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Frank22
Out of curiosity, at what age do most dentists begin saving for retirement? Also, how much do most dentists retire with?
Everyone's different. Some people invest so their kids and family in the future have land/cash. Some people have a specific goal to reach before retiring. No specific amount of money. I think it's around 60 though, probably 65. I don't know any dentists that old though. The money you retire with is what you make it out to be.
I plan to begin saving for retirement the first day I earn income. Most young people (whether dentists or otherwise) don't have retirement on their radar but they should. It's so much easier to reach your goals if you begin saving as early as possible. Everyone needs a different amount of money--it depends on your lifestyle and goals.
+1. Start early and get in the habit of savings. Open a Roth IRA, and if you have an employer 401k contribute, today - time is money. Once you're a dentist make sure to put away enough so that you can be secure in your older years.
Do as they say: "Pay yourself first".
I read at a financial site related to medical professions (a firm that did financial services for dentists) that dentist on average were retiring around 61. They also noted that most of these were "planned" retirements - indicating that they have meet their goals and were happy to go into retirement. Personally, I don't think I could walk away from work that young but you never know. Just plan well so that going to work is a choice rather than survival in your later years.
Do as they say: "Pay yourself first".
I read at a financial site related to medical professions (a firm that did financial services for dentists) that dentist on average were retiring around 61. They also noted that most of these were "planned" retirements - indicating that they have meet their goals and were happy to go into retirement. Personally, I don't think I could walk away from work that young but you never know. Just plan well so that going to work is a choice rather than survival in your later years.
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I started my practice in 1981 and started saving for retirement in 83 or 84 with an IRA. Then in 87 I opened a Keogh pension- profit sharing plan and have contributed the max. After 28 years they now have a combined value near 2 mil. Could have been more if I had been more aggressive in my early years, however hindsight is always 20 - 20. IMHO planning long- term and living within your means are key to a stable financial future. At age 56 I could retire now but honestly I enjoy my practice and much like my retirement I am planning for a successor in the future.
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Frank22
Ohiodmd wouldn't you have made more money if you put all of your retirement into one account?
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Remember what I said about hindsight. Actually I really would have kicked ass from an investment point of view if I had converted to an age weighted vesting schedule 10 years earlier than I did. With the same overall owner employee pension profit sharing dollars I could easily have been at the three mil mark. For those that like numbers http://www.soa.org/library/proceedi.../1990-99/1992-1993/january/rsa92v18n1b12.aspx. provides some insightful information.
In answer to your question. My IRAs have been uncontributed to since I started the Keogh. Contributions would not have been tax deductible although they would still grow tax deferred. Today all my retirement accounts are managed by an investment professional who obtains a decent rate of return allowing me more time for other things.
In answer to your question. My IRAs have been uncontributed to since I started the Keogh. Contributions would not have been tax deductible although they would still grow tax deferred. Today all my retirement accounts are managed by an investment professional who obtains a decent rate of return allowing me more time for other things.
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Frank22
Thanks for your input and congratulations on your financial security; I'm under the impression that if you sell your practice and let your interest compound you will have more then enough money to achieve a lifetimes worth of financial security.
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Been saving since I graduated and started working as a dentist in 2005. I'm really no better off now in the retirement savings department than I was 7 years ago. Compound interest has done nothing for me. Evaporating negative interest is more like it.
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As for the initial question of this thread, I started my 1st year out of residency when I entered private practice
I've been quite proactive with working with my retirement fund manager the last 5 years, and as such have been lucky enough to see the overall value of my profit sharing account go UP each year (and more than just the 40-45k a year I've been contributing to it!) Some years it only been a couple of percent, others it's been in the mid teens, but it's been up every year!
