Anonymous wrote:My sense, as a low-income person by the standards of DCUM, is that a financial planner works well for people who need help trying to figure out how to diversify their holdings. But you aren't at that point yet -- you don't need a financial planner to tell you "save 3 to 6 months of living expenses, put as much as you can towards retirement, and pay off your debts."

Personally, I think that you should start with reading some personal finance books, and by tracking your spending through a program such as Mint, YNAB (I'm partial to YNAB) or even a spreadsheet, if you have some simple Excel skills. What you want to do is have a really solid idea of how much money is coming in and how EXACTLY it is going out. No approximating or guessing!

At the very least, if you devote yourself to a little bit of pre-reading, and you track your spending for three months, you'll be able to ask more targeted questions of a financial planner if you decide that you really DO need one -- instead of just wasting that professional's time (and your own) by asking basic stuff.

Bingo.

Jennifer Schiffer in the Courthouse area for Bean, Kinney and Korman.

Anonymous wrote:

OTAlexFA wrote:Do you have long-term care insurance in place? If not, and you eventually require care, you'll burn through that money quickly.

Actually long term care cost would probably be cheaper than 90k a year.

According to LongTermCare.gov, in 2012 around the DC area, the average nursing home (semi-private room) was over $93K/year. A private room in a nursing home cost over $109K.

Research a product called "MoneyGuard" by Lincoln. It's a unique strategy that is actually a life-insurance product but whose main purpose is LTC. Surrender is 100% after 5 years but provides an increasing amount of coverage via an inflation percentage. If you never use the LTC aspect, it provides a death benefit, too.

It is expensive (min. $50K, max. 10 pays) but a pretty good investment if you have ever been through the situation before and feel the need to participate. Also, if you have cash on the sidelines in a retirement account, this is one way to put it to work.

Do you have long-term care insurance in place? If not, and you eventually require care, you'll burn through that money quickly.

Anonymous wrote:also, to the financial advisor above, do you realize that you have to beat the market by whatever your fees are (i'm guessing they are also in the range of 1-2%?), just for your clients to BREAK EVEN?

can you please explain why you are working as a financial advisor and not sitting on the beach somewhere counting your billions if you are able to beat the market by a couple percentage points on a consistent basis?

Wow, that couldn't be more incorrect. Say I charge 1.5% for your example...that means, I have to put them in vehicles that will return 1.5%. That, my friend, "BREAK(S) EVEN". You're trying to talk about generating alpha over the benchmark, or, as people like to refer to it here, the "market."

I've actually discussed what FAs do previously, and a little ad nauseum, so I won't go insane repeating myself what we do. In fact, those that are this venomous aren't worth the time because I hope people see through the vitriol. And, if not, I'm not going to change their mind anyway so I'm just wasting effort to begin with.

If you want to try and be the market or beat the market, go high risk and 100% equity exposure. Go all in!

"OT Alex seems to be a Financial Advisor." - That IS a fact. (Hence the FA at the end of the handle.)

"Thousands of unsuspecting people have had their life savings stolen from them by slick Financial Advisors." While I don't doubt this number is in the thousands, I also think that a very small few bad apples can ruin the bunch. If you think thousands of advisors are attempting to do this, I'd say you're overwhelmingly mistaken.

"Financial Advisors don't have any inside information which is not available to anyone who pays attention to the markets." - I'd debate that. Not to mention, I'd love to see where and how you get your information.

"Financial Advisors charge an annual fee of 1-2% of the overall value of each person's money they manage." - All of them? False. Majority? Yes. Doctors aren't free. Mechanics aren't free. Hair stylists aren't free. Counselors aren't free. I can't believe that THEY would charge for a service if I willingly go to one. The nerve!

"When people pay 1-2% of their entire wealth each year to their Financial Advisors they lose the potential of compounding their wealth." People do not have their entire wealth with FAs. I'm not investing their home equities, car titles, life insurance values, et al. But, you're doing quite the job of painting the dire scenario here.

"Over a period of decades Financial Advisors/Planners become wealthy by siphoning off the profits their client should have been earning." Is that so? Again, would love to see your statistics with this claim. Or, is "siphoning off the profits" your negative way of rephrasing that FAs charge for what they do?

"Prudent people who accumulate great wealth in their lives do not use Financial Advisors/Planners. If you are not capable of managing your own money you will never increase your wealth by giving it to someone else to manage it for you." - Well this is patently false and more of an opinion, frankly. But, I'm sure you have facts to back this up too..?


I like having this debate. I know I'm being a bit snarky in my responses but all I'm trying to do is enlighten people that paint the wrong pictures of people.

I watch Dateline NBC sometimes. It must mean all of my neighbors are online child predators. I mean, it's on TV, so it must be true!

Not using a financial advisor is one's prerogative and I won't demean you for doing so by any means. However, to say that all FAs are greedy and thieves is so patently false that I'm almost disappointed in justifying that opinion with a response.

It's essentially a bank account that provides higher returns than traditional savings accounts (starting at 2% APY) and gives you FDIC Insurance protection.

Anonymous wrote:I thought you had to to the official virginia 529 to deduct it from taxes

You have to be in one of those VA 529 plans (not directly-sold) to get the state tax deduction. It can be any of the ones listed.

There are tools out there that will help you determine exactly what you are paying. One of the 3rd party tools I use (as a paid membership) when I do a portfolio comparison includes a tab for expense ratios that will let you know exactly what it's costing you. More importantly, you need to share with your advisor your concerns re: bear market, expense ratios, et al. to see if those are the right funds for you. They should be able to drill down and get you that info on their own.

As someone said, if your performance is in line with your risk profile, then you may need not worry. All returns should be quoted net of fees.

In Virginia, BB&T and United Bank are the only 2 banks to offer a bank-sold program (CollegeWealth). You can also go through American Funds directly for the inVEST program. You can use a financial advisory firm for CollegeAmerica.

Each platform has different features so familiarize yourself or meet with someone to begin your program.

http://www.virginia529.com/features-and-benefits/index.php

State Guaranty Associations, established to evaluate and ensure solvency in insurance companies.

We all know the word "annuity" can have a negative connotation attached so does the subject sound better? What are DCUM's thoughts on annuities which are, in effect, guaranteed personal pensions?

Pros: Guarantees an annual percentage, pays income for life, locks in gains at all-time market highs, cash values, estate planning advantages.
Cons: "Insurance product", surrender charges within first few years, illiquid, expensive up front

Annuities are not suitable for many as a specific type of client typically fits the bill. I'm just curious what people's first impressions of them are.

Look forward to the responses!

Anonymous wrote:I told you my math may be wrong. This is what happens when you try and rush and make things more difficult than they need be. The 6-year is the better deal. Holy smokes.

Sorry, this is me and I own it. My goodness.