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Started By
Message
Need advice re: financial planner
Posted on 6/19/10 at 8:18 am
Posted on 6/19/10 at 8:18 am
I think I really need the services of a financial planner, but I'm not really sure which direction to take. I've only had limited interaction with anyone in that field and came away unimpressed. The guys that I talked to tried hard to push me towards whole life policies and a very limited family of mutual funds. My financial situation is also not exactly typical.
I am 35, married with 2 kids 5 and 7 yrs old. I make around $400k a year, but also earn around $200k from distributions from a business partnership. I have about $100k in retirement accounts and max any tax deferred contributions I can make, which is around $30k a year with no match. I have about $300k in my home and owe around $850k at 5.125% on a 30 yr mortgage. I also owe around $85k in student loans at less than 3%.
Is there a type of planner that would be best for someone with a higher income? My impression is that a lot of guys just put the numbers into a computer and then make recommendations from that. I know of a guy who charges a flat fee per year for financial planning services and he has good recommendations, but I don't know the extent of what he offers.
I don't come from a family with money. My dad was career military and now is employed by the federal government. He will retire with 2 govt pensions and financial planning was not something he ever did and we certainly never discussed it. I don't want to look back 10 years from now and realize that I totally screwed up in planning for my financial future.
I am 35, married with 2 kids 5 and 7 yrs old. I make around $400k a year, but also earn around $200k from distributions from a business partnership. I have about $100k in retirement accounts and max any tax deferred contributions I can make, which is around $30k a year with no match. I have about $300k in my home and owe around $850k at 5.125% on a 30 yr mortgage. I also owe around $85k in student loans at less than 3%.
Is there a type of planner that would be best for someone with a higher income? My impression is that a lot of guys just put the numbers into a computer and then make recommendations from that. I know of a guy who charges a flat fee per year for financial planning services and he has good recommendations, but I don't know the extent of what he offers.
I don't come from a family with money. My dad was career military and now is employed by the federal government. He will retire with 2 govt pensions and financial planning was not something he ever did and we certainly never discussed it. I don't want to look back 10 years from now and realize that I totally screwed up in planning for my financial future.
7
Posted on 6/19/10 at 8:41 am to RC
Posted on 6/19/10 at 9:27 am to RC
Just ask around at a few places until you find someone you are comfortable with. Edward Jones, etc type of places.
I am fining your story odd that you have almost $600K in income, yet you only have $100K in retirement and owe a shitload of money between your home loan and a student loan. Seems you may have an issue with someone stealing your money from under your nose or something.
I am fining your story odd that you have almost $600K in income, yet you only have $100K in retirement and owe a shitload of money between your home loan and a student loan. Seems you may have an issue with someone stealing your money from under your nose or something.
Posted on 6/19/10 at 9:30 am to notiger1997
I've only been making this kind of money for a couple years, prior to that it was basically racking up debt.
Posted on 6/19/10 at 10:23 am to RC
quote:
I know of a guy who charges a flat fee per year for financial planning services and he has good recommendations
I think you are on the right route with that but you have a lot at stake so I'd interview something like five of them and find one with experience, that you are comfortable with, and recommendations from people you know always help. With that kind of income I'd look for fee only advisors. If you are having trouble finding enough recommendations for fee only advisors try this site for a few to add to the interview process.
LINK
Posted on 6/19/10 at 10:49 am to RC
quote:
I think I really need the services of a financial planner
quote:
make around $400k a year, but also earn around $200k from distributions from a business partnership
Amsterdam just jizzed in his pants.
Posted on 6/19/10 at 10:53 am to Cash
quote:
Amsterdam just jizzed in his pants.
Posted on 6/19/10 at 12:17 pm to RC
quote:
I've only been making this kind of money for a couple years, prior to that it was basically racking up debt.
Step 1: Unlever yourself
Posted on 6/19/10 at 1:17 pm to TheHiddenFlask
quote:
Step 1: Unlever yourself
quote:
I also owe around $85k in student loans at less than 3%.
Some leverage isn't such a bad thing if you're only paying 3%.
Posted on 6/19/10 at 1:41 pm to RC
RC, as the Flask said, unlever yourself. I would leave the student loans alone for now, those are fine, especially at 3%. The mortgage on the other hand, I would throw a lot of money at. While your rate is good there at 5.1%, 800k is a TON of money to owe.
Also, you need to up the money in your retirement account. I assume, you have maxed out an IRA in addition to your 401k. If so, then get a brokerage account and then start researching on stocks/bonds to purchase.
ETA: 1st step would be to upgrade from RC cola brah.
Also, you need to up the money in your retirement account. I assume, you have maxed out an IRA in addition to your 401k. If so, then get a brokerage account and then start researching on stocks/bonds to purchase.
ETA: 1st step would be to upgrade from RC cola brah.
This post was edited on 6/19/10 at 1:43 pm
Posted on 6/19/10 at 5:08 pm to LSUtoOmaha
Yeah. Definitely chip away at that mortgage. Those student loans are crazy cheap. I wouldn't prepay those.
Posted on 6/19/10 at 5:13 pm to TheHiddenFlask
Do you see yourself staying in your current home for an extended length of time?
As a family of 4, you are living in a home worth more than $1.1 million with the majority of your debt tied to its mortgage.
If you plan on moving in the foreseeable future, then I could see that potentially changing the outlook.