The key is that in conjunction with both our retirement fund manager and our practice accountant, at the beginning of each fiscal year, my business partner and I decide roughly what we'd like our profit sharing contributions to be for ourselves, and then figure out roughly how much that means that we need to fund it (our employees are part of the profit sharing too) and then come years end we generally end up with roughly the amount that we wanted for ourselves (the actual amount is determined based on a formula set forth by the laws and regulations that governs the plan that takes into account things such as the category of employee, hours worked, production, etc.) That way we know if our target total for the profit sharing fund is say $140k (what it is for this year), then we know that we need to be setting aside roughly 12k per month into our profit sharing account so that come the end of the year we won't need to find the cash to make say a 50k contribution and also end up with the rough amount that we want, and that we've told our employees that they can expect as part of their overall total compensation
How do I go about learning this the same way you did? Business major or books?
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probably neither. i would bet one year of your average salary as an eventual dentist that DrJeff learned how to run his business like >9000% of practitioners out there do and did: "as they go".
the other thing is: for the things you can't do, you hire experts to do them.
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Did you miss the part about the "retirement fund manager"? Any of us can get one of these guys. Sounds like Dr. Jeff has one that looks out for his interests which it can be hard to find one you trust. The other key part of his post is the word "lucky." That's what no one tells you when you "save" for retirment by tossing your money into the stock market in various forms. It's all about the luck.
Do retirement managers give advise like the one where Dr. Jeff pulls in money together from associates and hired staff into a single investment plan kind of deal?
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It is not important that how old is our dentist, the remain thing is that is he or she cure you family and you or not.
Thanks.....
Thanks.....
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Some of it started early on, where I had multiple generations of family members before me who early on stressed to concept of "saving for the future" to me. Since I actually listened to my elders 😉 , that basic concept was with me from day 1
Other than that it was also listening to my colleagues, who through their own experience have acheived financial success and then seeking out various advisors (financial planners, accountants, lawyers, etc) who know far more about what I can and can't do and then have a good deal of interaction with me about what my goals are.
When that was all put together, the path that I wanted to take became pretty clear for me. But it's also a path that regularly I keep checking up on and make adjustments too as needed. And sometimes those adjustments have been changes in who I use as advisors
BTW, the "only" actual business type course I've ever taken was a semester of accounting 101 in college, and then maybe 3 or 4 continuing education courses on investing/personal finance management, etc. I will admit though to actually spending a few hours a week reading the Wall Street Journal and other business related publications and watching or listening to some of the commentators/shows on either Fox Business Channel or CNBC. I've realized that while I may know a bunch about teeth, I don't know nearly as much about the in's and outs of the finacial markets and the opportunities that they can present, so it makes sense to utilize the knowledge of those that do
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100% correct
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My offices uses a group called Mercer Financial out of California. My practice has an account with them that encompasses available information for all my staff members that participates in the plan, and we pay a monthly fee for that based on what the total aggregate amount of all of our individual accounts are worth. We can get either online or phone advice as much as we want, and the website info that they have for clients is quite extensive. They have about 10 different "model" plans that based on one's own personal risk comfort level have various suggested investment concepts from very conservative (think a large percentage of the total investments in fixed interest paying money market accounts) to very aggressive (think a majority of the investments in funds filled with much more risky emerging market based investments) and a full mix in the middle. Via a few clicks of the mouse, once YOU decide that you want to make a change, you can change what your invested in. They also send out weekly e-mail updates highlighting recent trends and how those may/may not effect things and for my office atleast where we have 13 people in our office account, the main advisor who handles our account comes to my office once a year for a face to face meeting for those who want to do so.
There are plenty of folks who will choose just to take what the advisor says at face value 100% of the time and go with it. There are plenty of others who will make changes to how their invested themselves based on their own research. Both can be great, it just gets down to how "hands on" you do or don't want to be and your comfort level with your advisor
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It actually over the last 15 years has taken me 4 different retirement advisors to reach my current situation where I am quite comfortable with who is managing my money. I know that in the next few years, based on what he's said to me, that my current planner will be retiring (he's just about met his own personal "magic number" that he wants) and then i'll be looking not just within his own firm for someone new, but also at different firms/managers to find someone who I feel comfortable with. I am also aware that I probably will end up taking a few years to 100% settle on my new advisor when the time comes, and as such have started the process with letting a few different advisors handle some smaller segments of my retirement savings now (my current advisor actually recommended I do this). So where i'll be at in say 5 years might be very different than it is now, but then again as we get closer to retirement age, most people tend to change their investment strategies too, so change is needed to get to the "finish line" in most cases.
