I'm looking for a financial advisor, and would like to see who y'all recommend. I recently had a meeting with a former Corps buddy at Northwestern Mutual, and it went well (although we started talking insurance during the initial meet-and-greet). It seems wise to shop around and visit with others, and also get assistance in finding the right person. Any tips?

Don't pay more than half a percent.

FAs are the next newspaper industry. Unless you have an extremely sophisticated situation you are throwing money away.

The type/style of advisor will greatly depend on what you need/want done.

Cant speak for your buddy, but I interviewed with them & felt it felt dirty as hell. All they cared about is how many new clients I could bring in with my network. I was not impressed with the company.

Keep your money very, very far away from this "friend". Bet you a dollar he tries to sell you some garbage whole life policy.

I wouldn't even ask this question here. Get over to Bogleheads forum and ask there. Too many stock market gurus, real estate geniuses, and insurance sales people here that will muddy the waters and confuse you.

If you have real money, you may want to consult an estate planning attorney and/or CPA. Actually if you have anything you probably want to do at least the former. But investing for the average person is actually really simple, and you'll end up with more money if you keep it that way.

If you do want to hire a financial advisor, make sure he is held to a fiduciary standard. There is simply no reason to work with advisors selling products that bear only a suitability standard these days. If you don't have enough to work with a higher-end advisor, betterment is an inexpensive and relatively automated option. If you don't mind doing a little bit of the leg work yourself, you can open a Vanguard account and get pretty much anything you need from https://www.bogleheads.org/.

Unless you have a reasonable amount of complexity with your situation, it's unlikely an advisor is going to be able to offer much value to you. Cut those costs and instead let them compound for your benefit.

Vanguard

Makes sense. I'm a young Ag and am new to this game. I've been working my way through Dave Ramsey's steps to debt-free life, and spent the weekend working on my personal budget and going through past bank statements to find ways to cut waste. I've already got a Vanguard account, but want to make sure I'm as productive as possible with money I invest. Any suggestions on books to further educate myself?

Edit: went to the Bogleheads site and found lots of good info. https://www.bogleheads.org/RecommendedReading.php

Millionaire Mext Door. Look up what a three-fund portfolio is and do that.

My advice, being someone who is probably a few years older than you, is:

1. First, max your 401k (@ $18k for 2016) with low cost funds, and if you have money left over:
2. Max a Roth IRA (@ $5.5k for 2016) with Vanguard funds and if you have money left over:
3. Max a Health Savings Account if available and if you have money left over:
4. Invest whatever surplus you have in Vanguard taxable accounts (mutual funds or Real Estate)

You really don't need an advisor. Buffet has a standing bet for $1m with a hedge fund manager that Buffets money in a S&P Index fund through Vanguard will outperform the hedge fund over ten years. 8 years into the bet, Buffets index fund is crushing the hedge fund returns. There really is no secret sauce. Just invest in low cost vanguard funds.

Invest in your 401k up to the max match. Then do a Roth, then back to the 401k.

Using tax deferred is advantageous when you expect your future tax rate to be lower than your current rate. Using tax exempt is advantageous when your current rate is lower than your future expected rate.

Theoretically being a more recent grad, he's going to have a low effective tax rate. Take advantage before becoming a BMA.

I would still look at an advisor to see what they offer. You may be surprised that they do more than just put you in the most expensive fund that doesn't perform.

Following advice that isn't customized for your situation isn't wise. That is the problem with advice boards such as this.

Old Buffalo gave pretty sound advice on Roth vs pre-tax, but is assuming you are in a low bracket. I would guess the same, but you may not be and should be looked at first.

If possible, the match to your 401k should be first. You can do the Roth or the pre-tax for your portion. Then the rest should go to max out the HSA if you have one. The HSA is pretax and Roth rolled into one. After that, you can see what would be best.

There may be other great things to take advantage of with your company, but sitting down with someone who can analyze it all is the advice you should take.

Woody, Old Buffalo, and Harkrider with solid posts!!!

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Makes sense. I'm a young Ag and am new to this game. I've been working my way through Dave Ramsey's steps to debt-free life, and spent the weekend working on my personal budget and going through past bank statements to find ways to cut waste. I've already got a Vanguard account, but want to make sure I'm as productive as possible with money I invest. Any suggestions on books to further educate myself?

Edit: went to the Bogleheads site and found lots of good info. https://www.bogleheads.org/RecommendedReading.php

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I'm really just reiterating what has been said here many times.

Advisors aren't for everyone. For the average new investor that's just getting started...there's nothing that an advisor is going to tell you that you couldn't research on your own and do yourself.

The analogy that has been used several times: You can mow your own lawn or hire someone to do it for you.

Obviously if you hire someone to help you, you are going to have to pay them for their services. But it's important to figure out what their value is to you.

If they're just going to put you in a load mutual fund and never talk to you again, then you shouldn't be there.

If they're going to help guide you through everything and help you develop a plan then that can be valuable to some people. Especially if you're not interested in doing it yourself.

