Financial advisor vent

[baselle]

Lets go back to the original question.

You met with the financial advisor, he rubbed you the wrong way, giving obvious advice "make more money" that would not work in your situation, and you fired him or will fire him (in a sense, you're not going back to him). Fair enough. You have to be comfortable and be able to respect your financial advisor to be able to follow his advice. If you get the heebie jeebies, run screaming. Lord knows, its not like there's a scarce supply of financial advisors...

And many people do better in their money management by themselves than they would if a financial advisor (esp a commission based one). I've heard the story of the millionaire who would ask for a financial advisors' tax return - if the advisor did better than the millionaire did, he'd hire him.

But I sense an extra dynamic here. You and your DH seem to have different opinions on the advisor and the advice you are getting. Whats up with that?

[autoxer]

Originally Posted by baselle

I've heard the story of the millionaire who would ask for a financial advisors' tax return - if the advisor did better than the millionaire did, he'd hire him.

I like that. Next time I get a cold call from some broker, I'm going to ask for that.

[Bluezy]

The financial planner is probably one of the following:

1) someone who has no children, not understanding the concept of parents wanting to be with their babies

2) someone who has children at home that wants to get away from them

3) so programmed into practicality the he forgot human interaction as a necessity to survival.

I'd go easy on the planner. While he has a point of finding something part-time during the summer, this suggestion is not right for you. It would not be right for me either!

[neatdesign]

Originally Posted by Bluezy

The financial planner is probably one of the following:

1) someone who has no children, not understanding the concept of parents wanting to be with their babies

2) someone who has children at home that wants to get away from them

3) so programmed into practicality the he forgot human interaction as a necessity to survival.

Dont' forget this one...

4) someone who sees a couple struggling with paying off thousands of dollars of debt and one of them has no income for 1/4 of the year, and suggests a pretty basic solution to increase their overall income and thus cut down their debt more quickly.


I really don't understand how people are equating this suggestion with being anti-children, anti-SAHMs and/or anti-human interaction. His was a logical suggestion, a no-brainer even: More income = quicker debt repayment. They went to him for financial advice, and he gave it.

This sort of response also suggests that a female financial planner wouldn't dare make such a suggestion (unless she's childless, of course). Honestly, I think it would be a huge red flag if ANY financial planner didn't raise the issue.

~ Jenney

[Jewelfine]

Originally Posted by Kris10Leigh

I have calmed down a bit, and can be civil now. (I wrote the above post having just completed a vent post about some recent unexpected bills.)

I don't like going a financial advisor and would take the advise to ditch him, but DH is against it. My problem is that this is our third advisor with this company and I have liked each less than the last. The guy we have now seems only to want to sell us stocks. He doesn't really care about our finances, but just wants to make money off of us. In passing conversation we mentioned that we have dear friends who own 4 restaurants. The guys eyes lit up and we had to endure a speech about increasing his business and could he have our friends phone number. I refused.

I still don't like the comment about not helping myself. If you would read the post again and my comments you'll see that I have explained myself rather well without going into my entire life history. My biggest reason for not taking on a second job over the summer is because I would not make enough money beyond the cost of daycare to make it worth the while.

And the biggest reason is one which apparently some just can't understand. I feel my boys are certainly worth a few sacrifices. I can take the "no spend" challenges in order to have time with them. I can reduce my grocery bill, I can play with my A/C temp to reduce my energy bill, I can turn off the computer at night, I can research companies that have better deals for services like phone, TV, etc. Not helping myself? Really?

Hey there,
I get that things are tough for you right now! I am really sorry to hear that. I have a question though - how does your financial advisor get paid? Is it commissions based on what he recommends to you? it makes me really mad when people go looking for help and end up getting ignored, or pushed on because the advisor is only looking out for the advisor and not the client.
This is why I took my CPA and became a Financial coach - I don't sell products because in my mind the client is the most important person in the situation. There is no point in buying stocks if you don't have the money or have lots of debt etc. etc.
It gets my goat!
Good Luck
Melanie

PS it is up to you how you want to spend your time and your summers - life is about living and making choices that reach all your goals!

[Bluezy]

Originally Posted by neatdesign

...His was a logical suggestion, a no-brainer even: More income = quicker debt repayment. They went to him for financial advice, and he gave it....

...thus showing that the choice right for Kris is to curb spending as her way of contributing towards debt reduction and have lots of quality time to spend with her children. It is simply the decision of the person.

I identify with Kris in that a mum has very quick emotional reactions when it comes to their children, especially scenarios that take quality time away. Therefore, comsider those of us who are mums guilty of practical no-brainers on occasion.

Hang in there Kris! You'll find a plan that is right for you to pay off more debt and allow your summers with your kids. This is the time in their lives that they need your attention. Before you know it they will be grown and gone.

[Kris10Leigh]

Thank you all! I see so many women around me make the difficult decision to make less money but stay home with their children and I am getting critisized for wanting not quite 3 months off every year!

Jewelfine, with this guy, I definitely feel like he is out to serve himself and not the client. His eyes actually glazed over when we started talking about budget. I think he saw immediately that there was no wiggle room in our budget to invest and he was done with us at that point. He IS commission based and we don't pay him. We started investing a whopping $50 a month 5 years ago, but we just haven't been able to up that payment at all. We also have life insurance with this company for everyone in the family.

