Financial advisor/planner? where to start

[Anonymous]

Until recently, our financial choices were not that complicated. We were getting by okay, but after paying our mortgage and daycare, were just saving some in our 401Ks (but not maxing out), had a small emergency fund. No college savings for our kids or other investments.

Our financial picture has changed. Due to promotions and a job change, we are now earning about 2X what we we earning about 5 years ago. We are now maxing out our 401Ks, recently paid off a HELOC, but other than that, haven't done anything investment-wise. We have no budget.

Our stats:

HHI 400K
Age 42/43
Kids age 9 & 6
401Ks (combined) about $300K
Roughly 20% equity in our $560K house
About $25K cash savings
No debt other than mortgage

I want to start saving for kids' college; make sure we have enough (and the right kinds of) insurance; are doing things in a tax-advantaged way (considering that I foresee our Fed & Md taxes rising in coming years). For a while now, I've felt like I'm perfectly capable of educating myself on this and then following through - except that it just never gets done. I'm thinking a financial planner might help us set some goals and a plan. I think we are capable of following through on it.

Advice? Any recs for this kind of planner/advisor?

[Anonymous]

Moneyplans in Silver Spring is good. It's definitely worth it to get advice as to insurance and investments, and then, maybe you can manage it without help.

[Anonymous]

I was just coming here to ask if anyone had experience with Learnvest, and this seems like it might be a fair place to ask the question.

Learnvest recs, anyone?

[Anonymous]

I'm envious. I make $190K at 32. I dream of $400K.

[Anonymous]

Anonymous wrote:I'm envious. I make $190K at 32. I dream of $400K. [/quote

1. Assuming they both work, you make essentially the same and are 10 years younger
2. Making 190k at 32 is ridiculous. I made essentially that when I was 32 and it was ridiculous then, and that was before we went through the biggest economic upheaval in 60 years.
3. It boggles the mind that you would be envious of anybody. You should be thanking your lucky stars, saving a crapload and being generous to everyone who crosses your path.

[Anonymous]

Anonymous wrote:
1. Assuming they both work, you make essentially the same and are 10 years younger
2. Making 190k at 32 is ridiculous. I made essentially that when I was 32 and it was ridiculous then, and that was before we went through the biggest economic upheaval in 60 years.
3. It boggles the mind that you would be envious of anybody. You should be thanking your lucky stars, saving a crapload and being generous to everyone who crosses your path.

Yea but my wife doesnt make $200K. Not even close. And never will. And $190K isnt that much at 32. Most of my friends are north of that, $230, $240, $250 - and some are not even 30 yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
1. Assuming they both work, you make essentially the same and are 10 years younger
2. Making 190k at 32 is ridiculous. I made essentially that when I was 32 and it was ridiculous then, and that was before we went through the biggest economic upheaval in 60 years.
3. It boggles the mind that you would be envious of anybody. You should be thanking your lucky stars, saving a crapload and being generous to everyone who crosses your path.

Yea but my wife doesnt make $200K. Not even close. And never will. And $190K isnt that much at 32. Most of my friends are north of that, $230, $240, $250 - and some are not even 30 yet.

I would get new friends. Maybe from a soup kitchen. Seriously, you sound like a narcissistic d-bag.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
1. Assuming they both work, you make essentially the same and are 10 years younger
2. Making 190k at 32 is ridiculous. I made essentially that when I was 32 and it was ridiculous then, and that was before we went through the biggest economic upheaval in 60 years.
3. It boggles the mind that you would be envious of anybody. You should be thanking your lucky stars, saving a crapload and being generous to everyone who crosses your path.

Yea but my wife doesnt make $200K. Not even close. And never will. And $190K isnt that much at 32. Most of my friends are north of that, $230, $240, $250 - and some are not even 30 yet.

I would get new friends. Maybe from a soup kitchen. Seriously, you sound like a narcissistic d-bag.

Oh I am.

