Announcement

Collapse
No announcement yet.

New grad - Is it worth getting a financial advisor? (Fee only or AUM?)

Collapse
X
Collapse
First Prev Next Last
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • #31




    Asset allocation.  Choosing the right investments.  Once I own my own practice I will be spending most of my time running that and don’t want to spend extra work and time researching the best investments.
    Click to expand...


    If that's all you want, then just do what jacovalu says:

     




    Asset allocation. Age in bond or age minus 10 or 20 in bonds. Depends on your risk tolerance. The remainder in equities, with 30-40% of that international. Three funds. Use Vanguard. That’s it.
    Click to expand...


    That will almost certainly outperform anything an advisor will put you in especially after fees are taken into account.  That's literally all there is to it.  That's why everyone is telling you to do it yourself.

    As far as the "I don't want to spend all my time researching the best investments" is concerned.  How long do you think all the do it yourselfers on here spend doing that?  If it's not clear yet, the answer is roughly zero time. (I'm not referring to real estate investments or other non-stock/bond investments here, but it's not like your financial planner is going to do any of the work related to that either)

    That's why for the two things you listed, having an advisor is like lighting money on fire. It's actually worse. Most likely what will happen is you will pay a lot of money to get worse returns than what you would get if you just followed the free jacovalu advice.  You would probably come out ahead if you just lit $4k on fire and then followed jacovalu's plan.

    I suppose if you are *very* lucky the advisor will come up with a plan that gets slightly better returns, but once you account for the fees, then you're back to underperforming the simple plan that jacovalu gave you.

    Comment


    • #32







      Asset allocation.  Choosing the right investments.  Once I own my own practice I will be spending most of my time running that and don’t want to spend extra work and time researching the best investments.
      Click to expand…


      If that’s all you want, then just do what jacovalu says:

       




      Asset allocation. Age in bond or age minus 10 or 20 in bonds. Depends on your risk tolerance. The remainder in equities, with 30-40% of that international. Three funds. Use Vanguard. That’s it.
      Click to expand…


      That will almost certainly outperform anything an advisor will put you in especially after fees are taken into account.  That’s literally all there is to it.  That’s why everyone is telling you to do it yourself.

      As far as the “I don’t want to spend all my time researching the best investments” is concerned.  How long do you think all the do it yourselfers on here spend doing that?  If it’s not clear yet, the answer is roughly zero time. (I’m not referring to real estate investments or other non-stock/bond investments here, but it’s not like your financial planner is going to do any of the work related to that either)

      That’s why for the two things you listed, having an advisor is like lighting money on fire. It’s actually worse. Most likely what will happen is you will pay a lot of money to get worse returns than what you would get if you just followed the free jacovalu advice.  You would probably come out ahead if you just lit $4k on fire and then followed jacovalu’s plan.

      I suppose if you are *very* lucky the advisor will come up with a plan that gets slightly better returns, but once you account for the fees, then you’re back to underperforming the simple plan that jacovalu gave you.
      Click to expand...


      Thanks for the advice. I think I'm going to do it on my own for now.  At what point do I look into a more complex portfolio like some listed here?: https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/

      Comment


      • #33
        Never. 3 fund portfolio-then go live and enjoy life

        Comment


        • #34







          I don’t think I want to invest the time to learn the ins and outs of investing.  My plan has always been to have a financial advisor.
          Click to expand…


          Then hire an advisor. Make sure you’re getting good advice at a fair price. A fair price is a four figure amount per year. If you don’t want to pay that much, chances are you’ll get bad advice. Most AUM charging advisors are either also selling you stuff like disability insurance for commissions or have a minimum amount of assets before they’ll take you or have a minimum fee that is….wait for it….a four figure amount per year.

          If you want to try to game it by using Vanguard for a few years and then hiring someone for $4K a year, that’s fine, but realize that Vanguard is not going to do the same quality of financial planning work you’ll get from those on my recommended list of advisors. They’re just going to get you into a reasonable collection of low cost Vanguard index funds and rebalance it for you. You’re not going to get student loan advice, budget advice, life insurance advice etc.
          Click to expand...


          After reading all of the responses and doing a little more research I am leaning more towards doing it myself.  I have looked at your asset allocation article and might try to imitate that.  What are your thoughts on this portfolio for a 28 year old who is just beginning to invest:

          Stocks: 80%

          US Stocks: 55%

          1. Total US stock market: 35%

          2. Small market value stocks: 20%


          International Stocks: 25%

          1. Total international: 19%

          2. International small: 6%


          Bonds: 13%

          1. G fund: 6.5%

          2. TIPS: 6.5%


          Real estate: 7%

          1. REIT: 100%

          Comment


          • #35
            That is perfectly fine and you could do a lot worse. But. Why US small value and why Intl small? You have to be able to articulate why, to make it acceptable. I could give you reasons why you shouldn’t. You go first.