As with many people, the 1st advisor I used was the advisor that my parents were using, and as such had managed my college fund that my parents had set up for me. It was an easy starting point. Over a few years, I realized via talking with the advisor that the ideas that my wife and I had were different than the ideas that my parents had and as such, while he didn't do a bad job, the advice that my parents advisor was giving us, based on his knowledge and comfort levels wasn't exactly what we wanted, so we started asking some of our colleagues who they used and started meeting new advisors and when we found one we felt comfortable with, letting that person start managing our money.
Still to this day, I have 3 different advisors managing some of my money. Most of it(about 80%) is with my primary advisor, but I have about 10% of it now with a previous advisor and 10% of it with a possible new advisor for when my primary advisor finally retires. It is interesting to see how each advisor does, since we have conveyed to all of them the same level of risk that we're willing to take and the same long term goals. Most of the time the final results are within a few percent of each other, but I do find it interesting, and quite educational I might add, to see how the three go about managing my money, and then will sometimes use that knowledge that I pick up from 1 advisor to make slight adjustments to how a different advisor has my money allocated. But that's my own personal level of interest and comfort at handling my investments, and I know that for some that's way too involved where as for others it's not nearly involved enough. I know that there are plently of dentists out there who inbetween hygiene checks stop at their desk, open up their e-trade account and make a few quick trades based on what's happening at that very minute in the world markets, whereas there are plenty of other dentists who the only interaction they have with their retirement investments is when their quarterly statement arrives and they look at it. Both ways can work very well
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Read the book 'The Millionaire Next Door' for the facts on how 95% of American millionaires are frugal and self made. No secret and no costly advisor needed...you just have to apply the simple concept in the book to your life.
Of course as soon as you make/save a little money, you'll receive plenty of invitations from people wanting to manage your money for a piece of your money.
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Frank22
I wish I knew more about finances; can someone please tell me how it's possible to put money into a retirement account and for that money to actually decrease? Are financial advisors really that bad at what they do nowadays?
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Totally depends on what you're invested in.
For example, if all your money is in what i'll term as "guarenteed income" (i.e. a savings account that pays you X% interest, or a CD that pays you Y% interest when it's term comes due, or a bond that pays Z% when it's term comes due), then you know that the money that you've invested in that type of investment will have appreciated in value by whatever the set rate of interest is over the specified amount of time. The thing with these "guarenteed income" type of investments, is the rate of interest that you receive is very low, typically not more than a couple of percent. So if you were investing $100,000 in a 12 month CD that paid 1% interest, at the end of that year you'd have $101,000 - the actual number might vary slightly based on fees, etc, but you get the idea.
