Using a Financial Advisor after graduating pharmacy school?

[Elle928]

I am set to graduate this May with heavy student loans ( approximately $180,000 for both undergrad and pharmacy school). I was looking into trying to find a financial advisor who might be able to help me in terms of how to pay my loans off quickly and getting the most out of my taxes and deductions.

Does anyone have any experience with a FA, and find it worth it? Also how much do they charge for their services?

I am a complete finance noob so any advice is appreciated!

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[Amicable Angora]

I am set to graduate this May with heavy student loans ( approximately $180,000 for both undergrad and pharmacy school). I was looking into trying to find a financial advisor who might be able to help me in terms of how to pay my loans off quickly and getting the most out of my taxes and deductions.

Does anyone have any experience with a FA, and find it worth it? Also how much do they charge for their services?

I am a complete finance noob so any advice is appreciated!

It's probably a good idea to get a financial advisor, I would do it in your shoes.

 

[heybrother]

The doctor who runs http://whitecoatinvestor.com/ is a member of this forum and posts in the Finance section. A few hours browsing his website would be well spent. He can give you a lot to think about when it comes to the services of financial advisers, investing, insurance, and how high earning medically inclined folks get scammed by salesmen posing as advisers.

 

[Muse600]

why?

this is all you need to do:

1.) save up 6 months of living expenses - this is your emergency fund
2.) when you get your job, setup your 401k max out, deduct from your paycheck, and forget about it
3.) calculate your fixed expenses: rent, utilities (estimated), student loan payment, car payment, cell phone payment - auto pay this out of your checking account and forget about it
4.) setup a budget to include gas, food, clothes, household items, car registration/maintenance expenses, and recreation - do not overspend on these every month
5.) setup your student loans to auto-pay out of your checking account & forget about it

lastly - pay off your student loans "early" with this calculation:

Monthly Takehome income
-(fixed expenses such as rent, car payment, utilities, cell phone, etc.)
-(budgeted monthly expenses)
--------------------------------------------
Money Left over = early payment towards your student loans

If you have additional expenses that month (flights to see friends/family, going out over budget, unexpected car expenses, etc.) than that means you just make a smaller "early" payment towards your loans

That's it...in my opinion, there are no tricks & no financial secrets. Take the money you'd spend on a FA and put it towards your loans.

Whatever expenses you do pay (groceries, gas, clothes), buy with a credit card that gives you the most rewards. Pay that off every month automatically so you'll build credit to buy a house...combined with any auto loans and student loans, that's as good as you want to get to build credit.

do not buy individual stocks with a zecco, ameritrade, or schwab trading account...90% of the time you'll guess wrong and lose or the company stock stops growing and your money becomes stagnant.

and lastly - ideally with taxes, you want to get a zero tax return. If get a big return, then essentially the government is "borrowing" your money every paycheck (without paying interest to you), and giving it all back to you when you do your taxes. If you owe them, that means you're "borrowing" from them without interest...but it usually sucks to have to send them a check every year. So best case scenario? Fill out a W4 with the correct number of withhholdings to get the smallest value of a tax return possible.

 

[opinionfree]

Congratulations on your upcoming graduation. Such a seminal event in your life. I like where your head is, right now. This is what you should be thinking about, at this time, in your schooling. Money is coming to you very soon and you need to know how to handle it.

Let me ask a question. Your at the doctor's; he/she gives you a script. Would you go to the guy selling drugs from his trunk in the parking lot or to the pharmacy? I'll assume the later.

Trying to save by do things you're not educated in, leads to lower rates of return on most everything. Saving a few pennies here and there works, just not as efficiently, as many like to think. Even more so, if someone is honest enough to admit, they don't have a head for finances. Why would you even attempt it?
I did and do, continue to be successfully in managing my finances. (That isn't the norm)
Although I can't sing, dance or fix things, when they break. (I do try. I always wind up either embarrassing myself, or having to pay twice the price). See, it all balances out.

Do yourself a favor, save money and hire the professionals, you will need in life. With my first pay check, I hired an accountant, put a lawyer on retainer and I got a good insurance agent. They were what I needed. You may require different professionals, like a financial planner. Your going to be making good money and hopefully enjoying the life you are working to create. The homework and time spent trying to manage your finances, will serve you better from researching a good financial planner, making money at work and letting the professionals you hire, do THEIR jobs.

I'm guessing your a young lady. If so, enjoy graduation. Go a little crazy and spoil yourself. You worked hard to get here and will have (prayerfully so) a long and moderately satisfying career making piles of money. Boyfriend? Husband? Babies? Debt? Will all be part of your life, you'll never be free from any of them. Killing yourself with worry over them, at the beginning of your career, will only make for you a long, really miserable life of trying to satiate the never ending procession of life hurdles to happiness.

 

[pezdispenser]

why?

this is all you need to do:

1.) save up 6 months of living expenses - this is your emergency fund
2.) when you get your job, setup your 401k max out, deduct from your paycheck, and forget about it
3.) calculate your fixed expenses: rent, utilities (estimated), student loan payment, car payment, cell phone payment - auto pay this out of your checking account and forget about it
4.) setup a budget to include gas, food, clothes, household items, car registration/maintenance expenses, and recreation - do not overspend on these every month
5.) setup your student loans to auto-pay out of your checking account & forget about it
[...snip]

I pretty much agree with all of your points and in fact did those things myself, except I am a few years ahead of you. The encouraging thing is that if you keep up these strategies after you have paid off your loans, but instead plow your excess cash into investments, the investments start to seriously 'snowball' and grow very quickly. I'm in my 30s and my investments are over $500k. The returns are already close to exceeding my pharmacist salary, but I'm just going to keep adding to it and letting it snowball Oh, and no, I never had a financial advisor.

