Question about financial advisors- am I getting ripped off?

[crossurfingers]

I'm a new pharmacist- been working now for about 3 months. I took people's advice here and looked for a financial advisor regarding what to do with all this new income and what to expect with my taxes next year and so on.

I went to this guy today for just the initial consultation, which was free. He gave me a lot of good info and it lasted for an hour. He said for the next meeting he would look into my company's 401k plan for me and pick out which option I should choose and also he would calculate my estimated taxes for next year so I know ahead of time if I'm going to end up paying a lot or not. He's also going to come up with some numbers regarding my student loans. He said he charges $165/hour and that it would probably take him 4 or 5 hours to prepare all my stuff. That adds up to like $825 at the most.

This is my first year out in the real world and I just wanted some input as to what I should be doing and what to expect with taxes and what not. He's going to give me a detailed plan (he did ask me to write down all my expenses each month), but I'm not sure if this is entirely worth it or if he's ripping me off.

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[tellsarah]

This advisor is providing a great service, however he is doing nothing that a competent person can do themselves with some research. He is charging more than practicing attorneys in some areas. What are his credentials? Do you think he is worth $165hr?

 

[acetyl]

This is my first year out in the real world and I just wanted some input as to what I should be doing and what to expect with taxes and what not. He's going to give me a detailed plan (he did ask me to write down all my expenses each month), but I'm not sure if this is entirely worth it or if he's ripping me off.

I'll do it for $500 and it'll be really simple. Max out your 401K and don't spend money. Put all your savings in a mix of interest bearing accounts. Work for at least 30 years full-time, then when it comes time to retire, you can send me that $500.

 

[Old Timer]

Make sure the guy is a certified financial planner. Make sure he is licensed in the sate you are in. If you are getting a financial planner, it's better to pay fee for service than someone who is selling you something they make a commission on.

If you spend the $800.00 and see what he did and how he did it, you can learn enough to start doing it on your own. If your not sure, it's not a crime to go with an expert.

What you invest in depends on the level of risk you are going to take. Are you willing to take more risk for aggressive growth? What about stock options and ESP plans. There is a great deal to consider.

Also get three references and check them out. How did you find this guy?

 

[psychoandy]

Eh. I had a financial consult with Ameriprise and they were looking to charge me 400 or so for all of that, except at a flat rate; granted as i'm still in school and only work part time it's not as difficult since i'm in a low tax bracket and don't have as many assets as you prob do.

Also where do you live? Not that geographical location determines a financial planner's skill and prowess but I wouldn't pay some dude 800 bucks to spend a couple hours looking over my financial situation if I lived in a rural area. Maybe in NYC...maybe.

I bet you 50 bucks that re: financial advice, they're just going to tell you to have a diversified portfolio with appropriate asset allocation (which I don't necessarily agree with especially since you're prob under 30). Oh yeah, and that you should buy some mutual funds that they get commission on.

 

[genesis09]

Do you live near a Fidelity office? Most of the time, they will talk to you for free.

 

[acetyl]

Eh. I had a financial consult with Ameriprise and they were looking to charge me 400 or so for all of that, except at a flat rate; granted as i'm still in school and only work part time it's not as difficult since i'm in a low tax bracket and don't have as many assets as you prob do.

Also where do you live? Not that geographical location determines a financial planner's skill and prowess but I wouldn't pay some dude 800 bucks to spend a couple hours looking over my financial situation if I lived in a rural area. Maybe in NYC...maybe.

I bet you 50 bucks that re: financial advice, they're just going to tell you to have a diversified portfolio with appropriate asset allocation (which I don't necessarily agree with especially since you're prob under 30). Oh yeah, and that you should buy some mutual funds that they get commission on.

Or....you could save up $100K...then give it to PsycoAndy, with $100K on margin, and let him bank you 30% in 40 days.

 

[PharmApp2008]

You would be better off going with a brokerage company like Raymond James. They will give you financial advise for free and you pay a maintenance fee on the account every year (around $50 I think). You pay a commission when you buy or sell but you would have to do that anyway. There are places where you can invest with your own advise for cheaper. Mutual fund companies or index funds.

 

[Fuzzychickens]

Or....you could save up $100K...then give it to PsycoAndy, with $100K on margin, and let him bank you 30% in 40 days.

Where is this PsycoAndy and how can I give 100k to invest? Going off his name alone, it must be a sure bet...lol.

 

[Smiling Moon]

If I had any money, I'd put it on Psychoandy.

 

[psychoandy]

Or....you could save up $100K...then give it to PsycoAndy, with $100K on margin, and let him bank you 30% in 40 days.

If you factor in the fact that I also used in addition to the 100k another 100k in margin, it's only 15%

You would be better off going with a brokerage company like Raymond James. They will give you financial advise for free and you pay a maintenance fee on the account every year (around $50 I think). You pay a commission when you buy or sell but you would have to do that anyway. There are places where you can invest with your own advise for cheaper. Mutual fund companies or index funds.

Not a bad idea at all. RayJay isn't bad, it's just that they might not give you tax advice and other non-stock related info/advice.

 

[RogerWilco]

do a roth ira if you can
max out your 401k
buy a subscription to money or kiplingers or both and read

 

[amartins02]

I used to work for Metlife handling mutual fund trading. Here is my 2 cents. Max out your 401 k and put it in 40% growth funds, 40% large cap and 20% medium cap funds. If you don't see it in your check you won't miss it. Check the performance every 3 months and reallocate if necessary. Also make sure you have an emergency "Go to hell fund" that covers 3-6 months of pay. You know...the tell your boss to go to hell fund. Then take 10% (if you can afford it) of your net pay and put it into stock brokerage account. This is your "risk" investment. Trade it as you see fit AFTER reading some good books on investing. Be smart and trade what you know because you are a good gauge especially if you use the companies products. Lastly, pay yourself a little bit every week to do whatever you want with. Obviously do it within reason in comparison to your other bills, budgets and obligations.

Oh and I'm not responsible if you lose your money. Cheers

 

[HappyRph]

Nobody cares more about your money than yourself. If you're telling anyone that you don't know what to do with your money there are plenty of people that will take advantage of your money. What your "financial guy" charging you is ridiculous. What is his credential? Can he show you his actual investment result in the past 5/10 years? There are MANY so called "financial planner" out there who are nothing more than a mutual fund salesperson. With you being so young just out of school I would say you need to max out your 401k (currently $15500/year) regardless of your employer's matching because by doing so you're preventing Uncle Sam from taxing/stealing your hard earned money (at least for now until you retire and start withdrawing the money). Buy a house immediately to further save more taxes. If you can afford, get a fourplex. Live in one and rent the other 3 units out. That way you have your tenants paying for your mortgage. Continue working and buying rental properties. Have property management company to take care of your rental units so that way you can still concentrate at your pharmacy work and have a life. Follow this advise and I guarantee you'll be a millionaire in no time and can retire early!