[wj4]

Originally Posted by Boosted335

financial advisor is stupid..

i know one and they offer stuff u can easily do urself if you do your research and the yield is not that high unless u wanna be risky...stocks....

or real estate..

u got money put it and real estate end of story

You can't generalize base on knowing one person, that's bias to the max. Just like lawyers and doctors, there are dumb ones out there along with good ones. That's why I made the thread.

Long term stock is relatively safe, this is what I'm going for. I'm not going for short term get rich quick scheme like everyone else did, ie the bursting of the internet bubble in the early 2000. The stock market is NOT easy, it's pretty damn complex. That's why they have all sort of chart analyzing. The theory, itself, is easy to understand..but factor in stuff you can't calculate ie emotions, and you have a whole different animal.

Real estate is even riskier. How many agents do you know are eating well right now?

I've been turned off by 'investing' in real estate ever since I read "Rich Dad Poor Dad' years ago.

My first job in high school also was for a mortgage company that deals with re-fi. I thought about skipping college and just take the license exam since at the time, in 2002, all of the loan officers were eating well..driving M3's and X5's and such. That was until a month or so before I quit when no one was able to close deals.

[wj4]

A GOOD financial advisor won't just create wealth and retirement, but rather create a legacy where your money can be passed on to multiple generations and your money can be invested in a way where you will minimize taxes in the short and long run as well as minimize estate tax.

It's funny that you mentioned this. I just finished reading 'Elephant in The Room' last night and they talked heavily about legacy. I've never thought about it before until I read the book. The book was dead on with some of my older friends, making 6 figure income and are still struggling because they keep up with the Jones next door and buy the newest Benz or BMW. It's like walking the walk without talking the talk.

[wj4]

Originally Posted by fobunited

I'm actually a financial advisor and worked in a couple different firms. I've seen and worked with many great advisors who are ethical and look out for their clients' best interests. I've also seen sharks that sell whatever will make them the most money the fastest.

Alot of people ask, why hire a financial advisor? First, GOOD financial advisors are reading and watching not just the US market, but the global markets on a daily basis. If that's something you can and want to do, then fine but most people won't have the time or be interested. Second, a good financial advisor will be able to access products and investment strategies that the normal investor might not be able to get their hands on. Third, a financial advisor does more than just help you invest your money. A GOOD financial advisor won't just create wealth and retirement, but rather create a legacy where your money can be passed on to multiple generations and your money can be invested in a way where you will minimize taxes in the short and long run as well as minimize estate tax.

For the LONG term, I would advise you find a financial advisor who is a CFP. He will help you invest and be tax efficient. There's no point in generating a high return if you're going to give it all back in taxes. He will also help you build an estate so that you can make sure you won't be burdened by taxes when you start living in retirement and can pass down money to your children with as little estate tax if any as possible.

For the SHORT term, if possible, find an advisor who is or has access to a CFA. It's a good prequal. Also, interview multiple advisors. See how much time he takes to get to know YOU, your family, and not just your needs and goals, but your lifestyle. This interview meeting should go longer than an hour because HE'S asking good questions and building as large of a profile of you that he can so he can best suite your needs. Also, see what he pitches. If he pitches mutual funds and life insurance/annuities often and early, then stay away. That's the easy way out of financial advising and means he just wants to make a quick buck, not take the extra effort to be the BEST financial advisor he can be and put you in the best investments possible. Stay CLEAR of B shares and variable annuities unless you're really a good fit for them, which is about 5% of the population or less. Also see what their management fee is for an actively managed or wrap portfolio. If it is 1.25% or more annually, walk away.

Let me know if you have any more questions. Hope this helps!

If you were a regular Joe like I am, where do you suggest on finding a good advisor? I know there are a lot of dirty ones out there who want quick money. My goal is absolutely long term, there's no way in hell I'm leaving my future income when I retire up to the government. Thanks, man.

[jaiman]

Originally Posted by wj4

Thanks for answering, Jeep.

To put in an answer of my own to jaiman - I definitely will do my own homework on the investments I plan on partaking in, I'm not just going to cut a check just because someone says so. However, just because I read several books on basketball doesn't make me Michael Jordan. Remember back when everyone thought they can win the stock market game during the bull market? Books on the SP500 were on the top 10 list. People foolishly emptied out their life saving because they thought the market would just keep going up and up and up.

I've averaging a book per week and got about 5-6 lined up for the summer so far. I practically live at the local Barnes And Noble now, heh.

Sadly, most, if not all, of my friends aren't in this side of the business...they're all pre-law, pre-med, etc.

Sorry, but I still don’t get what you want from a financial advisor. You mention that you want to retire at 40. Have you calculated what amount of savings you’d need to have to reach that goal?* Is that what you want the advisor to do? Or do you want someone to pick stocks and build a portfolio for you? Or do you need them to show you how to structure your assets in the most tax efficient way possible? Because the skill set the person will need and the questions you will have to ask are very different depending on what you need or want them to do for you. I’m not sure you’ve fully thought out what it is you are looking for.