If you invest in what i'll call "variable return" income investments, such as stocks, real estate, other types of bonds, etc. Then as their name implies, the rate of return is variable, and that could mean that at the end of that same 12 months, that same $100,000 I mentioned before could be worth $50,000, $90,000, $100,000, $120,000, who knows??? It all depends what has happened to the more highly variable type of investment over that time. When managed correctly, there can be a much greater upside in variable return investment than fixed investment and that's why they are popular, but not all variable income investment will have a net positive gain. For example if real estate was your variable investment of choice, and you bought at/near the height of the real estate market 5-7 yrs ago, that say $100,000 property you bought then as an investment might only have market value of $75,000 now. But if you had bought that same property say 25 years ago for $50,000, at one point it was worth $100,000 but now it's "only" worth $75,000, so you're still at a net positive 25k investment, even though in theory you've "lost" 25k over what you could of sold it for at one point. Confusing, sure. But in general investments all have a degree of risk associated with them, some is just greater than others
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Sure, here's what happened to me. When I graduated, I kept hearing that a "ROTH IRA" was this great thing for retirement. So I decided to get one. That meant taking my money to a place that sets up a ROTH IRA account for you. In my case being a newbie dentist, I walked into the Fidelity office that was around the corner from where I lived. You see those ads for Fidelity, Charles Schwab, Vanguard, TD Ameritrade, etc. that say "we're there for your retirement!" so that's where I went. They said "Great! Now that you have a Roth IRA, you need to put this money into something that will grow. Because you are young, you want aggressive growth. We recommend this mutual fund." Sure why not. I had heard this word "mutual fund" connected to the word "retirement" so I figured this is where your retirement money goes.
That was 2005. For a few years, that little balance I started with was growing and I thought "So this is how retirement works. You park your money and it grows, just like the commercials!" So I added more to that balance in subsequent years. Then I started reading headlines in the news about banks collapsing and stock crashes and what not. And I saw that my little balance was plummeting down to below the level of my original deposit.
What I didn't know in 2005 and learned much much later is that a "mutual fund" is just a neatly packaged bundle of stocks. In fact, it seems like most of what is out there for "retirement vehicles" is tied to the performance of the stock market. Hence if the stock market is down, your funds are down. This is why you hear about dentists who can't retire because they lost all their savings in the tech crash in 2001 and post-real estate bubble crash in 2009. All that money they had tied up in various retirment funds crashed and they are left with less than what they put in.
All retirement "advisors" I seem to meet are the young types. I can tell that this is just their first job where they have to recruit clients to survive and then they leave the firm at a moment's notice if they get a better job. I've had to start saying no to their pitches because I don't need a newbie to tell me that I should be in aggresive growth because I'm young. I have found that getting a recommendation for a good financial advisor and a good accountant are incredibly difficult.
I continue to put the the maximum I can according to the tax laws into retirement accounts. What I didn't know then that I know now is that you can open retirement accounts and keep your money in cash (money market accounts). That way if some scumbag bank that has been mismanaging itself is discovered tomorrow and sends the stock market crashing (Bear Sterns, Lehman, AIG, I'm looking at all of you), at least you still have what you put in.
Pick up one of those "Dummies" book and start reading.
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This is one persons experience in a short time frame. My father has said his retirement has grown at a net rate of ~8% since he started contributing 40 years ago. Are you going to get that kind of return on a 1.5% CD? You'll be wiped out via inflation.
There is nothing wrong with holding safe assets that have little risk but little return. I just don't think it's good to be so safe that you put all your money in vehicles that have a net loss every year due to inflation.
Here's the quick compounded annual return of the S&P 500 for 50 years:
There is nothing wrong with holding safe assets that have little risk but little return. I just don't think it's good to be so safe that you put all your money in vehicles that have a net loss every year due to inflation.
Here's the quick compounded annual return of the S&P 500 for 50 years:
- Last 10 years: -2.9%
- Last 20 years: 6.1%
- Last 30 years: 8.3%
- Last 40 years: 6.5%
- Last 50 years: 6.2%
EDIT: OP> I see you're a conservative investor. Have you checked out O'Leary funds? You may like their philosophy.
http://www.olearyfunds.com/
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I only posted my experience because Frank22 sounded just as lost as I did when I graduated. I seriously had no idea how any of it worked. I still don't claim to know much but I sure have a better understanding now than I did when I graduated because I had to go out there and learn it for myself. I continue to learn because it's quite complex IMO. I consider the tanking of my portfolio to be the cost of my business education.
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Frank22
Wow--I just thought that a dentist put money into a savings account every year where the bank offered 6.5% annual interest or something of that nature. I had no idea that saving for retirement was a matter of purchasing stock or real estate.