 

[Muse600]

yeah, doesn't seem worth it...

but then again, I've never consulted one...so I could be missing out on some great information

elle - go get one, and tell us what he says. Bring a copy of this thread with you

 

[xiphoid2010]

The major principles and action items are quite simple. You can do it on your own with a few lattes and afternoons at barns and noble. My wife and I are both pharmacists and even that much income we haven't needed one yet, and won't be until we have too much net positive cashflow that can't be tucked away in tax advantaged vehicles after student loans are paid off. A financial advisor usually run you a few thousand dollars (ps. hire one works for salary/fixed fee). I wouldn't start until you have your stuff squared away and have significantly more potential return on investment at stake than their pay.

 

[Muse600]

not sure if you're a 2nd generation...but just because you're a pharmacist don't be a high consuming low investment individual...

from millionaire next door:

VICTOR AND HIS CHILDREN

Take the case of Victor, a successful entrepreneur who is first-generation
American. Entrepreneurs like him have typically been characterized
by their thrift, low status, discipline, low consumption, risk, and
very hard work. But after these genetic wonders become financial successes,
then what? What do they teach their children? Do they encourage
them to follow Dad's lead? Do their children also become roofing
contractors, excavation contractors, scrap metal dealers, and so on?
The chances are they don't. Fewer than one in five do.

No, Victor wants his children to have a better life. He encourages
them to spend many years in college. Victor wants his children to
become physicians, lawyers, accountants, executives, and so on. But in
so encouraging them, Victor essentially discourages his children from
becoming entrepreneurs. He unknowingly encourages them to postpone
their entry into the labor market. And, of course, he encourages
them to reject his lifestyle of thrift and a self-imposed environment of
scarcity.

Victor wants his children to have a better life. But what exactly does Victor mean when he says that? He means that his children should be
well educated and have a much higher occupational status than he did.
Also, "better" means better artifacts: fine homes, new luxury automobiles,
quality clothing, club membership. But Victor has neglected to
include in this definition of better many of the elements that were the
foundation stones of his success. He does not realize that being well
educated has certain economic drawbacks.

Victor's well-educated adult children have learned that a high level
of consumption is expected of people who spend many years in college
and professional schools. Today his children are under accumulators of
wealth. They are the opposite of their father, the blue-collar, successful
business owner. His children have become Americanized. They are part
of the high-consuming, employment-postponing generation.

 

[Muse600]

today is my birthday - I turned 30. My old self would've said "I worked hard...it's my bday...I'm 4 hours from Vegas, let's go!"

that would've cost $80 in gas, and I would've dropped at least $500 in gambling...how about, nope? not going to be a high-consumer

 

[Muse600]

reading through the "frugality" chapter - most millionaires don't spend more than $399 on a suit, $140 on a pair of shoes, or $235 on a wristwatch

but the media influences us to think so - sure Magic Johnson spent $35,000 in one visit for shoes and Don King has spent $64,100 on a pair...but the media likes "touting abnormalities in buying behavior". The media & marketing firms want us to think the biggest reward for making a lot of money, is spending it. Why? so they can make more money for themselves!

forget them...live frugal..only buy the things you truly do want.

ever watch football? How do you score a lot of points - having a good offense. Making $$ as a pharmacist is a good offense. But how does a football team win the game? by preventing the other team from scoring - having a great defense. Being frugal and smart spending is having a great defense and the way of accruing wealth...so don't waste all your hard earned money as a pharmacist by spending all of it.

 

[Muse600]

more from millionaire next door...

here's 4 questions to answer:

1.) does your household operate on an annual budget?
2.) do you know how much your family spends each year for food, clothing, and shelter?
3.) do you have a clearly defined set of daily, monthly, annual, and lifetime goals?
4.) do you spend a lot of time planning your financial future?

Most millionaires answer "Yes" to all 4 of those questions, and for the 4th question - they actually spend a significant amount of MORE time than people that are under accumulators of wealth. Financial planning is how they become millionaires and stay millionaires...they are in strong control of their finances and don't need a financial adviser or CPA. It does take a lot of time, discipline, and effort...

Under accumulators of wealth (high income, low savings/net worth) are mostly the opposite. They have no idea how much they spend and are a slave to their payments. Their high consumption of wealth controls them...they're constantly in fear that their $200k+ income isn't enough...and they are the kind of people that need a strong guiding hand, with "experience" to tell them what to do with their money...and charge them a hefty fee for it.

As a matter of fact, what better people to target those financial advising services: high-income individuals that don't even know where their money is spent? Don't you think those people are the easiest to charge a high "financial advising" fee and actually get it?

 

[Muse600]

okay...I just called a "financial adviser"...and I don't think I talked to the right person...

I gave him my plan outlined in post #4 and he laughed at me...and told me I was on the right track.

He said his office only helps you pick bonds and mutual funds for long term returns (retirement or kids' college)...they don't do day trading, and if I was already maxing out my 401k and planned to contribute to a roth for 2014, there wasn't anything else he could do for me. He said if I wanted to do stock trading, he recommend that I just open an etrade account.

so...yeah...I still don't think it's worth it.