Personally, I think FAs are the lowest rung in finance. Their compensation is based on selling you product. That’s really it. They generally don’t have the skills to build portfolios that have any sort of value add (and if they did, there are far more lucrative and intellectually rewarding jobs besides being an FA). They are salespeople. That’s it. I’d challenge any FA to show me a track record of 15 years or more where they have outperformed a broad index (SP500) on a risk adjusted basis.

My friends ask me all the time for trading ideas, and I always tell them they are best off in index ETFs that they invest in consistently and regularly, and to max out contributions to any available tax deferred or tax free savings accounts available in their area. Then you can just sit back and wait.



*my rough calculations show you’d need to save 72k per year from age 23 to age 40 for each 100k (in 2009 dollars) in income you’d like to have in retirement income. I’ve assume you’d want your retirement income to grow at the rate of inflation (assume 3%) and that you’d live 45 years. I’ve also assumed a rate of return of 8% annually on investments which would be a decent number considering the mix of FI and equity investments that would be used throughout the life of the retirement portfolio. In this optimistic scenario, you would need to save more money after tax, than the vast majority of Americans earn before tax.

[Maestro]

I can tell you I have been through a couple of guys.

One was referred to me by a firend and he was my age, actually a little younger, he was hungry and worked hard. The problem is he worked for some the big companies over time and kept moving around since the big companies set goals for their people and if you miss it one time you could be out the door. In the meantime they try an keep as many of the clients they brought in and move them to the more senior advisories. Well I got tire of this, but this guy finally set up shop at Edward Jones, as few have mention.

The way Edward jones works is you are your own boss and you have your own store front, kind of like a franchise. But you're limited to what Edward Jone supports in the way of research. This is true for many Investment firms, many time you are stuck doing what the company is pushing in their own research.

Well the Edward Jones guy got fat and happy and was no longer interested in working the market for me. He was happy putting money in "Safety Investment" ones that he did not have to worry about and did not call you as much. Most of his clients were older heading to retirement so their investment focus is different. So you want someone who has clients that are more like you.

I am now with NYC guy, he right across the street from NASDAQ, he is the owner of the company which holds his name. I can call him anytime and talk about investment ideas and the first time doing busy with this guy, which he found me cold calling, he game me a few ideas before I ever gave him a dime and I made money of them. It also was right around 2000 when the market was tanking and he brought forward ideas that made money in a down market, and it did not require shorting stocks or do some of the other risky things.

I am still with the guy and have referred a number of people to him. before you ask, I am down in the market like many others, but all my investments are doing okay and some are still kicking out money every quarter. His picks were solid, even with a down market I know these will come back verses disappearing as in 2000

Now on Fees, all advisors make money off your money some how. Some charge a maintenance fee, others change a per transaction fee, and some make money from pushing certain funds or investments.

What I like about working with a guy on his own, those fee are truly negotiable. Every time we buy and sell something, we talk about what his fee is worth depending on how well it did, there have been a few bombs, and I paid nothing on them. With the bigger companies you paying no matter if they make or lose your money.

Guess what, you can do this all yourself, I have done that myself, and still do some of the research myself. But I do not have the time it takes, my life is busy with kids, so I rather spend the time with them, and call my guy up and tell him to make me money. Plus I get to yell at him when all hell happens.

[Maestro]

Originally Posted by wj4

If you were a regular Joe like I am, where do you suggest on finding a good advisor? I know there are a lot of dirty ones out there who want quick money. My goal is absolutely long term, there's no way in hell I'm leaving my future income when I retire up to the government. Thanks, man.

Get recommendation, from people you trust, but be careful not everyone had the same investment strategy. Not all advisory and be good at all types of investments, it just too hard. My person is great in the financial markets, like banks and such, But not so go in the high tech, but that is okay, I work in high tech and know those companies, so my guy will some times call me up and bounce ideas and thought off me to see what I think about them.

I good adviser will spend a lot of time getting to understand you and what interests you and what you invest goals are. But be careful of the package invest goal questions, SOme guys come in ask all these standard questions to make you think they are interested in your goals, but only to show you they have these great package investment that meet your goal. They just basically profiled you.

[Maestro]

Originally Posted by jaiman

Sorry, but I still don’t get what you want from a financial advisor. You mention that you want to retire at 40. Have you calculated what amount of savings you’d need to have to reach that goal?* Is that what you want the advisor to do? Or do you want someone to pick stocks and build a portfolio for you? Or do you need them to show you how to structure your assets in the most tax efficient way possible? Because the skill set the person will need and the questions you will have to ask are very different depending on what you need or want them to do for you. I’m not sure you’ve fully thought out what it is you are looking for.

This is an excellent point, most FA have no concept of tax issue especially how an investment might impact you tax wise. Some FA have access to tax advisers. If they do not then you might need to have your own. Some guys will push trades only to have you pay lots of taxes on them and eating up most of your profits. I have IRS and do lots of trades in it plus investment kicking out dividens and capital gain which are not tax at my high rate now.

[b335i]

If you are still looking for a financial advisor my step-father has been in the business for a number of years. He does keep his client base relatively small so he is able to focus on individual clients and their needs. PM me if you are interested.

[ejheverest]

Read a book on how to budget your money, then after you have >20,000 start to look into investing more.