Do You Hire a Financial Advisor?

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
BrightLight

BrightLight

Full Member
10+ Year Member
Joined
Nov 5, 2010
Messages
296
Reaction score
9
A pharmacist recommends me to get one. The reasons are that I have a great amount of student loans, I pay a lot of taxes and a good advisor can help me with tax deductions, and a financial advisor can help me get the most out of my investments. Just want to see how many of you have a personal financial advisor and whether you think one is necessary.
Members don't see this ad.
 
No I don't have one. But I'll be yours for free right here.

Get an emergency fund of 6 months of expenses.
Max out 403b/401k to the tune of $17,000/year (2012 limits). It will be your biggest and possibly only tax write-off.
Invest in low cost funds (index funds are good).
Invest at least Age-10 (if not Age in bonds) in fixed income/bonds. (For example, at age 25 you would have between 15%-25% in bonds. The rest in stocks.
Diversify your equity holdings between domestic and international (at least 33% of your equities should be in international)
Rebalance annually
A simple portfolio at age 25 would be 20% bonds, 80% stocks (67% domestic, 33% international). Increase bond percentage as you age.
Live modestly
Only buy a house when you can pay 20% down with a 30 year fixed mortgage.
Buy a car with cash or if you must a maximum of a 36 month loan.

My stock pick of the week.
Ford and GM. Seriously. With a target of $20 for F and $40 for GM.

You're welcome, and it was free.
 
And about tax write-offs for highly compensated W2 employees...

We just don't have them. Pre-tax deferral to 401k/403b plans and HSA (health savings accounts) are the the big ones.

We make too much for student loan interest deduction.

You will able to itemize if you live in a high tax state as your local/state income tax may be greater than standard deduction.

If you own a house you will be able to deduct mortgage interest and property taxes (BUT A TAX WRITE-OFF IS NOT AN END ALL BE ALL, so don't go buy a house for a deduction).

There's no fancy deductions. Trust me, if there was I would be all over it.

Long term capital gains taxes are only 15% (instead of our marginal bracket of 28%) so if you own stocks (like GM and F that I mentioned) for over a year upon the sale you will only have to pay 15% taxes.

Also taxes change. From year to year. We may just get a flax tax or 9-9-9.
 
Members don't see this ad :)
Priority numero uno: PAY OFF THE STUDENT LOANS.
 
We have one. My husband found him through some Dave Ramsey sponsored referral service. He helped us set up stuff like our son's college fund, and Roth IRAs. He helped me figure out what to do with a retirement account I had from my previous career that was just stagnating. He doesn't do our taxes. Some people hire an accountant or tax adviser for that, but we just take care of them ourselves.
 
If you don't have time/knowledge to dedicate to going over finances, hire one every few years (or after a major life/income event) to review your financial situation and set you straight. Make sure they're independent and not tied to any commissions.

Otherwise I think an active financial planner is unnecessary, but my bias is I have experience in this area, so someone with no knowledge may think it's the greatest thing since sliced bread.
 
I had one in WV. Dude seemed to steer me right, but I'm not able to see him face to face. I need to get one in Philly, I guess. Put that on my to do list.
 
confettiflyer said:
disagree for a variety of reasons, but it's definitely a top 3-4 priority.
Click to expand...

Student loan pay back is actually a pretty good deal right now.

6.8% non-tax deductible interest of the student loans is a complete rip-off. I just got my wife a 3 year old car, and the interest on that is only 2.9%. I can get a 30 year fix mortgage for 4% and that's tax deductible. I can almost sit on the latter 2 loans and just let inflation eat away at it. :rolleyes:

mean while, a diversified investment portfolio will probably return ~7% or less, minus any expense ratio. 7% is not for sure, but the 6.8% (or high if you have plus or private loans) you get for paying off student loan is guaranteed.

I would say after you put in enough to get your company 401k match and have a 6 month emergency fund, it's awash for putting the left over money towards student loan or more investment.
 
xiphoid2010 said:
Student loan pay back is actually a pretty good deal right now.
Click to expand...

I was alluding to having an emergency fund and paying off credit card debt (don't know the OP's current status). Once those are taken, then yes 6.8% interest debt should be taken care of, hence a top 3 priority.

One of my prior undergrad loans is at ~2.8%....i think i'll let that one ride for a little while :cool:
 
awval999 said:
No I don't have one. But I'll be yours for free right here.
Click to expand...
Probably not the smartest thing to say for legal reasons. And my response to Ford and GM as stock picks? Caveat emptor.

That aside, a lot of what you should and should not do depends on your personal goals. It is all about opportunity costs and how you subjectively determine value. Flatout prescriptions like "pay off student debt" or "do a then b then c" isn't going to be optimal for everyone.

