How much would you have to have to pay an FA

[youbet]

OK - so let say you don't need to worry about it until you reach $100M.

We have the answer folks: It's at least $100M!

+1

Yep, the amount seems to keep growing as the discussion goes on!

I tend to agree with you on this Audrey, no need for a FA since I plan to continue to simplify as I go on (actually pretty simple now outside of the few percent in my "day at the track" portfolio).

OTOH, I think I may be switching from DIY to a CPA for taxes and believe an estate planning attorney and an elder law attorney would be worthwhile.

 

[youbet]

+1

I would say $100MM for sure, but even at much lower levels like $12-15MM, it's costing you only a tiny fraction of your yearly passive income to outsource all the obscurities of estate planning, tax optimization, and other complex issues that you probably don't want to become an expert in yourself just to save a few bucks. At $12MM, for example, your monthly passive income would be roughly $35,000. Retaining a fee-only FA for a quarterly review of your portfolio would cost only about $3,000 (assuming $100/hr for 8 hours, 4 times per year). It's hard for me to comprehend how anyone would think, at that level of net worth, this wouldn't be a wise use of money. At that level of wealth, I would certainly want at least an annual "checkup" on my portfolio by a trained professional, just like I go in to see my doctor once a year for a complete physical exam.

Generally, a fee only FA is not also a top notch estate planning and tax pro.

 

[marko]

Generally, a fee only FA is not also a top notch estate planning and tax pro.

No. But the company she/he works for has those people available for you.

Like these guys: https://www.welchforbes.com/ for example

 

[Sojourner]

Generally, a fee only FA is not also a top notch estate planning and tax pro.

Agreed, but a top notch fee-only FA would at least be able to identify possible issues in my portfolio that I might be overlooking or just be blissfully unaware of. Then they could tell me I need to consult with an estate planning specialist or tax pro. Just like the highly trained physician I see every year for my physical exam isn't a top notch endocrinologist, but he certainly could identify potential issues such as hypothyroidism and then refer me to someone for treatment.

Anecdotally, the fee-only FA I consulted several years ago asked me lots of questions about my goals (long term and short) and tax situation so that he could tailor his advice accordingly. It wasn't exactly estate planning, but I'm certain he did take my general thoughts about my future estate and potential tax scenarios into account. I wouldn't hesitate to go back to him for more detailed advice if my situation and/or goals were to change dramatically.

 

[Milton]

Warren Buffet himself certainly doesn't restrict his portfolio to Vanguard funds. I think he intended his advice for the average person, not the UHNW crowd.

Don't think so: his recommendation that his non-Berkshire estate - which presumably is decently large - should be invested for his wife's benefit in Vanguard funds was pretty explicit. But I do acknowledge that while he remains alive, he doesn't practice what he preaches.

 

[audreyh1]

Go back and look at post #13.... I said that a LONG time ago

 

[audreyh1]

+1
OTOH, I think I may be switching from DIY to a CPA for taxes and believe an estate planning attorney and an elder law attorney would be worthwhile.

I plan to switch to those services as I get older anyway - because I don't intend to do them myself anymore once I reach a certain age, regardless of the size of my portfolio.

 

[Fedup]

Don't think so: his recommendation that his non-Berkshire estate - which presumably is decently large - should be invested for his wife's benefit in Vanguard funds was pretty explicit. But I do acknowledge that while he remains alive, he doesn't practice what he preaches.

You can't take everything Warren Buffet said literally. Judging by what he says and what he does with his money and investments.

 

[Scuba]

Don't think so: his recommendation that his non-Berkshire estate - which presumably is decently large - should be invested for his wife's benefit in Vanguard funds was pretty explicit. But I do acknowledge that while he remains alive, he doesn't practice what he preaches.

Yes - for his wife, but his portfolio is not invested in index funds. That was my point.

 

[traineeinvestor]

If you stick to broadly diversified low-cost mutual funds, rebalance only occasionally to maintain your AA, and don't use margin, it's really hard to see where the big screw ups are going to happen.....

Keep it simple.

Agree, but my portfolio looks very different from that - mostly directly held real estate and individual stocks (partly a legacy of ultra low cost funds not being available out here in the wild, wild East) + I do use a small amount of margin.

More to the point, I have seen too many wealthy people go broke through one reason or another not to believe that screw ups happen to the best of people.

 

[Koolau]

+1

Yep, the amount seems to keep growing as the discussion goes on!

I tend to agree with you on this Audrey, no need for a FA since I plan to continue to simplify as I go on (actually pretty simple now outside of the few percent in my "day at the track" portfolio).

OTOH, I think I may be switching from DIY to a CPA for taxes and believe an estate planning attorney and an elder law attorney would be worthwhile.

I agree completely on the CPA or at least what I call a Tax Guy or a Tax Gal. Taxes are a very technical issue with plenty of gotchas to watch for. I've never wanted to tackle taxes myself. I'll gladly pay an expert to do the work. FA on the other hand, I see less and less need for one as I become more conservative in my investing. If I leave some money on the table, I'm very comfortable with that. The only times I've gotten in trouble (think tax issues) was when I followed the advice of an FA. So far, the tax issues I've had with a CPA have been pretty much minimal (last time, CPA told us to pay a penalty that the IRS promptly returned to us, saying we didn't owe it!) Once in a while things go my way when it comes to taxes. YMMV