Using a fee only financial planner

[MichelleB]

SuzanneSLO …. http://www.daveramsey.com/elp/home/?ictid=aj92

You'll need to click on investing and then fill out the info for them to contact you.

 

[SuzanneSLO]

SuzanneSLO …. http://www.daveramsey.com/elp/home/?ictid=aj92

You'll need to click on investing and then fill out the info for them to contact you.

I was on that page but only saw investment advice ( and real estate, insurance, tax etc.) not financial planning. The OP was not looking for investment advice. -- Suzanne

 

[MillauFr]

I think we started with 10,000 bucks its grown over the course of 30 years to close to 5 million.

my fp runs 1% of my portfolio. if I do a lot of active trading then some years it's a little more.

now you've got some education in this area so certainly there are great hourly folks out there.

So you're paying someone 50,000 a year? That is outrageous. He shouldn't charge more than .1 percent

 

[dcfromva]

Can anyone help me understand how this works? How much time does it take and what should I expect to pay? Do you go annually after your first meeting? My finances are fairly simple. I just need advice and strategies on whether I should put more in my HSA, how much in my employee IRA, 529s, open a Roth IRA, etc. I'm saving a good portion of my income but I want to make sure I'm saving it in the right places. I'm not interested in having someone manage my investments. I'm very happy with Vanguard.

Vanguard has FAs available once you reach Voyager level (50,000). The fee is 0.3 percent annual fee AUM (Assets Under Management).

https://investor.vanguard.com/financial-advisor/financial-advisor-fees

Here is another link that might be of interest to you:
http://www.bogleheads.org/
The folks on this board are not too keen on FAs. But, you can learn a lot about index investing there.

 

[rcbarker]

That is incorrect. We pay 1% per year, paid quarterly. Our planner IS a fee only planner, in that there is a 1% annual fee of our portfolio. A commission based planner takes a commission amount based on what type of investments the money is invested in.

Regardless of how you view it. The term "fee only" for financial planners is used in situations where you pay a flat fee or an hourly fee to the planner for their services. In a "fee only" arrangement as most commonly used in the industry, the fees paid are not tied to the value of the assets.

When you see financial people (clark howard, dave ramsey, etc.) recommending a fee-only planner, they are not talking about someone who bases their fees upon the value of the assets managed. Thus, regardless of whether you see your planner as a fee only planner, it should be clear that when people hear that a fee only planner is the best route, the "% of assets fee" is not the type of planner that is being recommended.

 

[Nebraska_Disney]

Pay yourself first, if possible have it taken directly from your pay before you see it. No matter how much or how little you earn, if you have a budget and keep to it, you will meet all your goals. Don't feel you have have have large chunks of money to get started, everyone started somewhere.

1) Pay down any revolving debt you have (credit cards, etc). You can't have these obligations hanging over your head as when you are paying the 10-18% interest on the balances, that is money you are not able to save.

2) Retirement savings should be your number 1 goal. 529's etc will have to come 2nd.

3) Vanguard is a great choice. You may contact them for advice in setting up a portfolio and pushing money into it each year. Roth IRA's are great as the money will come out, tax free, when you start using it in retirement.

4) Take advantage of any work retirement plans (401k's etc) and get the maximum match they provide. That is "free money" just for participating. When/if you get raises, increase your contribution as you will not miss it.

5) Using flex spending accounts for your medical (sounds like you are) as the tax savings are great.

6) There are many tools to input what you have done to see if you have the right balance. Most people your age should have a 75-25 to 80-20 stock/bond mix. You can go with more aggressive holdings in this mix if that is your style. You do have time on your side, so I would suggest being aggressive with how you pick stock funds.

7) Mutual funds are a great way to start. If you get some equity built up, you may start looking for individual stocks to buy. I like dividend paying blue chip stocks which have been around. I don't look for the next big sector or hit when it comes to individual stocks.

8) Keep talking to others, keep reading, go to free seminars and maybe even meet with some financial advisers...you may pick up some useful tools along the way. Your workplace may offer face to face meetings with the group that sponsors your retirement plan, another good option.

You can accomplish a lot on your own and if it does become more complex, then you can seek advice and help then.