Even the act of hiring a financial adviser is a matter of opportunity costs and incentives. You have to decide whether or not you trust the person, think they can do a better job than you can, and will give you a net positive return as opposed to had you not hired him/her (and the return doesn't necessarily have to be just financial- time, stress, etc. all contain value or negative value and impact that decision).
 
Members don't see this ad :)
PharmEcon said:
Probably not the smartest thing to say for legal reasons. And my response to Ford and GM as stock picks? Caveat emptor.

That aside, a lot of what you should and should not do depends on your personal goals. It is all about opportunity costs and how you subjectively determine value. Flatout prescriptions like "pay off student debt" or "do a then b then c" isn't going to be optimal for everyone.

Even the act of hiring a financial adviser is a matter of opportunity costs and incentives. You have to decide whether or not you trust the person, think they can do a better job than you can, and will give you a net positive return as opposed to had you not hired him/her (and the return doesn't necessarily have to be just financial- time, stress, etc. all contain value or negative value and impact that decision).
Click to expand...

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances

Please do not quote legalese that you have no idea about. FINRA laws apply only to people who charge for services or sell securities.

Please don't disparage my stock picks with nothingness.

Do you have any idea how rude your comments are? I will atribute them to you being a pre-pharm.
 
Personal finance is not rocket science. Pharmacists do not need financial advisors. However, like anything in life, if one does not understand such topics then it may be worthwhile. I don't know how to change my oil, so I pay someone.

I was attempting to simplify stressful topics. There are no magical writeoffs on your taxes. Do not overpay a CPA to do a simple tax return. There are no magical hedge funds that only an "Investment Advisor" can steer you towards.

Of course I get attacked by a pre-pharm, probably brushing up on his JD. *rolls eyes*
 
awval999 said:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances

Please do not quote legalese that you have no idea about. FINRA laws apply only to people who charge for services or sell securities.
Click to expand...
Not sure why you are quoting the first amendment here, but FINRA laws don't matter if the guy does exactly what you say and then comes back to sue you when he is bankrupt, does it? You saying you are acting as his financial adviser doesn't help, but it can potentially hurt even if you are going to win the case. It can especially get messy in some states with stricter laws.

awval999 said:
Please don't disparage my stock picks with nothingness.
Click to expand...
So you can have an opinion, but I can't? Wait a couple months, see where the EU goes and where BAC goes and then talk to me. We both have opinions, I'm not sure why you see me disagreeing with you as disparaging. I never said that.

awval999 said:
Do you have any idea how rude your comments are? I will atribute them to you being a pre-pharm.
Click to expand...
I am not trying to be rude here. If anything, I think your prejudice towards pre-pharms in this comment is "rude". For all you know Lloyd Blankfein could decide to do pharmacy tomorrow and he would be a pre-pharm too. He's easily regarded as a more knowledgeable source than you or I on these topics.

awval999 said:
Personal finance is not rocket science. Pharmacists do not need financial advisors. However, like anything in life, if one does not understand such topics then it may be worthwhile. I don't know how to change my oil, so I pay someone.
Click to expand...
Even if you are good at it or know what it is about, that doesn't necessarily mean it is in your best interest not to hire a person to do it. You have to think of opportunity costs.

awval999 said:
Of course I get attacked by a pre-pharm, probably brushing up on his JD. *rolls eyes*
Click to expand...
I really don't see how you think I "attacked" you. I disagree with you respectfully. There is a HUGE difference.
 
Last edited:
PharmEcon said:
Not sure why you are quoting the first amendment here, but FINRA laws don't matter if the guy does exactly what you say and then comes back to sue you when he is bankrupt, does it? You saying you are acting as his financial adviser doesn't help, but it can potentially hurt even if you are going to win the case. It can especially get messy in some states with stricter laws.
Click to expand...

Stop worring about laws that don't exist.

I do not have a fiduciary responsiblity to anonymous posters on a message board. To be sued one must have fiduciary responsiblity.

No, it can't get messy. And no, there are no laws to with what you describe.
 
awval999 said:
Stop worring about laws that don't exist.

I do not have a fiduciary responsiblity to anonymous posters on a message board. To be sued one must have fiduciary responsiblity.

No, it can't get messy. And no, there are no laws to with what you describe.
Click to expand...

To each his own. Do what you want, I was giving you friendly advice.
 
awval999 said:
Stop worring about laws that don't exist.

I do not have a fiduciary responsiblity to anonymous posters on a message board. To be sued one must have fiduciary responsiblity.

