, kudos to you, but don't knock someone else who doesn't.

This site is a good resource for people looking to go DIY, and they'll be more likely to continue that journey if they are greeted with constructive advice and not condescension.

 

[nuke_diver]

I think that forum members should reserve judgment on people who pay the recurring asset management fee. If you have no head for finance and no time or inclination to manage your portfolio, a good FA can be better than no FA, even if after deducting a reasonable fee. Of course there are bad apples in the industry. Just like there are bad lawyers, doctors and cops, teachers, etc.

If you are lucky enough to have the time, skill and confidence to manage your own portfolio, kudos to you, but don't knock someone else who doesn't.

This site is a good resource for people looking to go DIY, and they'll be more likely to continue that journey if they are greeted with constructive advice and not condescension.

+1000

As you say Phil if someone does not have the head or the time for it DIY could be far worse that having a FA. Just because others find it easy doesn't mean everyone does. There are a lot of people who can't fix things around the house/car or call a repairman for a computer issue. It doesn't make handyman/auto mechanics or computer technicians evil and money stealers. Why would a good FA be different then those people (and yes I am sure there are ones that do steal and take advantage of folks both handyman and FA's )

 

[travelover]

+1000

As you say Phil if someone does not have the head or the time for it DIY could be far worse that having a FA. Just because others find it easy doesn't mean everyone does. There are a lot of people who can't fix things around the house/car or call a repairman for a computer issue. It doesn't make handyman/auto mechanics or computer technicians evil and money stealers. Why would a good FA be different then those people (and yes I am sure there are ones that do steal and take advantage of folks both handyman and FA's )

I think it is an important service to educate others about alternatives and let them make their own decisions. The FA industry makes a full time living sowing self doubt about investing and I'd like to think I (we) present a rational alternative - just as I'd advise anyone that they can change their own light bulbs as opposed to hiring an electrician.

 

[Live And Learn]

Thanks. Yeah, I need to decide but getting someone to check my numbers is part of my decision process.

I wanted the same "professional opinion". I had my broker do it for me using their software. It was a free service. It came back with a 79% chance of success, compared to Fidelity RIP (95% chance of a 33 year retirement) and Firecalc (100% success with room to spare) and ******** (100% success but just barely). The analyst said I was good to go even tho I was appauled at the low success rate but he explained (a) I'm too young - their retirement calculator gets more conservative for very long retirements and (b) they want us to keep saving and investing - not divest !

At some point we just need to decide if we can sleep at night. When I decided to go OMY (actually two more years !) I set up minimum "goals" that I knew would make me feel more confident. The goal was to be a 3% WR using 90% of my portfolio. Having met those goals I feel good about ER next month.

Do you have any minimum criteria that you can use that you know will make you confident enough once reached ?

 

[phil70]

I think it is an important service to educate others about alternatives and let them make their own decisions. The FA industry makes a full time living sowing self doubt about investing and I'd like to think I (we) present a rational alternative - just as I'd advise anyone that they can change their own light bulbs as opposed to hiring an electrician.

Fair point, but is making decisions concerning your financial future and your ability to live out the "FIRE" dream the equivalent of changing light bulbs or rewiring the house?

I'm all for DIY. I'm basically a DIYer myself. I'm just saying that it is rational to outsource these decisions to a professional. I agree that the forum provides a service by pointing out the costs/risks of using an FA, but it is not a completely binary decision at the end of the day.

A lot of DIYers mock people paying for advice on this site, but if you are a DIYer and your solution is a 60/40 allocation the Vanguard "all US equities" fund and the "All Bonds" fund, you could be just as well taken to task for being grossly underexposed to important asset classes, etc.

The decision to pay an advisor is important. But so are other decisions that people discuss on this site without being ridiculed.

 

[haha]

I think that forum members should reserve judgment on people who pay the recurring asset management fee. If you have no head for finance and no time or inclination to manage your portfolio, a good FA can be better than no FA, even if after deducting a reasonable fee. Of course there are bad apples in the industry. Just like there are bad lawyers, doctors and cops, teachers, etc.

If you are lucky enough to have the time, skill and confidence to manage your own portfolio, kudos to you, but don't knock someone else who doesn't.

This site is a good resource for people looking to go DIY, and they'll be more likely to continue that journey if they are greeted with constructive advice and not condescension.

I think I did a bad job of trying to make my point.

Clearly some special problem, especially a political problem, is worth spending money to avoid or solve. Same with unusual titling or other things like insurance or estate plans or other things that a FA may of may not be competent to help with.

But the plain Jane aspects of how much money do you put into what seems to be to be greatly in doubt, so some random choice within the usual bounds encountered everywhere is as likely to be successful as any other, whether one's own choice or some FA's.What people mostly seem to do is pick out some favorite guru, and make his pronouncements a benchmark.

Anyway, I am saying let people do whatever they are committed to doing, and let it be. Frankly, it is tiring and unnecessary to discuss this over and over since we seem to agree that no one really knows what will be best.

Ha

 

[bulbar]

Thanks for all the comments. Someone on here posted a link to the Garrett network. I found a guy who is running his model for me for about $400. He apparantly does this frequently for people in my shoes. I'll see how it looks.

 

[travelover]

Fair point, but is making decisions concerning your financial future and your ability to live out the "FIRE" dream the equivalent of changing light bulbs or rewiring the house? .....

I guess I was unclear. My point is that unless one knows that a task may well be within their capability, their first instinct is to close their eyes and reach for their wallet. This forum consistently provides the insight that investing is not that hard.

I think that many more people can handle their own finances than currently do. I also think many of those paying a FA have no idea how much they are paying because of the way the payment is spirited away a little at a time in a more or less opaque manner.

That said, if you want to pay a FA, go for it. But I'll continue to educate those that may not realize that they may well be able to do it themselves, and if not, how much it is really costing them.

 

[2B]

I think that many more people can handle their own finances than currently do. I also think many of those paying a FA have no idea how much they are paying because of the way the payment is spirited away a little at a time in a more or less opaque manner.

+1

There's also a certain amount of ego involved. My FIL always talked about having his CPA handle his taxes ($600/yr) and his FA who put him into variable annuities. When I took over doing his taxes, he didn't even itemize deductions. He was paying $600 for a 1040EZ!

 

[travelover]

......... He was paying $600 for a 1040EZ!

Well yea, but that $600 was tax deductible ............ but not on a 1040EZ