[Anonymous]

There seems to be a large variance among folks on how much money one actually needs to earn. Basing your needs on how much your friends make doesn't seem like a good place to start. I don't know how much my friends make with the exception of the Feds since I know their gs level.

I just find it interesting. My husband and I combined make less than the guy who makes $190k. We max out one 401k and an IRA. We are doing a two year pre paid university plan for our two kids and we make extra mortgage payments every year. I feel like we eat out a lot. We do have fairly cheap vacations since we tend to crash at family and friends vacation houses, but I really don't feel like we are ever stressed for cash. Not even when our hot water heater broke.

What kinds of expenses do people have that they make such large amounts and can't achieve adequate savings and lifestyles? The only thing I can think of is if someone has an especially demanding job requiring a nanny and overtime pay. I just use a daycare center, but even we have a cleaning lady. Perspective people!

[Anonymous]

We have a similar story to OP, except we were in somewhat dire financial straits three years ago and due to job switches for both of us, are in a startlingly better position now. We started this process last fall with Morgan Stanley in Bethesda. Some things we've done:
- refinanced twice, once to get two loans into one and then to reduce the rate on that loan;
- got Maryland College Investment Plans with T. Rowe Price started for both kids - put a big chunk in for each and set up automatic monthly contributions;
- rolled over old 401Ks into IRAs;
- started new 401K at new firm;
- moved our brokerage account to them from my husband's college friend whose wife is divorcing him because he suddenly started smoking a lot of weed, daily;
- met with an estate planner to finally get wills in place

Still need to do - increase life insurance

I might be forgetting something but that is a good start. There is an initial consultation fee and they take a very small percentage of the assets under management, both if which we have felt were very, very well worth it.

[Anonymous]

Anonymous wrote:We have a similar story to OP, except we were in somewhat dire financial straits three years ago and due to job switches for both of us, are in a startlingly better position now. We started this process last fall with Morgan Stanley in Bethesda. Some things we've done:
- refinanced twice, once to get two loans into one and then to reduce the rate on that loan;
- got Maryland College Investment Plans with T. Rowe Price started for both kids - put a big chunk in for each and set up automatic monthly contributions;
- rolled over old 401Ks into IRAs;
- started new 401K at new firm;
- moved our brokerage account to them from my husband's college friend whose wife is divorcing him because he suddenly started smoking a lot of weed, daily;
- met with an estate planner to finally get wills in place

Still need to do - increase life insurance

I might be forgetting something but that is a good start. There is an initial consultation fee and they take a very small percentage of the assets under management, both if which we have felt were very, very well worth it.

Cue dark clouds

How you know your financial planner isn't working for you/

Is he compensated on trades rather than growth?
Does he actively meet with you annually to review your personalized goals?
Is he balancing your portfolio?
Does his ex wife tell you he smokes weed a lot?

Cue sunshine

At T Rowe Price, we work for you and we don't smoke weed. Call us today at 1-800-NO-JUNKIES for your free, no obligation consultation with one of our accredited asset managers.

T Row Price, were our staff stopped doing blow in the 80s.

[Anonymous]

We are similar ages with 3 kids but a higher income (all DH, I don't work). Here are some of the things that I do as the manager of our assets.

1. We aim to self-insure almost everything. We have homeowner's insurance but the deductibles are very high, same with car insurance. We do carry an umbrella policy to protect us if someone sues, and my husband has term life insurance. I do not carry life insurance as a SAHM. We never buy any kind of insurance for our phones, appliances, etc.

2. We invest in Vanguard and also have a stock portfolio. Our major aim is to keep fees lows, so no high fee mutual funds and no financial advisors.

3. The kids 529's are with Utah (again Vanguard). Out of state grandparents are the major contributors to those funds so we just went with the low fee option.

4. We have a lot saved (really the majority of our money) outside of 401k's. DH's job may not last forever and we don't want all of our money tied up in retirement funds. This is the one thing that is really contrary to most advice but we like have the flexibility of having savings outside of restricted 401ks.

5. I keep my Federal TSP and will not roll it over into an outside IRA even though I don't work anymore. The TSP is a really good program, IMO, and I can't beat it with an outside IRA.