I'm going to take a course in personal finance next semester after reading this.
So would most of you agree that funding your retirement though a pension plan is a matter of being successful on wall street or picking the right legal and financial advisers?
I'm going to take a course in personal finance next semester after reading this.
So would most of you agree that funding your retirement though a pension plan is a matter of being successful on wall street or picking the right legal and financial advisers?
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CDs and High yield savings accounts only pay about 1-1.5% which doesn't even cover inflation. Personal finance knowledge is a MUST for any dentist or professional. You spend years of your life to earn a good income, you must understand what to do with it. It really isn't that difficult or complex. I am a big fan of Vanguard and passive investing. I highly recommend starting out with this book:
http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365/ref=sr_1_1?ie=UTF8&qid=1346190370&sr=8-1&keywords=bogleheads+guide+to+investing
It'll give you a good basic understanding of investing so you can start on the path of good decision making.
Manipulation - How Markets Really Work
http://sjlendman.blogspot.com/2009/05/manipulation-how-markets-really-work.html
Internet Bubble 2.0?
http://www.dailymarkets.com/stock/2011/05/19/internet-bubble-2-0/
Most SDN participants looks at the student loan bubble; while I was looking at the internet bubble 2.0...🙂
Shiller's List: How to Diagnose the Next Bubble
http://dealbook.nytimes.com/2010/01/27/schillers-list-how-to-diagnose-the-next-bubble/
This goes along with the theme of wealth preservation...get out before the bubble burst.
This is of course as long as the fed keeps interest rates at zero..boom and bust cycle should be the norm.
Crash Course: Chapter 1 - Three Beliefs by Chris Martenson
http://www.youtube.com/watch?v=XnXZzx9pAmQ&feature=channel&list=UL
http://sjlendman.blogspot.com/2009/05/manipulation-how-markets-really-work.html
Internet Bubble 2.0?
http://www.dailymarkets.com/stock/2011/05/19/internet-bubble-2-0/
Most SDN participants looks at the student loan bubble; while I was looking at the internet bubble 2.0...🙂
Shiller's List: How to Diagnose the Next Bubble
http://dealbook.nytimes.com/2010/01/27/schillers-list-how-to-diagnose-the-next-bubble/
This goes along with the theme of wealth preservation...get out before the bubble burst.
This is of course as long as the fed keeps interest rates at zero..boom and bust cycle should be the norm.
Crash Course: Chapter 1 - Three Beliefs by Chris Martenson
http://www.youtube.com/watch?v=XnXZzx9pAmQ&feature=channel&list=UL
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I would certainly read up on economics (specifically Austrian economics) for anyone actually still in college and plans on becoming a dentist. I've been buying Gold and Silver for the past 3 years (the actual Physical Bullion, not the stocks or ETFs that they can charge Windfall profit taxes on).
You see, the fundamental problem with the U.S. economy is we've become a nation of consumers and spenders. What we really need (and what made us prosperous during the industrial revolution) is savings and production.
The Fed (Federal Reserve) is using numerous tactics to give the public the illusion that the dollars that we make are somehow worth something. The truth of the matter is that since they try to keep propping up our economy with continuous borrowing, and printing fake money, the value of our currency will continually go lower and lower over time. They've been doing their best to try to keep these commodity prices down by using their constituents at these big institutional firms to pour in billions of dollars to counteract the up movements of these commodities. They do this by a method called naked shorting where they cause a mass selloff of commodities on the open market and slowly repurchase them once the price has fallen to their liking.
Learn about the fundamentals of economics once you graduate. And not from Keynesian textbooks either. You can thank me later 👍
You see, the fundamental problem with the U.S. economy is we've become a nation of consumers and spenders. What we really need (and what made us prosperous during the industrial revolution) is savings and production.
