Tweet
Vanguard 3 fund portfolio or even target fund. Much easier than fixing my car.
You have to do work and learn to figure that out. It took the person who came up with it until he was in his 80's after a lifetime thinking about it.
-
You have to do work and learn to figure that out. It took the person who came up with it until he was in his 80's after a lifetime thinking about it. -
While I don’t doubt they would post less, it’s a real stretch to say I don’t get it.
I don’t like taking out the trash but I still do it. If someone wants to pay someone else to do anything….taking out trash…investing….whatever then they have that right but let’s not pretend there is a high chance that these situations are optimal and going to work out. Fee only advisors are less common and for the most part that fee doesn’t include unlimited calls about how nervous they are and getting them to stay the course. These people will decide they aren’t getting enough attention or get unhappy with the high hourly charge for “doing nothing “ and find the “usual” advisor. Have you ever noticed some of the happiest people with their advisor are getting soaked the most?
You don’t wish to educate that person (not that you should). You want someone take it off your hands. I don’t like investing topics. I learned them and it isn’t beyond the reach of most people. You have decided it’s better that they get pushed to a fee advisor or an AUM advisor. I’m not sure that’s true. The evidence seems very thin that the costs will change destructive financial behavior.
Now that's not fair to say I don't wish to educate that person. I've dedicated a good portion of the last decade to doing just that. But I can also tell when it isn't working and isn't going to work.
I fully agree with you that docs CAN learn to do this. But that is far different from saying docs WILL learn to do this. I'm acknowledging that there is an intermediate path between doing it well yourself and not doing it/doing it poorly yourself. That is paying someone to help you do it well.Helping those who wear the white coat get a fair shake on Wall Street since 2011Comment
-
Fee only advisors are less common and for the most part that fee doesn’t include unlimited calls about how nervous they are and getting them to stay the course.
I've yet to meet a fee-only advisor who, unless they charge by the hour, charges extra for phone calls (or even keeps count of them).
Have you ever noticed some of the happiest people with their advisor are getting soaked the most?
Purely anecdotal and I just don't believe it. If that were so, we wouldn't have the current sea change that is going on in the financial advisory industry. Maybe 10 or 20 years ago, but not now.Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087Comment
-
Until you’ve really worked with a financial planner (a real financial planner), it is practically impossible to imagine what goes into the relationship.
This is why I haven't gone with a real financial planner either. 3k seems like a lot. In the grand scheme of things, not so much, but mentally, I'm stuck committing to it. Mentally a planner could probably save that at some point, but year over year? Do I really need do to do that? I've freed myself of the AUM planner shenanigans.
Johanna, others - I've bought in to the idea, and tell others to do it, but I can't seem to call you and commit. Not sure if others are stuck there, but I am.
... I'm somewhere on the continuum. Clearly Jim is mentioning a significant cadre of folks who feel stuck and can't/won't get on a better track for retirement.Comment
-
Rex, I think you overestimate the financial acumen of the average Joe or even the average doc. 34% of Americans have no savings at all. 69% have less than $1,000 in savings. These people don't know what Vanguard is, let alone a Boglehead. They can't jump into the Boglehead wiki to figure out that a three fund portfolio is what they should be doing. They don't understand diversification. They don't understand simple or compound interest.
70% of Americans can't answer these three questions correctly:
Question 1
Suppose you have $100 in a savings account and the interest rate was two percent per year. After five years, how much do you think you would have in the account if you left the money to grow?
A. More than $102
B. Exactly $102
C. Less than $102
D. I don't know
Question 2
Imagine that the interest rate on your savings account was one percent per year and inflation was two percent per year. After one year, how much would you be able to buy with the money in this account?
A. More than today
B. Exactly the same as today
C. Less than today
D. I don't know
Question 3
Do you think the following statement is true or false: Buying a single company stock usually provides a safer return than a stock mutual fund.
Rogue Dad had a post on here where he did a survey indicating the poor financial knowledge of docs. Docs are are likely smarter than the average Joe, but still struggle in this area.
In short, WCI has provided a lot of useful educational info on here for people wanting a DIY solution, but referring people to reputable, fee-only fiduciaries is useful too.Comment
-
As an admin for a group of close to 10K women docs interested in personal finance, I can tell you that most do want a good and fair FA. Not everyone has the time or interest to learn. This is a select group that posts here.
Many of my members don't even know what an index fund, target seems easy but it is not to a true beginner. And frankly, many of them could care less to learn and really manage money and truly plan for their futures.
FWIW, I have an FA. I partially did it for curiosity since none of the other finance bloggers ever really used one. Also was recently coupled up and although I felt comfortable handling my finances, things were more complicated with him (blended family etc) and wanted an expert by my side. As an older new attg I also couldn't afford to make any large mistakes (already made too many!).
People pay large sums of money for personal trainers, life coaches, maids, etc - just depends if you want help in these areas. an FA is much less the first two for sure.Comment
-
All you have to do is spend some time over at bogleheads to know its very possible to teach almost everyone. EVERY day there is someone on there with minimal education who posts a thread.
The responses go like this (im simplifying of course).
Welcome
Tell them its not that hard
Tell them to Save
Invest in 3 fund or target until you feel comfortable or just save for a few months at first
Ask questions
If you hang out there long enough you will realize anyone can do it. Now if someone doesnt want to do it and they want to pay someone else to do it,I have no problem with that (which ive actually mentioned above and before). Everyone here pays someone to do something cut grass whatever that they could do.
