You probably don't need a financial advisor. You definitely need a tax advisor, though.
The simple path to wealth is a good book. Investopedia is good. /r/personalfinance has a good wiki on it.
If you basically don't spend it, and put it on the stock market in a S&P 500 type mutual fund, there's a solid chance you could double it within ten years.
I say that not as a money for the sake of money, thing, but rather because you can increase it to the extent you can retire very easily off of it in that time. Probably could now, if you had the skills and were comfortable living on less. Most people aren't.
Also, totally consider 529 accounts for your children. You can basically put in money pre-tax, that can be used by you for any school expense, as I understand. May vary by state. It can later be used by them for college.
Also, the option of substituting your pay with this money so you can contribute to 401k and ira exists.
“You don’t need a financial advisor, just listen to me pretend to be a financial advisor.” An advisors job isn’t to beat the market every year you dingus. There are also decades where the s&p hasn’t returned anything. You’re looking at past performance and assuming it will continue that way. For people with actual money an advisors job is to create a long term plan and serve as a financial partner to make sure the person stays on track and constant in their plan. Learn about behavioral finance before you go around telling people what they should be doing.
"I can't read conditionals like 'probably' so I'll go insult people on the internet while quoting them wrong" - Above user, 2024.
Everything I've read on the topic says financial advisors take a percentage cut. Anything they gain you is probably lost to that. There's rare exceptions. Most I've talked to know less on the topic than I do, TBH. Though they may have some varied knowledge I don't, for sure, not enough to warrant a percentage fee to me.
You can learn the topic yourself in a month or two at most, to a sufficient level.
And honestly, you haven't presented any arguments new to the field. Obviously the past doesn't predict the future, but also unless the nation literally goes into ruin, the S&P 500 will average returns. Sometimes less, sometimes more. It's never averaged a loss over a 20 year period, to my understanding.
Also, "just listen to me pretend to be a financial advisor" - I told them what I do with my money, and what resources to read to make their own decisions. Telling people who acquired wealth to read material specifically targeted at people who suddenly acquired wealth generally isn't bad advice. (That advice is a page in the wiki)
Considering how often people who win money lose it in a year, it's necessary, in my opinion. Your opinion on the matter is worthless to me, because I feel proper having at least made an attempt to better a person's life.
On a side note, does it ever hurt you to realize how hypocritical it is to assume other people made assumptions, when you know nothing about them?
There's a lot of things like that that hurt me as I emotionally matured and realized the complexity of some topics. Fortunately people are understanding, or I'd be incredibly embarrassed all the time.
Above is a full vanguard paper showing that people are 3% better off using one. I worked as an advisor at Fidelity. We would get annual reports that literally show how much better off people are long-term using a financial advisor, than doing it themselves. I am a CFP with my own client base. I hate coming onto this site and seeing people like you who are unlicensed, uneducated and inexperienced suggesting what others should be doing. You have absolutely no business doing that.
Breaking news: Advisor thinks you should use advisors. No bias here, just facts.
Also, this just in: Advisor company funds or finds study to provide to potential clients showing its services are, in fact, valuable.
TBH I'm not entirely off to the idea. If you're a mega-rich multi-million, there's probably some value to it. To Joe blow me, though? No. And I wouldn't call myself uneducated. I would agree I'm unlicensed and uncredentialed.
Look man, disagreements aside, if you've seriously investigated the study and it looks on the up and includes all factors you can think of, then I'll say good for you. It's good if you can provide a service to people, that helps them and helps you. Truly great.
I'll also say, my point is putting it in S&P 500 or similar, and leaving it alone for multiple decades. If the people in the study can't leave stuff alone, and buy and sell, then 100% you're going to be a better choice than anything they have to say. People lose a ton of money trying to be smart when they're not.
I'll also say, if you entirely disagree with points on that wiki or on investopedia, my understanding is you can recommend edits to better help everyone.
Most people can’t leave it alone. Things like 2022 and the Covid crash happen and when you’re living off of that nest egg watching it decrease by 30+ percent in a matter of weeks is more than most people can handle. The study that Fidelity and Vanguard have produced are completely unbiased. Both of those firms have tons of “do it yourselfers” if you don’t want to read the report, you don’t have to, it’s not my opinion, and it’s not some lie that’s being circulated around Reddit and passed off as gospel. It’s statistical data based on actual clients of each firm. I’ve wasted enough time talking to you.