[Anonymous]

Anonymous wrote:There seems to be a large variance among folks on how much money one actually needs to earn. Basing your needs on how much your friends make doesn't seem like a good place to start. I don't know how much my friends make with the exception of the Feds since I know their gs level.

I just find it interesting. My husband and I combined make less than the guy who makes $190k. We max out one 401k and an IRA. We are doing a two year pre paid university plan for our two kids and we make extra mortgage payments every year. I feel like we eat out a lot. We do have fairly cheap vacations since we tend to crash at family and friends vacation houses, but I really don't feel like we are ever stressed for cash. Not even when our hot water heater broke.

What kinds of expenses do people have that they make such large amounts and can't achieve adequate savings and lifestyles? The only thing I can think of is if someone has an especially demanding job requiring a nanny and overtime pay. I just use a daycare center, but even we have a cleaning lady. Perspective people!

I am in exactly your boat. We make $127k combined and I feel like we are living on air. We are so flush, it's ridiculous.

BUT. Our housing costs are the same as they were when we made $70k combined. So I imagine that's a big difference - we kept our housing costs the same as our income rose, we weren't keeping up w/ the Joneses.

[Anonymous]

We have a similar story to OP, except we were in somewhat dire financial straits three years ago and due to job switches for both of us, are in a startlingly better position now. We started this process last fall with Morgan Stanley in Bethesda. Some things we've done:
- refinanced twice, once to get two loans into one and then to reduce the rate on that loan;
- got Maryland College Investment Plans with T. Rowe Price started for both kids - put a big chunk in for each and set up automatic monthly contributions;
- rolled over old 401Ks into IRAs;
- started new 401K at new firm;
- moved our brokerage account to them from my husband's college friend whose wife is divorcing him because he suddenly started smoking a lot of weed, daily;
- met with an estate planner to finally get wills in place

Still need to do - increase life insurance

I might be forgetting something but that is a good start. There is an initial consultation fee and they take a very small percentage of the assets under management, both if which we have felt were very, very well worth it.

OP here. You list several things we need to do here (including the wills). I am lawyer, I know it's disgraceful that we haven't done this yet. Do you have a specific person @ Morgan Stanley to recommend? Will they be interested in us? (We don't have much in the way of cash to invest currently).

[Anonymous]

Anonymous wrote:There seems to be a large variance among folks on how much money one actually needs to earn. Basing your needs on how much your friends make doesn't seem like a good place to start. I don't know how much my friends make with the exception of the Feds since I know their gs level.

I just find it interesting. My husband and I combined make less than the guy who makes $190k. We max out one 401k and an IRA. We are doing a two year pre paid university plan for our two kids and we make extra mortgage payments every year. I feel like we eat out a lot. We do have fairly cheap vacations since we tend to crash at family and friends vacation houses, but I really don't feel like we are ever stressed for cash. Not even when our hot water heater broke.

What kinds of expenses do people have that they make such large amounts and can't achieve adequate savings and lifestyles? The only thing I can think of is if someone has an especially demanding job requiring a nanny and overtime pay. I just use a daycare center, but even we have a cleaning lady. Perspective people!

I am in exactly your boat. We make $127k combined and I feel like we are living on air. We are so flush, it's ridiculous.

BUT. Our housing costs are the same as they were when we made $70k combined. So I imagine that's a big difference - we kept our housing costs the same as our income rose, we weren't keeping up w/ the Joneses.

You know how much luck plays into this, people? When did you buy your home, Ms. $127K "so flush, it's ridiculous"? Not all of us had great timing - not always something you control. When I lost my job now 10+ years ago (2001 in what now seems like a minor recession - didn't feel that way at the time!) we had to move cities & take a loss on our home for the next job (which came with a pay cut). Has taken a long time to work our way back, and it meant that we didn't have the cash to get into the DC market just as it was poised to take off - instead got in at its last peak in 2005. Not a question of keeping up with the Joneses.