            Comment


            • #36
              no tips.

              Comment


              • #37










                I don’t think I want to invest the time to learn the ins and outs of investing.  My plan has always been to have a financial advisor.
                Click to expand…


                Then hire an advisor. Make sure you’re getting good advice at a fair price. A fair price is a four figure amount per year. If you don’t want to pay that much, chances are you’ll get bad advice. Most AUM charging advisors are either also selling you stuff like disability insurance for commissions or have a minimum amount of assets before they’ll take you or have a minimum fee that is….wait for it….a four figure amount per year.

                If you want to try to game it by using Vanguard for a few years and then hiring someone for $4K a year, that’s fine, but realize that Vanguard is not going to do the same quality of financial planning work you’ll get from those on my recommended list of advisors. They’re just going to get you into a reasonable collection of low cost Vanguard index funds and rebalance it for you. You’re not going to get student loan advice, budget advice, life insurance advice etc.
                Click to expand…


                After reading all of the responses and doing a little more research I am leaning more towards doing it myself.  I have looked at your asset allocation article and might try to imitate that.  What are your thoughts on this portfolio for a 28 year old who is just beginning to invest:

                Stocks: 80%

                US Stocks: 55%

                1. Total US stock market: 35%

                2. Small market value stocks: 20%


                International Stocks: 25%

                1. Total international: 19%

                2. International small: 6%


                Bonds: 13%

                1. G fund: 6.5%

                2. TIPS: 6.5%


                Real estate: 7%

                1. REIT: 100%


                Click to expand...


                Look at that.  First try and will almost certainly outperform anything an advisor recommends minus fees.

                Any suggestions that you get for improvement from other posters are going to be  relatively minor tweaks and/or personal preference.  You can obsess over those types of details as little or as much as you want.

                Comment


                • #38










                  I don’t think I want to invest the time to learn the ins and outs of investing.  My plan has always been to have a financial advisor.
                  Click to expand…


                  Then hire an advisor. Make sure you’re getting good advice at a fair price. A fair price is a four figure amount per year. If you don’t want to pay that much, chances are you’ll get bad advice. Most AUM charging advisors are either also selling you stuff like disability insurance for commissions or have a minimum amount of assets before they’ll take you or have a minimum fee that is….wait for it….a four figure amount per year.

                  If you want to try to game it by using Vanguard for a few years and then hiring someone for $4K a year, that’s fine, but realize that Vanguard is not going to do the same quality of financial planning work you’ll get from those on my recommended list of advisors. They’re just going to get you into a reasonable collection of low cost Vanguard index funds and rebalance it for you. You’re not going to get student loan advice, budget advice, life insurance advice etc.
                  Click to expand…


                  After reading all of the responses and doing a little more research I am leaning more towards doing it myself.  I have looked at your asset allocation article and might try to imitate that.  What are your thoughts on this portfolio for a 28 year old who is just beginning to invest:

                  Stocks: 80%

                  US Stocks: 55%

                  1. Total US stock market: 35%

                  2. Small market value stocks: 20%


                  International Stocks: 25%

                  1. Total international: 19%

                  2. International small: 6%


                  Bonds: 13%

                  1. G fund: 6.5%

                  2. TIPS: 6.5%


                  Real estate: 7%

                  1. REIT: 100%


                  Click to expand...


                  That's not crazy (looks like mine used to.) But I doubt you have access to the TSP G Fund.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

                  Comment


                  • #39
                    We have one. We found her on this site/NAPFA database. The group actually had a great program for those in training that was cheap and she gave us a deal to keep going from there (because of course capturing that doctor money early is a smart move on their part!) The actual "planning" part of the advising has been worth it. We are in a much better position than we were before we started and I feel better knowing we have an actual plan put together by a professional.

                    I don't know that we will be with them forever, but at this point in life (finishing up training, bunch of young kids, just a lot going on) neither of us have the time and/or inclination to make sure we aren't screwing up the details. That person is probably never going to be my husband (he's not financially illiterate--it just isn't who he is) and I'm just not up for it right now. Someday...maybe. Many of these planners offer hourly/one time financial planning fees to help you build a plan or evaluate an existing one. That might be a good option for you.

                    Comment


                    • #40
                      No.

                      Comment

                      Working...
                      X