It gets really tiring reading about people bashing advisors. The good ones out there do a lot to help people.

I need help with mine, but I don't know where to start.
I'd love to be able to do it all myself, but I feel a lil overwhelmed when I start looking..and I have a slightly unique situation that makes me need to figure out my own plan.

you start by asking your most trusted sources on who they use or know

The OP (who said he was just starting out) visited an adviser from Northwestern Mutual. This friend immediately tries to sell him insurance, which he almost certainly does not need. And you wonder why people bash Advisors?

Here's a couple of ANNUAL fees that Northwestern Mutual has the balls to charge:

Customer Name Safekeeping -- $48.00/position/year ARE YOU ****TING ME?!?
Closing / Transfer Out Fee -- $95.00 Figure out that there are cheaper options? It's gunna cost you to leave.
No- and Low-Load Mutual Fund Transaction Fee (Service Charge) -- $75.00 Not-so-"Low" after all.

https://www.northwesternmutual.com/legal-information/fee-schedule

Again, why do people bash Advisors? That's not lawn mowing. That's comical.

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The OP (who said he was just starting out) visited an adviser from Northwestern Mutual. This friend immediately tries to sell him insurance, which he almost certainly does not need. And you wonder why people bash Advisors?

Here's a couple of ANNUAL fees that Northwestern Mutual has the balls to charge:

Customer Name Safekeeping -- $48.00/position/year ARE YOU ****TING ME?!?
Closing / Transfer Out Fee -- $95.00 Figure out that there are cheaper options? It's gunna cost you to leave.
No- and Low-Load Mutual Fund Transaction Fee (Service Charge) -- $75.00 Not-so-"Low" after all.

https://www.northwesternmutual.com/legal-information/fee-schedule

Again, why do people bash Advisors? That's not lawn mowing. That's comical.

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I am not sure what customer name safekeeping means.

Closing/transfer out fee - almost all charge something, including schwab, ameritrade, and vanguard.

transaction fee - most charge this, although not as much

Comparing lawn service to an advisor still works as does anyone in the service industry (about 80% of America).

Just for comparison, Vanguard doesn't charge you $48 in total fees for a S&P 500 Fund until you've invested $96,000 with them. Further, they don't charge a penny for transaction fees with their funds. I make "Pizza/no pizza" decisions all the time and transfer amounts like $8 whenever I choose "no pizza". No fee.

Also, for your reading / viewing pleasure:

http://www.cnbc.com/2016/02/16/warren-buffett-slips-but-still-winning-epic-hedge-fund-bet.html

http://www.pbs.org/wgbh/frontline/film/retirement-gamble/

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Just for comparison, Vanguard doesn't charge you $48 in total fees for a S&P 500 Fund until you've invested $96,000 with them. Further, they don't charge a penny for transaction fees with their funds. I make "Pizza/no pizza" decisions all the time and transfer amounts like $8 whenever I choose "no pizza". No fee.

Also, for your reading / viewing pleasure:

http://www.cnbc.com/2016/02/16/warren-buffett-slips-but-still-winning-epic-hedge-fund-bet.html

http://www.pbs.org/wgbh/frontline/film/retirement-gamble/

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so you just showed how they don't charge you but still do unless you do certain things - still didn't address the rest
or the fact that they still charge fees

ALL service industries have a low cost/no cost options - the individual can choose what works for them in their situation - in other words lawn maintenance

buying/selling costs money... hence why you have fees.

geez! I guess you want to eat at McDonalds for free too? While having 5-star customer service?

OP, to give you a mathematical breakdown of the importance of the difference in 0.05% mutual fund fees versus 2% fees take a look at the following two excel captures. The first would be from a S&P Index Fund like VFIAX. It has a 0.05% annual fee. Over 35 years, it will cost you a grand total of $14,605 if you assume that you start with nothing, contribute $18k per year, and only get a return of 7% per year on the funds you had invested at the beginning of the year. Your total profits are $1.85M, and you pay $14k in fees (0.78% of your total returns.) Finally, you end up with $2.47M in your account at retirement.





In the second scenario, you pay someone 2% to manage your money for you. Just for giggles, we assume that they get you the same return as the S&P 500 Index Fund (they don't in real life, as seen in Buffet's bet above). However, in this scenario, over your 35 years of savings, you incur a total of $424k in fees at 2%. This is just shy of 1/3 of your total return. And since these fees have eaten into your returns, you only end up with $1.58M in your account at retirement.



So, like everybody keeps saying. Is it worth $1M and 1/3 of your total retirement returns to mow your own yard?

I haven't eaten at McDonald's in probably 7-10 years. McDonald's is not food--it's trash.

This whole active versus passive management is a circle jerk. It's not going to get us anywhere.

There's a lot of value in passive management, but frankly there are plenty of people out there that should not be investing on their own. Some people aren't disciplined enough to buy $18,000 of a basic fund every year.

Hell, have you seen the $SUNE Bulls online? There's people buying into a bankrupt company with their children's college fund.

I'll ask the dumb question.