The Fed (Federal Reserve) is using numerous tactics to give the public the illusion that the dollars that we make are somehow worth something. The truth of the matter is that since they try to keep propping up our economy with continuous borrowing, and printing fake money, the value of our currency will continually go lower and lower over time. They've been doing their best to try to keep these commodity prices down by using their constituents at these big institutional firms to pour in billions of dollars to counteract the up movements of these commodities. They do this by a method called naked shorting where they cause a mass selloff of commodities on the open market and slowly repurchase them once the price has fallen to their liking.
Learn about the fundamentals of economics once you graduate. And not from Keynesian textbooks either. You can thank me later 👍
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The only thing of value to come from the Austrian school are some elements of their business cycle theory and opportunity cost. Both of which are now in more accepted models. The rest of the Austrian school is not well accepted by economists.
Full disclosure - people who like the Austrian school do so because of political reasons. Indeed, the Austrian school does not provide models and operate off of rule-of-thumb-tenets rather than quantifiable concepts.
I do agree though that economics is a great class. Just take a macro class at your college (micro is good too), read The Economist, and explore different theorys such as Keynesian and Monetarist models. After you get into this stuff you can start reading academic papers and see how deep the trail goes. But, IMO anything useful from the Austrian school will be taught by studying these other subjects. Austrian model will lead you down a politically motivated path and cause you to make assumptions that are not established.
Full disclosure - people who like the Austrian school do so because of political reasons. Indeed, the Austrian school does not provide models and operate off of rule-of-thumb-tenets rather than quantifiable concepts.
I do agree though that economics is a great class. Just take a macro class at your college (micro is good too), read The Economist, and explore different theorys such as Keynesian and Monetarist models. After you get into this stuff you can start reading academic papers and see how deep the trail goes. But, IMO anything useful from the Austrian school will be taught by studying these other subjects. Austrian model will lead you down a politically motivated path and cause you to make assumptions that are not established.
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Where do I go to buy physical bullion?
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It's not well established by economists because it's in the governments best interest to teach the Keynesian philosophy to students. They think that continuous expansion of a consumer based economy somehow gives us real wealth: it doesn't. And if by predicting the dot com bubble, the housing bubble crash, and the real crash that's heading our way in the very near future is not useful, then I don't know what is. The mathematical models used in Keynesian philosophy are flawed, as is the basic tenets of what it teaches. It wasn't Keynesianism that gave our country real wealth, and it won't be keynesianism that gets us our of this mess that we're in now. That will come from a true laissez-faire contraction where supply and demand is influenced only by the free market
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Don't buy gold bars, buy gold coins because they are much easier to exchange for actual fiat currencies. The best place I found to buy actual gold coins is to take a trip to Hong Kong. Hong Kong is widely acknowledged as the cheapest place to buy gold coins. Go to Queen's Road in Hong Kong's Central District, and youll find well-known banks, such as HSBC, shifting gold coins for as little as 0.2% above the premium. The price will obviously be a little above the spot price, but it'll be well worth it. Another great thing about these coins is that you can sell them in countries like England without having to pay a capital gains tax. 👍
So it's a conspiracy of sorts? For anyone keeping score please reread my previous comment about the political bent to Austrian economics.
My point is that you take what is good from each school to come up with a composite that is as close to reality as possible. Austrian school is econ for the layman. It's not rigorous and is not specific. They are okay with that because they believe that the economy cannot not be quantified. I think it can be and they're just lazy. If you want to learn about GDP [quantified], the banking system, consumption, velocity of money, levelers, and interest rates or inflation don't look to the Austrian school.
BTW: Don't buy gold right now. Why would you buy something at such a high? Why not look into other less costly metals?
My point is that you take what is good from each school to come up with a composite that is as close to reality as possible. Austrian school is econ for the layman. It's not rigorous and is not specific. They are okay with that because they believe that the economy cannot not be quantified. I think it can be and they're just lazy. If you want to learn about GDP [quantified], the banking system, consumption, velocity of money, levelers, and interest rates or inflation don't look to the Austrian school.
