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Message
When is the right time to go to a Financial Advisor and how do I select one?
Posted on 2/29/16 at 12:08 pm
Posted on 2/29/16 at 12:08 pm
My wife and I were recently going over finances and came to the conclusion that we might be at a point where it would be best to seek a financial advisor. We are in our mid 30's and right now we are throwing a very large amount of money towards paying off all debts. As we sit now, we should have all debts including student loans paid within 3 years and the house could be paid off within 10yrs.
She would like to pay everything off but Id like to throw alot of money towards retirement. We currently contribute to our 401k's at the max match but other than that we only have a savings acct. My income should see a healthy bump this year and hers will probably stay around the same for the next few years
We moved from Baton Rouge to Covington in May so unfortunately I dont know anyone in the financial business out here.
She would like to pay everything off but Id like to throw alot of money towards retirement. We currently contribute to our 401k's at the max match but other than that we only have a savings acct. My income should see a healthy bump this year and hers will probably stay around the same for the next few years
We moved from Baton Rouge to Covington in May so unfortunately I dont know anyone in the financial business out here.
This post was edited on 2/29/16 at 12:55 pm
6
Posted on 2/29/16 at 12:28 pm to JOHNN
Your going to pay 5% using most CFP. Educating yourself doesn't cost anything but time. For myself I wouldn't even consider it unless I had over a million in investments.
This post was edited on 2/29/16 at 12:29 pm
Posted on 2/29/16 at 12:30 pm to JOHNN
What are the rates on the debt? If they are high, then pay them off. If they are low, then consider retirement investing. You can complicate it a lot more than that, but this is the simple logic at the crux of it.
For example: If you pay off debt with a 9% interest rate, then it as though you got a 9% return on that payoff.
For example: If you pay off debt with a 9% interest rate, then it as though you got a 9% return on that payoff.
Posted on 2/29/16 at 12:33 pm to lsufan1971
quote:
Your going to pay 5% using most CFP. Educating yourself doesn't cost anything but time. For myself I wouldn't even consider it unless I had over a million in investments.
The MTB can cover the needs of most average people.
Personally, I believe in keeping finances as simple as possible for as long as possible.
Posted on 2/29/16 at 12:44 pm to JOHNN
It's difficult to replace time in the market, so I suggest retirement savings. Maybe meet in the middle? A divorce will cost you 50%.
Posted on 2/29/16 at 12:46 pm to JOHNN
No need to go to a financial advisor man. You already know what one would say, based on your op. Your dilemma lies with you and your wife compromising, a financial advisor won't help you with that.
Posted on 2/29/16 at 12:48 pm to 13SaintTiger
I think he's alluding to the wife believing a professional and not believing him.
Posted on 2/29/16 at 12:50 pm to iknowmorethanyou
Paying down credit cards and student loans are almost certainly the place to start (if you have those). Depending on the rate on a car loan, it could also make sense to knock that out (many people on the MTB hates car loans since it is a depreciating asset. Personally, I have no problem with them as long as the loan is a low rate and the owner is not upside down on the loan).
The mortgage gets a bit more interesting because of tax ramifications. Are you itemizing your tax deductions? If so, you may be using the mortgage interest deduction which is offsetting some of your federal taxes. However, a fully paid for house has to be one of the most "freeing" experiences and will open up a ton of cash flow down the road.
The mortgage gets a bit more interesting because of tax ramifications. Are you itemizing your tax deductions? If so, you may be using the mortgage interest deduction which is offsetting some of your federal taxes. However, a fully paid for house has to be one of the most "freeing" experiences and will open up a ton of cash flow down the road.
Posted on 2/29/16 at 12:52 pm to lynxcat
House is high 3, almost 4
Student loans are whatever they typically are.
Both vehicles are 1.75 and 2.25
Pretty sure we dont have any credit card debt.
Furniture is 0%
I understand that the majority of what I would need to know could be found here and other means of research but with the hours I work, I just dont have the time to delve into it. We are ok paying a professional to do something as critical as investments vs learning through trial and error.
Student loans are whatever they typically are.
Both vehicles are 1.75 and 2.25
Pretty sure we dont have any credit card debt.
Furniture is 0%
I understand that the majority of what I would need to know could be found here and other means of research but with the hours I work, I just dont have the time to delve into it. We are ok paying a professional to do something as critical as investments vs learning through trial and error.