If 401k (and I assume Roth IRA) both have such high fees, are you better off only contributing to company match in 401k and investing anything else in low fee funds?

Everyone recommends 401k, then Roth IRA, then HSA, then Vanguard due to taxes. However, if you are losing so much to fees, is it better long run to invest in low fee funds that aren't tax exempt (IE you are taxed more, but have more overall due to lesser fees building a bigger nest egg)?

If you are looking for short term investing, but don't know where to begin...where do you begin?
My retirement accounts are doing okay..I don't necessarily need to keep pouring as much as I have been into that..I'd prefer to look at growth in income and I have a bulk $$ to that. No clue where to start and huge fear of being the investor that Buffalo just referred to.

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If you are looking for short term investing, but don't know where to begin...where do you begin?
My retirement accounts are doing okay..I don't necessarily need to keep pouring as much as I have been into that..I'd prefer to look at growth in income and I have a bulk $$ to that. No clue where to start and huge fear of being the investor that Buffalo just referred to.

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Don't invest in long-term vehicles with money you may need over the short-term. That definitely includes equities, but is certainly not limited to only equities.

The biggest mistake people make is choosing an investment strategy they can't maintain for the long-term. It matters a lot less what your overall investment philosophy is than that you have an investment philosophy in the first place. If you aren't interesting in really digging deep into it, stick with low-cost, market-based solutions and accept you will never be able to predict how markets will perform over the short-term. Because of this, invest with the long-term in mind and don't miss opportunities to rebalance.

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I'll ask the dumb question.

If 401k (and I assume Roth IRA) both have such high fees, are you better off only contributing to company match in 401k and investing anything else in low fee funds?

Everyone recommends 401k, then Roth IRA, then HSA, then Vanguard due to taxes. However, if you are losing so much to fees, is it better long run to invest in low fee funds that aren't tax exempt (IE you are taxed more, but have more overall due to lesser fees building a bigger nest egg)?

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Most people are in a higher tax-bracket during their working years than during retirement. Because of this, it makes sense to leverage the difference in tax brackets to the greatest extent possible.

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I'll ask the dumb question.

If 401k (and I assume Roth IRA) both have such high fees, are you better off only contributing to company match in 401k and investing anything else in low fee funds?

Everyone recommends 401k, then Roth IRA, then HSA, then Vanguard due to taxes. However, if you are losing so much to fees, is it better long run to invest in low fee funds that aren't tax exempt (IE you are taxed more, but have more overall due to lesser fees building a bigger nest egg)?

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Most everyone recommending 401k, Roth, then HSA is wrong unless your goals warrant it. I am saying most should do the HSA before the Roth. It does depend.

Most 401ks do have a lower cost option. Also, most have to have decent performing funds, so try to get ones that outperform their index to help justify that cost.

you can do this with anything that provides you a service

quit looking only at costs and look at what other values you get for that cost

obviously you haven't or won't, but that doesn't mean others can't or don't

even vanguard has managed funds that outperform the index - it is more costly, but it puts more money in your pocket after costs - to some, this is more important

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If you are looking for short term investing, but don't know where to begin...where do you begin?
My retirement accounts are doing okay..I don't necessarily need to keep pouring as much as I have been into that..I'd prefer to look at growth in income and I have a bulk $$ to that. No clue where to start and huge fear of being the investor that Buffalo just referred to.

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Start a side hustle--this can be anything. Or buy a rental property or start lending out money to other investors. Don't get involved with a Ponzi or MLM scheme. Don't contribute less than 10% of your income to retirement accounts to do these. Get other people working for you.

One of my biggest issues with money managers has been the total lack of awareness of tax consequences for their clients. A lot of my investment decisions (i.e. timing of sales, allocation to tax-free securities, long-term versus short-term holding periods) are made based on tax consequences. When I tell most advisers that taxes play a big role in my decision making I usually gt a big shrug of the shoulders.

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If you are looking for short term investing, but don't know where to begin...where do you begin?
My retirement accounts are doing okay..I don't necessarily need to keep pouring as much as I have been into that..I'd prefer to look at growth in income and I have a bulk $$ to that. No clue where to start and huge fear of being the investor that Buffalo just referred to.

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Start a side hustle--this can be anything. Or buy a rental property or start lending out money to other investors. Don't get involved with a Ponzi or MLM scheme. Don't contribute less than 10% of your income to retirement accounts to do these. Get other people working for you.

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I wasn't clear. I have money that I need to invest. I don't think it is prudent to invest it all in long term...as my retirement accounts are already pretty flush for someone of my age. I would prefer to use that money for short term investments and things with more immediate ROI.

If you woke up one day and had extra money, no debt, and an already healthy retirement portfolio, what would you do?

If you have between $30,000 and $500,000, buy as many Single Family Residential rentals as the bank will allow. You want to get the most rent for the amount of capital invested.

If you have more than $500,000, develop a parcel of land into houses or duplexes or buy a small apartment complex.

If you have more than $1,00,000, buy or develop as big of an apartment complex as you can afford.

Oh.My.Lord