I'm beginning to think this is some kind of troll. You think the people posting on Bogleheads are in any way representative of "everyone"? Obviously Boglehead posters are interested in learning about the questions they ask and are taking the time to engage a knowledgeable group of people to learn. I agree the basic concepts are not that complex and that most people could learn them. But many don't have the time or the inclination. I know many, many people who would never make it to the Bogleheads wiki/forum, let alone start posting questions on it.Comment
-
Again-paying high fees for just investing doesn't make much sense to me either. You can do just fine with a little education and perhaps a robo advisor. The only aspect of investing that might benefit from having an advisor is if you cannot adhere to some basic tenets of long term success:
1) try to avoid single stocks and their risk unless you are confident you know more than professionals
2) stay diversifed at low cost
3) avoid buying from greed
4) avoid selling from fear
What is worth paying for is experience and wisdom-in almost every field. Do you want a brand new attorney fresh out of school or someone who has been working hard for twenty years? Same for an internist most of the time. Knowledge and wisdom comes in on many decisions:
What kind of disability insurance. How much, which riders?
Ditto on life insurance.
How best to save for educational costs (529, pay kids to fund Roth IRAs, etc)?
How best to title assets to offer asset protection?
How to get the best retirement plan design. When to add a defined benefit plan?
Does that new office make financial sense?
Does a second home make financial sense?
Are you on track for an adequate retirement?
on and on. That's what you should be paying an advisor for. I'd argue that almost no one practicing medicine has the time to figure all this out by themselves.Comment
-
Until you’ve really worked with a financial planner (a real financial planner), it is practically impossible to imagine what goes into the relationship. I know that only because our clients say so
I worked with a real financial planner, and he put so little effort into the relationship it helped spur me stop using him. Interestingly enough, this gentleman is no longer associated with that firm, though the firm does have his last name.
His paraplanners did put a lot of effort into the relationship.An alt-brown look at medicine, money, faith, & family
www.RogueDadMD.comComment
-
Rogue Dad had a post on here where he did a survey indicating the poor financial knowledge of docs. Docs are are likely smarter than the average Joe, but still struggle in this area.
http://www.roguedadmd.com/2017/06/personal-finance-study-written-up-by-wci/
https://www.whitecoatinvestor.com/academic-paper-about-resident-financial-illiteracy/
If anyone is interested, here's the WCI post and my complementary post on the same topic.An alt-brown look at medicine, money, faith, & family
www.RogueDadMD.comComment
-
Until you’ve really worked with a financial planner (a real financial planner), it is practically impossible to imagine what goes into the relationship. I know that only because our clients say so
I worked with a real financial planner, and he put so little effort into the relationship it helped spur me stop using him. Interestingly enough, this gentleman is no longer associated with that firm, though the firm does have his last name.
His paraplanners did put a lot of effort into the relationship.
Sorry, but you didn't work with a "real" financial planner or he would have done "real" financial planning.It's an important distinction. He might have been a "real" licensed CFP, but he never learned what financial planning was all about or he was too lazy or disinterested to engage. Most CFPs don't do financial planning, it just takes too much time, knowledge and experience. They hide behind software and their licenses.Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087Comment
-
Here's a scenario I saw years ago I thought was a great way for clients to understand what their advisory fees get them.
- Ask the advisor to explain what he/she will do for you if they manage $200,000 of your money and be sure they include what fee they will charge.
- After you get a detailed explanation, ask what they will do if you roll your $800,000 401k balance over to them when you retire.
- Odds are you are increasing their fee five-fold. You need to understand if and how they are increasing the service provided to you five-fold.
- Then it is up to you to decide if the advisor and their fee are worth it.
Comment
-
All you have to do is spend some time over at bogleheads to know its very possible to teach almost everyone.
Of course it's possible to teach almost anyone, IF they aren't frightened by all things financial. I think this is the point you are missing: a lot of people (even highly intelligent people) are just plain scared of all things having to do with managing money and investing.Comment
-
No pretty much everyone now a days is on the internet. Even grandma does facebook. Its actually amazing to see the amount people have done for themselves just from youtube videos alone. So yes pretty much everyone can search this out. its not a complicated search.
So what? I know there are a lot of home repair how-to videos on Youtube, and if I watched them I could learn to do all kinds of complicated things and save a ton of money in the process. But I am afraid of power tools, and I'm afraid of making a mess of things (not to mention injuring myself) if I attempt big home repair projects. Guess what that means? It means I'll never bother to go watch any of those videos that will teach me just how easy do-it-yourself home repair is. The fear quashes any desire to learn.
People who are afraid of financial matters don't generally WANT to deal with (to them) scary money issues. They're not going to do research on YouTube or hang out on the Bogleheads forums. They're much more comfortable letting an advisor handle things. (Which is fine if they can manage to find a good one. The problem, of course, is that most don't.)Comment
-
Sorry, but you didn’t work a “real” financial planner or he would have done “real” financial planning.It’s an important distinction. He might have been a “real” licensed CFP, but he never learned what financial planning was all about or he was too lazy or disinterested to engage. Most CFPs don’t do financial planning, it just takes too much time, knowledge and experience. They hide behind software and their licenses
Well at last check this was the one of the biggest physician financial advisory firm in the country, and the company itself has stoked several controversies on WCI.
I would say the firm is quite real, but I ended up with an advisor who was a bad match. The more we worked together the less effort he put in, though what led to that I cannot say with certainty. I could speculate, but no need for that here.
An alt-brown look at medicine, money, faith, & family
www.RogueDadMD.comComment
Comment