BTW: Don't buy gold right now. Why would you buy something at such a high? Why not look into other less costly metals?
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Because Gold is drastically undervalued right now. There are large short positions in both Gold and Silver, and once these institutions get squeezed out, both metals will start raging higher. Currently 1% of institions are involved in long positions in Gold...imagine if that turns out to be 3%. And all those topics you mentioned can be taught in the Austrian school.
From a technical prespective, Gold looks very solid right now to go a lot higher. I've been trading futures, stocks, bonds, and options for over 8 years now, and it looks very sound...
It may take a few years, but mark my words, Gold will easily reach $3000/ounce. I wouldn't be surprised if it goes as high as $5000/ounce. Europe is just the beginning...once the problems start cascading here nuclear QE will be in full effect
When gold corrects it's not going to touch the sides on the way down. Why not invest in growing markets like BRIC countries?
EDIT: I think we differ in our views of the global economy. I don't think the world is coming to an end in 2012. I can see hedging on some commodities if that were the case. But I would rather invest in growing markets than a non-income-yielding commodity. I expect gold to come crashing down in the next few years - it's inflated on a bubble due to rampant advertising that has bought interest from just about everyone and their brother. I've been selling gold off to keep it at a constant % of my net worth.
EDIT: I think we differ in our views of the global economy. I don't think the world is coming to an end in 2012. I can see hedging on some commodities if that were the case. But I would rather invest in growing markets than a non-income-yielding commodity. I expect gold to come crashing down in the next few years - it's inflated on a bubble due to rampant advertising that has bought interest from just about everyone and their brother. I've been selling gold off to keep it at a constant % of my net worth.
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Everything eventually corrects, but that time is not here for gold right now. As mentioned previously, the big institutions are not long Gold right now. The Fed is doing everything they can to undermine Golds true value, but eventually all this effort will go to waste. Considering the amount of inflation we've had in this country this past decade, look at the price manipulation that's taken place so Gold runs higher nice and steady to give people the illusion that the U.S. dollar is somehow still worth something
I'm not telling for people to put every dime they have in Gold..The BRIC countries are a fine place to diversify. I'm telling people not to trust a consumer based economy that during the "booming" recovery years is yielding a 15% unemployment rate. The QE effect will soon wear off on these markets within a few years.
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Well, one of us is right...if im still around ill bump this thread in a few years regardless if I was right or not.
Sounds good. Let's check er' out in 2014 or 15. This is obvious but I just wanted to mention that I have no crystal ball. If anyone should read what I said I would say do some reading and come to your own conclusions. Don't mistake me for a sage or prophet.
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Frank22
Question: is it possible to get an average rate of return of 10% to 15% on your investments if you're a really good investor? I've read that Warren Buffet has averaged 20% over decades. Of course, he's among the best in the world, but we're also not aiming for that high of a rate of return either.
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That is basically impossible... forget about it. There will be good years and bad years and they end up averaging to about 6-7% return.
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Frank22
Another question: will I be allowed to invest in my own stocks and real estate, or will my financial adviser determine all of them for me?
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It's up to you to make that decision. Chances are your decision is just as informed as paying 1% of your asset to your financial advisor/salesman every year for the same result.
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Read Bogleheads Guide to Investing. Its a great resource and shows that you can invest yourself in low cost index mutual funds and give yourself the best opportunity to receive solid returns from your savings over the long run.
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A financial adviser makes RECOMMENDATIONS based on their presumed greater knowledge of current trends in investment opportunities and how those relate to your goals. You can choose to follow them verbatim, or if you choose to (presumably after doing your due diligence on your adviser's advice or your own research) make some of your own choices if you feel so.
Most folks, either don't feel comfortable and/or want to take the time to do their own "homework" and as such will follow what their adviser says. But that's your own choice. You don't sign a contract with that adviser saying that you'll follow what they say 100% of the time, since at the end of the day, it is YOUR money after all!!
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