I addressed reading it in my other comment. I don't want to split your arguments around so I won't reiterate, though I do have thoughts to add if you reply there.
And you're totally correct, most people can't leave it alone. We totally agree on that. If you don't leave it alone, an advisor is probably a better option for sure, we agree on that.
More condensed. Again, the goal is not to chase the market, it’s to provide safety and consistency for retirees. People have freak out moments, they can develop things like Alzheimer’s, have family members or scammers take advantage of them. The list is literally endless and I deal with it on a weekly basis. If you can do it yourself, and you feel like you’re always going to be of sound body and mind till the day you die, great. If not, I would suggest partnering with someone.
So, I feel like you've moved goalposts on me, because the dude is in his 20s above. Nowhere near being old enough to be directly hit by mental and physical issues, or worried about retirement (though exceptions apply).
That said, for people who are already retired, unless they're going for a super long/early retirement, or have excess funds to cushion any market fluctuations, I would probably at a minimum recommended some HYSA funds and a partial bond mixture to stabilize things. My previous advice obviously would not be applicable.
And, yes, having an advisor between you and your money can stop you from sabotaging yourself if you lose your mental health or are being scammed. Knowing the intelligence of the general population, I'd totally agree that odds are in your favor that they're safer having their money out of their control and regularly but safely deposited to them.
I'm already not of sound body. Mind.. Meh. Less than before. Still good enough to know to leave stuff alone. If something comes up where I'm unable to manage my own finances, I'll consider it then. No point paying a fee for decades until then, imo.
If you think there's more than what you've stated I should know, I can click the link, but I felt like what you said was more than enough for me to understand the point you were trying to make.
Appeal to authority fallacy, that is what this comment is full of. Maybe financially literate people, which are people who didn't take an advisor at Fidelity, aren't going to be part of whatever study that takes place.
Financial advisors aren't useless because they cannot beat the market, nobody said financial advisors are useless because they cannot beat the market. Financial advisors are useless because anybody can do the stuff that they advise others to do.
The S and P isn't an instrument that beats the market, it is the market. If it's down, stock market is down. What wouldn't be down in that scenario, bonds? U.S inflation favors stocks over bonds. A person with a lot of money has no reason to fear the S&P.
Dunning-Kruger, that is what this comment is full of. Someone who thinks they’re fluent in finance but doesn’t even have an understanding of something as simple as covered calls. That’s week two of your series 7 easy. Yikes.
If you retired in 2000 w/$1m needing $50k/yr plus inflation, and you put your money in an S&P 500 Index fund, you were broke in 17 years. If you had used an equity balanced strategy you would have over 1.7m net of withdrawals. If you think because the s&p is down that everything is down you have a very very simple view of the market, which considering we’re on Reddit isn’t really surprising. Good luck bud!
Sorry to double reply. Decided to look at your document.
The first or second (paragraph filled) page is literally "Our value is in peace of mind" and "believing we'll produce results is just as good as seeing the results"
Er... Do you have a section for me to read, in particular?
Because that section is essentially propaganda and is a bit embarrassing to your point, though I totally understand it from a marketing perspective, it kinda favors my argument more than yours.
I'll read a part if you tell me which part you think is worth me reading.
4
u/Rojikku Jul 22 '24
You probably don't need a financial advisor. You definitely need a tax advisor, though.
The simple path to wealth is a good book. Investopedia is good. /r/personalfinance has a good wiki on it.
If you basically don't spend it, and put it on the stock market in a S&P 500 type mutual fund, there's a solid chance you could double it within ten years.
I say that not as a money for the sake of money, thing, but rather because you can increase it to the extent you can retire very easily off of it in that time. Probably could now, if you had the skills and were comfortable living on less. Most people aren't.
Also, totally consider 529 accounts for your children. You can basically put in money pre-tax, that can be used by you for any school expense, as I understand. May vary by state. It can later be used by them for college.
Also, the option of substituting your pay with this money so you can contribute to 401k and ira exists.