Depending on what your goals are and the standard of living you would like to achieve, you could potentially retire by 50 if you really wanted to.
As a family of 4, you are living in a home worth more than $1.1 million with the majority of your debt tied to its mortgage.
If you plan on moving in the foreseeable future, then I could see that potentially changing the outlook.
Depending on what your goals are and the standard of living you would like to achieve, you could potentially retire by 50 if you really wanted to.
This post was edited on 6/19/10 at 5:16 pm
Posted on 6/19/10 at 5:23 pm to TheHiddenFlask
I would say you need to pin down what kind of "financial planning" you want/need to do. Are you talking about maximizing tax efficiency, whether in the future, or in your current state? You should probably talk to your accountant or a tax lawyer. Are you talking about making investments? It completely depends on your risk tolerances, but with that kind of income, your options are pretty much unlimited. I would avoid EJ-type places at all costs and look specifically for people that deal with high net worth clients. I know of a few places in nola, if that's your location. Depending on where you are, you might have to get out of your area and get to a bigger metro area (Htown/Dallas/whatever). What dp you do to be pulling down that kind of haul btw?
Posted on 6/19/10 at 5:32 pm to lynxcat
I plan on staying in this house forever. The only thing that might change that is if we decide to downsize later in life.
As far as the student loans, I have no plans to pay them back sooner than necessary. Even though I don't qualify for the student loan interest deduction, the interest rate is rock bottom and if I happen to die my family is not obligated to pay it back - sort of like having built in life insurance.
I don't have any desire to retire before 65, and would anticipate working at least part time beyond that. I think working is a good way to keep the mind sharp.
I know my situation seems a bit odd, but I finished residency a few years ago and ended up moving to a new practice after less than 2 years. Most of my extra income early on went into building the new house, and of course with a big new house comes big new furnishings. I am finally more or less settled in my practice and finances and need to get serious about financial planning. I am looking for an adviser for investments/retirement planning as well as ways to reduce my tax burden. I am close to NOLA, on the northshore, if anyone has any specific recommendations.
As far as the student loans, I have no plans to pay them back sooner than necessary. Even though I don't qualify for the student loan interest deduction, the interest rate is rock bottom and if I happen to die my family is not obligated to pay it back - sort of like having built in life insurance.
I don't have any desire to retire before 65, and would anticipate working at least part time beyond that. I think working is a good way to keep the mind sharp.
I know my situation seems a bit odd, but I finished residency a few years ago and ended up moving to a new practice after less than 2 years. Most of my extra income early on went into building the new house, and of course with a big new house comes big new furnishings. I am finally more or less settled in my practice and finances and need to get serious about financial planning. I am looking for an adviser for investments/retirement planning as well as ways to reduce my tax burden. I am close to NOLA, on the northshore, if anyone has any specific recommendations.
Posted on 6/19/10 at 5:45 pm to RC
Ah, a doctor. Last night, I was talking to some buddies who are in med school about cardiologists making that kind of money at precisely you age. In NOLA, a friend of mine works here. It might be worthwhile to give them a call. I also have a family friend that is the VP of the Morgan Stanley office in NOLA. I can give you his contact info through email if you'd like. I can't vouch for either as being good or bad as I am 24 and have no money, these are just the places I know of. The people, however, are definitely bright, honest, and hard-working.
ETA: I would definitely seek out a separate advisor for tax stuff though. Your CPA should be doing that now, if they're not, you need to get a new one.
In NOLA, a friend of mine works here. It might be worthwhile to give them a call. I also have a family friend that is the VP of the Morgan Stanley office in NOLA. I can give you his contact info through email if you'd like. I can't vouch for either as being good or bad as I am 24 and have no money, these are just the places I know of. The people, however, are definitely bright, honest, and hard-working. ETA: I would definitely seek out a separate advisor for tax stuff though. Your CPA should be doing that now, if they're not, you need to get a new one.
This post was edited on 6/19/10 at 5:47 pm
Posted on 6/19/10 at 6:04 pm to kfizzle85
Don't mean to be harsh, but you should also ask your financial planner the options you have if you get divorced.
I'm not saying you married a ho, but lots of people get divorced. Nothing about you makes you different.
Be a boy scout. Be prepared.
I'm not saying you married a ho, but lots of people get divorced. Nothing about you makes you different.
Be a boy scout. Be prepared.
Posted on 6/19/10 at 11:11 pm to tigerpurple84
Two other things to think about, disibility insurance, and an emergency fund. A friend that is an ER doc was in a accident and could not work,did not have sufficent money or insurance coverage, and was forced to return to work too early in his recovery to avoid losing his house.
Posted on 6/20/10 at 4:25 pm to JWS3
Afterthought: Buy some muni bonds and keep paying a ton of interest on your house?
Posted on 6/20/10 at 5:53 pm to RC
Set up a 529 plan for each kid for sure. I'd also recommend a flat fee type investment firm, and avoid the Edward Jones types. If you can live off the 400k a year, and invest the 200k a year, you'll be set. I wouldn't pay the morgage off early, considering you have a good rate as well as the tax bracket you're in.
Posted on 6/20/10 at 6:29 pm to Ric Flair
quote:
Set up a 529 plan for each kid for sure
The 529 has to be one of the better financial avenues created in the past few years.
Is it necessary to have a 529 for each kid? Isn't it transferrable between children?
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