Posted on 2/29/16 at 12:59 pm to JOHNN
quote:
House is high 3, almost 4
Student loans are whatever they typically are.
Both vehicles are 1.75 and 2.25
Pretty sure we dont have any credit card debt.
Furniture is 0%
Student loans are likely anywhere from 6-9%. Start there with all excess cash.
Furniture - make sure this is paid off before the end of the 0% period.
Vehicles at ~2% don't bother me as long as they aren't longer than 5 year terms.
I would stay steady on the house payments and invest whatever is leftover in the market. A ROTH IRA is a great vehicle since your income is set to rise (thus changing your tax bracket).
As you said, understanding all of these things and being comfortable with it takes time. I'm sure someone on the board can help with finding a good FA locally for you if you are having doubts.
It sounds like you and the wife are in a terrific position for being ~35.
This post was edited on 2/29/16 at 1:02 pm
Posted on 2/29/16 at 1:02 pm to iknowmorethanyou
quote:
I think he's alluding to the wife believing a professional and not believing him.
Yes I guess I didnt specifically say that but she would be more willing to go towards investment if thats wht was felt for our current situation.
With the money we make, Id like us to max out our roth's every year but we havent gotten to setting that up or even know how really. We would also like to set up the education savings plan the state has. There is alot of things I think we could do but its a matter of how do we decide how much goes to what?
Posted on 2/29/16 at 1:09 pm to JOHNN
LINK
Look into the Vanguard Life Strategy funds. I have them in my roths. You can choose your risk tolerance. Very easy and they are cheap to own. There is also the Target Retirement funds. They re-balance as the funds age so you don't have to worry about it.
Remember this if your paying 5% to a CFP you have to make 6% on your investments just to break even. Your giving up a treamendous amount of wealth compounded over 20-30 years.
Look into the Vanguard Life Strategy funds. I have them in my roths. You can choose your risk tolerance. Very easy and they are cheap to own. There is also the Target Retirement funds. They re-balance as the funds age so you don't have to worry about it.
Remember this if your paying 5% to a CFP you have to make 6% on your investments just to break even. Your giving up a treamendous amount of wealth compounded over 20-30 years.
This post was edited on 2/29/16 at 1:13 pm
Posted on 2/29/16 at 1:31 pm to JOHNN
Most won't want to talk to you unless you got $100k+ for them to handle.
Posted on 2/29/16 at 1:44 pm to JOHNN
I think anyone can appreciate from some advice but the only one who can determine if it was worth it or not is ultimately you.
Most FA's have a free initial consultation and someone completely made up that 5% figure that was thrown out earlier so don't let that derail you.
Most FA's have a free initial consultation and someone completely made up that 5% figure that was thrown out earlier so don't let that derail you.
Posted on 2/29/16 at 1:48 pm to lsufan1971
quote:
Your going to pay 5% using most CFP
Please explain.
Posted on 2/29/16 at 2:56 pm to lynxcat
Thank you. Yeah we have been extremely blessed this past year and can really see that the hard work is really starting to pay off. Im all about the Roths because we had a big wakeup call with going into a higher tax bracket. We arent getting anything back after thinking we would be getting around 3-4k and also not being able to deduct the kids schooling either.
Posted on 2/29/16 at 3:07 pm to JOHNN
quote:
Thank you. Yeah we have been extremely blessed this past year and can really see that the hard work is really starting to pay off. Im all about the Roths because we had a big wakeup call with going into a higher tax bracket. We arent getting anything back after thinking we would be getting around 3-4k and also not being able to deduct the kids schooling either.
Make sure you pay attention to the information below
quote:
In 2015, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014.
Posted on 2/29/16 at 6:11 pm to tigersnipen
quote:
quote:
In 2015, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014.
Did some reading but not quite understanding this. Can we make over the 183k to get the deduction? Our combined income for 2015 was just shy of that but we should be over in 2016.
Posted on 2/29/16 at 6:27 pm to JOHNN
It's based on AGI. Take your income and subtract personal exemptions and for AGI deductions to get to AGI.
Posted on 2/29/16 at 8:04 pm to JOHNN
Roth contributions are after tax, so they will not help with going into a high tax bracket. suggest you read up at Bogleheads.org.
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