[Ima saver]

Can I ask, what does he have you investing in? When I went to the guy that opened an Edward Jones office in our area, I found that I knew much more about investing than he did. He only wanted me to invest in his mutual funds, which all have loads. All of my mutual funds are no loads.

[Kris10Leigh]

Uh...huh? I don't even know what a load is. We have a Franklin Mutual Fund????? I know next to nothing about investing. DH's family invests heavily...mine not at all. It is not something I grew up with. I wouldn't know where to begin doing it myself. I'm not sure DH would either. Any help there would be appreciated...if I understand it.

[Ima saver]

Kris, a load is a charge that comes out of every dollar that you give him to invest. Franklin charges a 5.75% load or commission. so every time you invest $100.00 only $94.25 actually goes into your investment.
You can do this on your own. Pick a good fund, I am mostly with Vanguard, one of the biggest. It is no load and very low expenses. You call them, get a prospectus, and send them a check.
The only bad thing is that you NOW have to have a minimum of $3000 to open an account. I don't know if you have that much in your franklin account yet.
The fund I like is Vanguard Index 500 or Vanguard Total Stock Market.

1-800851-4999 is the number. We will be glad to help you. Once you open the acct. you can arrange to have money taken out of checking, or just send them a $100 check every two months. (I have nothing to do with any mutual fund co., I was just a waitress)

[Ima saver]

Find out the rest of the name of the fund, Franklin what? Call him and ask, ok!!

[Kris10Leigh]

I can try. We don't have $3000 right now. We have about $675 in the mutual fund we have set up. $50/mo doesn't go very far. Does that mean I should wait until I do have $3000 in there?

As long as we're discussing it, here's something else we are contemplating. Our current goal is of course to pay down $23,000 in debt. Along with that, we are going to start sending all of DH's payraises to a 401K. So which is more important? Funding the 401K? Or doing more with the mutual fund? Perhaps this payraise starts the 401K and the next pay raise can increase the mutual fund and so on? We are so clueless it's pathetic.

The 401K will reduce your tax bite and might be matched by the employer to a certain extent, that is retirement savings that you won't be able to touch until 59 1/2. I would say, from my persective, that is more important. Once you are fully funding that, and don't have debt - then I would look to investing elsewhere.

[Hypersion]

Try and focus on doing what will increase your networth the most.

What's the interest rate on your Debt? If it's higher than 10%+ than you shouldn't bother puting money into a mutual fund that MIGHT give you a 10% return.

Try listing your income, buget, debt and saving on this form and maybe we can be your finanical advisors.

[Ima saver]

Funding the 401 is more important. If I were you, I would still look for a mutual fund that took lower opening balances. Does anyone know of a no load fund that will allow you to open for about $500. some will, especially if you agree to have $50 a month put in automatically. I have not kept up with mutual funds like I should. They change so often. I use to have a list of low open balance funds, but that was years ago.
TIAA-CREF use to allow you to open an account with $50, if you agree to put in $50 every month, automatically. I have thir prospectus, but it is dated 2003.

Yes, if you are a Speech Therapist with a public school system, you could start a 403-B program at your place of employment through TIAA-CREF. They are for school systems only.
You wouldn't be able to put the $500 in at one shot, but you could put a very small amount in monthly drawn from your paycheck, and you would not be charged taxes on that. That would be like the 401K.

Or you could open a taxable fund also.

[Ima saver]

TIAA CREF must not be only for school systems. I have a mutual fund there, so does my granddaughter.

My mistake then - when I went to a presentation at the instiutiton where I work, that is how they marketed themselves.

[Kris10Leigh]

Hmmmm....so you guys really want to play financial advisor for me huh? How could I say "no" to that?

My salary pays ALL the bills from life insurance to the mortgage and there is little to no wiggle room. So we won't even talk about that. Although one of those "bills" is the mutual fund which is $50/mo.

Savings: $400 at present. It will be $3000 in a few weeks once DH is reimbursed for his trip. I plan to use it as a freedom account.

DH's pay: $1600/mo
Budget:
gas: 200
food: 400 (family of 4-includes dining out)
Freedom account: 600
CC #2: 400 to cover minimum payment (ugh!)

Additional income from DH's partime church job: 600/mo. (All goes to CC #1)

Debts:
CC #1: $5,400
CC #2: $18,300 (realized as I lay in bed last night that that's more than the $23,000 I thought it was.)
I just have to add that the reason the CC's are so high is because we carried two mortgages for 11 months early in our marriage which I will NEVER do again and because DH was out of work for 9 months at one point. We don't go out buying yahts or anything. That'll be the day!

As you can see, there is no retirement plan for DH outside of the $50/mo for mutual funds. State Teachers Retirement takes money from my paycheck so at least we have that. My plan is to start taking DH's payraises and funding....something....probably his 401K.

Ask away! What did I leave out?

[Kris10Leigh]

Oh yes! Just remembered! DH's church job which he JUST started actually pays $700/mo. I told him $600 would go to CC's but the remaining $100 was his to play with. The dear man has agreed to invest it! So...

We have $100/mo to do something with investmentwise. 401K????
Additionally every payraise will be invested.

Or should we wait until that monstrous debt is paid down? It bothers me tremendously that he has no retirement money right now so we would both like to invest something.