No, it can't get messy. And no, there are no laws to with what you describe.
Click to expand...
OMG! He said "fiduciary". :laugh:
 
awval999 said:
I don't mean to be mean. :)

What are some good stocks you like?
Click to expand...
Neither do I- the semantics might just be off as it is near 2AM and I'm tired :p

As for stocks... personally more of an ETF guy than equities, especially right now. I think inverse dow/s&p are good plays although we might see one more week of gains. Eventually though I think the dow will go back down to ~11k at least as BAC continues to face capitalization problems and PIIGS continue to face financing issues bringing down the EU. If I had to go equities, then I somewhat like Chesapeake Energy.

edit: Oh, also I'd short LNKD- I think that is way overpriced right now, kind of bringing back images from the first bubble
 
man this thread took a ****

it's like seeing two cats claw at each other
 
For those of you that say to save up a 6 month emergency fund, where do you keep that money? Just in a general savings account or put it in something that might make some interest?
 
museabuse said:
For those of you that say to save up a 6 month emergency fund, where do you keep that money? Just in a general savings account or put it in something that might make some interest?
Click to expand...

I have some in savings bonds and some in CDs. Right now, regular savings accounts aren't paying squat.
 
museabuse said:
For those of you that say to save up a 6 month emergency fund, where do you keep that money? Just in a general savings account or put it in something that might make some interest?
Click to expand...

We have ours in an online savings account that earns a little better interest than our savings accounts at the local bank. It doesn't earn a lot of interest but it is quickly accessible, which is important.
 
All4MyDaughter said:
We have ours in an online savings account that earns a little better interest than our savings accounts at the local bank. It doesn't earn a lot of interest but it is quickly accessible, which is important.
Click to expand...

That's wise for you, because you have a child. Because I don't, I feel that the extra interest makes up for not having immediate accessibility. And it sure was nice to know it was available when I had my extended unemployment. I actually never had to tap into it except when one CD came due, and it was enough money to pay off my house so I decided to do it. :cool:

I'm back to renting right now, and for the time being have no desire to buy property. I do miss the ability to plant a garden (I do have a yard but am not allowed to dig any of it up) but will look into a community garden next spring.
 
awval999 said:
No I don't have one. But I'll be yours for free right here.

Get an emergency fund of 6 months of expenses.
Max out 403b/401k to the tune of $17,000/year (2012 limits). It will be your biggest and possibly only tax write-off.
Invest in low cost funds (index funds are good).
Invest at least Age-10 (if not Age in bonds) in fixed income/bonds. (For example, at age 25 you would have between 15%-25% in bonds. The rest in stocks.
Diversify your equity holdings between domestic and international (at least 33% of your equities should be in international)
Rebalance annually
A simple portfolio at age 25 would be 20% bonds, 80% stocks (67% domestic, 33% international). Increase bond percentage as you age.
Live modestly
Only buy a house when you can pay 20% down with a 30 year fixed mortgage.
Buy a car with cash or if you must a maximum of a 36 month loan.

My stock pick of the week.
Ford and GM. Seriously. With a target of $20 for F and $40 for GM.

You're welcome, and it was free.
Click to expand...

another dave ramsey disciple :thumbup:
 
GodsSon2011 said:
another dave ramsey disciple :thumbup:
Click to expand...

Ramsey doesn't believe in bonds. So I disagree there. He also likes active mutual fund management. I'm mehh to that. Some active funds are good.

Ramsey has good debt management comments. Even to a point of excessive though.

Also, my rock is the BIGGEST! :)
 
"Blue Horseshoe loves Anacott Steel."

But seriously, with the stock market the way it is now and next year, a mutual fund has as much chance to lose you money as it does making money.

I would suggest any student loan over 6% you pay off first before you "invest" (zombie buy and hold) in wall street. I wouldnt really invest extra money, outside of a 401k, until the Europe mess is figured out and we have a clearer picture of the direction the US and China are headed.

Or could trade stocks and make money with all this great volatility. But its pretty much like a second job so you need a lot of time.

Or you could just wait 5-10 years for the massive inflation wave and pay everything off then.
 
museabuse said:
For those of you that say to save up a 6 month emergency fund, where do you keep that money? Just in a general savings account or put it in something that might make some interest?
Click to expand...

Some in money market at Fidelity, and some in my Roth IRA. Yes, your principle in Roth IRA can be withdrawn at anytime without penalty, so it can double as a back up emergency fund.
 
You must log in or register to reply here.
Next unread thread

Similar threads

C
Financial Independence Thread
2 3 4 5
Replies
235
Views
11K
RN2RPh
RN2RPh
mentos
2021 new hire overnight pharmacist salaries
Replies
39
Views
7K
Sparda29
Sparda29
R
Hired sight unseen
Replies
32
Views
4K
BidingMyTime
BidingMyTime
makeawish
Contract to hire job
Replies
4
Views
1K
Hels2007
Hels2007
A
CVS plans massive hiring surge
2
Replies
70
Views
7K
VA77
VA77
Top