Financial Planners

[HalO'Thane]

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For all of you attendings out there: How many of you use a financial planner? I am 2 years out from fellowship and consider myself fairly financially savvy and do a pretty good job of living below my means. However, I have been wondering about the efficacy of using a financial planner to help manage my money better. Most of the ones I hear about charge a certain percentage of one's income. I am not sure if their advice would yeild me a great enough yeild to even offset these fees. I also don't know how trustworthy these "experts" really are. I have sat in on a few financial planning meetings through our hospital and have never been overly impressed but I just wanted to make sure I wasn't missing anything.

 

[sevoflurane]

They should never charge a percentage of your income.
A percentage of invested funds is more like it.
I've gone through 3-4 of them.... Weeded out the players and am content with my current guy. No BS. All business.

Once I had >200k in investments, I felt that having someone around to help was worth it. Fees and % do add up.
Some places erase all fees once you have 1 million invested with them.

 

[deleted126335]

For all of you attendings out there: How many of you use a financial planner? I am 2 years out from fellowship and consider myself fairly financially savvy and do a pretty good job of living below my means. However, I have been wondering about the efficacy of using a financial planner to help manage my money better. Most of the ones I hear about charge a certain percentage of one's income. I am not sure if their advice would yeild me a great enough yeild to even offset these fees. I also don't know how trustworthy these "experts" really are. I have sat in on a few financial planning meetings through our hospital and have never been overly impressed but I just wanted to make sure I wasn't missing anything.

Nobody charges as a percentage of income. Many charge as a percentage of assets under management (with a minimum fee). Some charge straight hourly rate. Some will do a one time review/assesment and make recommendations for a one time fee.
Avoid planners who get a commission from what they sell. (often insurance products. These parasites often have letters like CLU and ChFC after their name)

Every doctor has the brains to do this himself. Not having the interest to spend the time, or willingness to approach this as an academic discipline worthy of serious study or the stomach to execute is where most fail.

 

[BLADEMDA]

For all of you attendings out there: How many of you use a financial planner? I am 2 years out from fellowship and consider myself fairly financially savvy and do a pretty good job of living below my means. However, I have been wondering about the efficacy of using a financial planner to help manage my money better. Most of the ones I hear about charge a certain percentage of one's income. I am not sure if their advice would yeild me a great enough yeild to even offset these fees. I also don't know how trustworthy these "experts" really are. I have sat in on a few financial planning meetings through our hospital and have never been overly impressed but I just wanted to make sure I wasn't missing anything.

Doze is the man. If you are willing to invest 30-50 hours of your time learning the basics about investing, planning, insurance, etc then you could skip the financial planner. However, you will need to stay focused and on course in an investment plan.

Planners make money by charging for money under management, hourly advice fees and selling you funds, insurance etc. At your stage be careful about excessive fees and expensive front loaded mutual funds.

First thing is build up Jet's F U fund. Get term life insurance. Get disability insurance. Maximum funding to pretax retirement accounts. Pay down/off expensive debt over 5-6 percent interest rates. Live below your means.

Then and only then are you ready to invest in after tax accounts. Doze can hook you up with several good sites about low cost investing.

 

[sevoflurane]

This....

Every doctor has the brains to do this himself. Not having the interest to spend the time, or willingness to approach this as an academic discipline worthy of serious study or the stomach to execute is where most fail.

and this...

Doze is the man. If you are willing to invest 30-50 hours of your time learning the basics about investing, planning, insurance, etc then you could skip the financial planner. However, you will need to stay focused and on course in an investment plan.
....
First thing is build up Jet's F U fund. Get term life insurance. Get disability insurance. Maximum funding to pretax retirement accounts. Pay down/off expensive debt over 5-6 percent interest rates. Live below your means.

great advice.

 

[pgg]

The expenses related to your investments are one of a bare handful of things you have absolute control over. Don't let yourself get soaked by fees.

Hourly or flat fee is all I would consider.

 

[Deanmonster]

Doze is the man. If you are willing to invest 30-50 hours of your time learning the basics about investing, planning, insurance, etc then you could skip the financial planner. However, you will need to stay focused and on course in an investment plan.

Planners make money by charging for money under management, hourly advice fees and selling you funds, insurance etc. At your stage be careful about excessive fees and expensive front loaded mutual funds.

First thing is build up Jet's F U fund. Get term life insurance. Get disability insurance. Maximum funding to pretax retirement accounts. Pay down/off expensive debt over 5-6 percent interest rates. Live below your means.

Then and only then are you ready to invest in after tax accounts. Doze can hook you up with several good sites about low cost investing.

At what point do you consider yourself self-insured regarding life insurance / disability insurance? 500k, 1m, 2m?

 

[pgg]

At what point do you consider yourself self-insured regarding life insurance / disability insurance? 500k, 1m, 2m?

For life insurance, drop the term policy when the people who depend on you wouldn't suffer a catastrophically degraded standard of living if you got hit by a bus and all your expected future income evaporated.

Disability - when you reach the point when you can say, "if I retired tomorrow, that'd be OK."

JMHO.

 

[W222]

Just curious and I realize this is an extremely vague question, but what do the experienced guys here see as "living beyond your means"? What do most docs waste their money on? I have friends in other fields who piss money away on expensive cars, watches, ect.


A follow up question but what do you see as a reasonable first home mortgage? My wife and I are preparing to buy our first home. We have been renters forever and want to buy. We plan on staying in this house long-term and I have a nice stable job lined up.

 

[Monty Python]

When I started making serious money in the mid-1990s (luckily before the dot-com bust) I spent several weekends reading everything I could get my hands on regarding investing, money mangement, etc. Also compared and contrasted philosophies espoused in Forbes, The Economist (UK publication), and a few books. I took the passive lazy person's approach, and started sending monthly checks to Vanguard splitting my money between several different funds with different foci and objectives. I took advantage of their low overhead fees, dollar-cost averaging, and great customer service. My wife and I also live comfortably, but definitely not materialistically. I do not play Keep Up With The Jonses.

That philosophy has put me where I am today: I could quit working right now if I wanted, and live off the interest and maybe 2-3% annual withdrawl of my principal. That has me freed up to pursue additional education as a fulltime MBA student without worrying about paying the bills. Mind you, I worked my a@@ off between 1995 and last year, moonlighting a lot as well.

I personally don't think active management of your money can beat what a large passive approach, through Fidelity, Vanguard, USAA, etc, could accomplish. You must keep an eye on your portfolio, making periodic adjustments, but I just don't think it's worth the hassle to pursue any other method.

Just my opinion.

 

[W222]

Can anyone recommend a few good books on investing and/or personal finance?

 

[2013anes]

Can anyone recommend a few good books on investing and/or personal finance?

I read this in high school and loved it. I would read it again (even though the title says that it is for teens), and I have passed it around to a couple of friends to read.

Motley Fool Investment Guide for Teens

http://www.amazon.com/Motley-Fool-I...&sr=1-2&keywords=motley+fool+investment+guide

 

[D P356]

There is a Emergency Doc on sdn with the name ActiveDutyMD.

He runs a website concerning these matters.

whitecoatinvestor.com

His site has a lot of info concerning debt, insurance, financial planners, etc.
Pretty good info, and you can search all he has written about on his site.

 

[pgg]

Can anyone recommend a few good books on investing and/or personal finance?

Ferri's All About Asset Allocation
bogleheads.org Wiki and forums

 

[HalO'Thane]

When I started making serious money in the mid-1990s (luckily before the dot-com bust) I spent several weekends reading everything I could get my hands on regarding investing, money mangement, etc. Also compared and contrasted philosophies espoused in Forbes, The Economist (UK publication), and a few books. I took the passive lazy person's approach, and started sending monthly checks to Vanguard splitting my money between several different funds with different foci and objectives. I took advantage of their low overhead fees, dollar-cost averaging, and great customer service. My wife and I also live comfortably, but definitely not materialistically. I do not play Keep Up With The Jonses.

That philosophy has put me where I am today: I could quit working right now if I wanted, and live off the interest and maybe 2-3% annual withdrawl of my principal. That has me freed up to pursue additional education as a fulltime MBA student without worrying about paying the bills. Mind you, I worked my a@@ off between 1995 and last year, moonlighting a lot as well.

I personally don't think active management of your money can beat what a large passive approach, through Fidelity, Vanguard, USAA, etc, could accomplish. You must keep an eye on your portfolio, making periodic adjustments, but I just don't think it's worth the hassle to pursue any other method.

Just my opinion.

That is reassuring to hear since I've been using Vanguard to invest outside of my retirement account with a mix of balanced funds and tax free bond funds. Do you think it is safe to use only one company (such as Vanguard) and take advantage of their many different types of funds; or should I spread it out over multiple companies? There doesn't seem to be a lot of differences between these big companies and the funds they offer except that Vanguard tends to have the lowest expenses, which I like.

As far as books...I'm a complete neophyte on these matters compared to some of the other doctors on this thread but I was pretty happy with "Personal Finance For Dummies" as a good starting out point.

 

[BLADEMDA]

That is reassuring to hear since I've been using Vanguard to invest outside of my retirement account with a mix of balanced funds and tax free bond funds. Do you think it is safe to use only one company (such as Vanguard) and take advantage of their many different types of funds; or should I spread it out over multiple companies? There doesn't seem to be a lot of differences between these big companies and the funds they offer except that Vanguard tends to have the lowest expenses, which I like.

As far as books...I'm a complete neophyte on these matters compared to some of the other doctors on this thread but I was pretty happy with "Personal Finance For Dummies" as a good starting out point.

Vanguard is a great company to invest with. I have accounds with TD Ameritrade, Fidelity,
Vanguard, E-trade, etc and I really like Vanguard for its simplicity.

Vanguard isn't for active traders as the software lags behind the others significantly. But, for long term ETF investing, Mutual Funds and bond Funds Vanguard is hard to beat.

I like being able to pick active management for my Bond Funds (e.g. PIMCO, Fidelity, Loomis Sayles) and purchase Emerging Market or Foreign Funds so an account at TD Ameritrade or Fidelity allowed such purchases (not to mention active trading).

For after tax money remember tax efficiency matters in the long run so stick with ETF, Index Funds or low turnover funds on that money. 401K/IRA money allows the investor to get more aggressive with taxable bond funds and foreign equity funds.

 

[OUAnesthesia]

Anyone wit experience with investing with USAA?