Seeking Financial Advisor specializing in early retirement

[Dulcesuenos]

I too retired this year at 44. While no financial expert, Our plan was/is owning properties, helps if you have a trustworthy not too expensive company handle the renter's, repairs etc,, private lending (only the Interest is taxable not the principle,, helps with aca big time) I.E holding mortgages, these cover us the next 15-20 year plans really well, beyond that we have Roth ira's and 401k's to cover us.

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[Mystic38]

Actually, you do need to be wary of financial planners.. they are decent for anyone with a traditional life..ie you work, you save, you get old, you retire, you live to be 84yo and consume 4% of your portfolio per year...and then you die...

If you have unconventional circumstances, ie bailing on the rat race at a decent age, then they are pretty much out of their league.. and they will try to force cliche over-complicated solutions to a problem that is quite simple...but just different.

I have been passively managing my own portfolio for over 15 years when i bailed the rat race.. and its not hard.

[HBWT]

Originally Posted by Mystic38

If you have unconventional circumstances, ie bailing on the rat race at a decent age, then they are pretty much out of their league.. and they will try to force cliche over-complicated solutions to a problem that is quite simple...but just different.

I have been passively managing my own portfolio for over 15 years when i bailed the rat race.. and its not hard.

I am sure the original poster would appreciate any in site you may have on this easy "passive" management you have discovered. Well at least "passively tax sheltered" as was requested in the original post. Gosh, i'm curious also. If you have figured this out, write a book. You will be a millionaire overnight and all of us financial planners can find a new line of work. Way to many smart people have not figured this out yet. I'm a financial planner so you know I am not that smart.

I guess you could use that line of thinking for any job ever created. For Example: Don't hire (Any Job Field Here) they may be decent at traditional work but anything unconventional, they will be out of their league. I love painting with a broad brush also.

Keep up the good work. CF would be boring without you.

[belizesailor]

Originally Posted by Dulcesuenos

I too retired this year at 44. While no financial expert, Our plan was/is owning properties, helps if you have a trustworthy not too expensive company handle the renter's, repairs etc,, private lending (only the Interest is taxable not the principle,, helps with aca big time) I.E holding mortgages, these cover us the next 15-20 year plans really well, beyond that we have Roth ira's and 401k's to cover us.

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Rental properties and mortgages are good options, better yet hold the mortgage on the rental property and get cash flow from both (for example if property held by a patnership).

Multifamily has much stronger cash flow potential than single family.

The down side to rental properties is that they can always become a problem. Professional property management goes a long way to preventing this. Buying into syndicated real estate deals removes you one step further from day to day operational issues.

[belizesailor]

Originally Posted by HBWT

I am sure the original poster would appreciate any in site you may have on this easy "passive" management you have discovered. Well at least "passively tax sheltered" as was requested in the original post. Gosh, i'm curious also. If you have figured this out, write a book. You will be a millionaire overnight and all of us financial planners can find a new line of work. Way to many smart people have not figured this out yet. I'm a financial planner so you know I am not that smart.

I guess you could use that line of thinking for any job ever created. For Example: Don't hire (Any Job Field Here) they may be decent at traditional work but anything unconventional, they will be out of their league. I love painting with a broad brush also.

Keep up the good work. CF would be boring without you.

While maybe a bit broad brushed, he does raise a valid point. Ive experienced similar issues with financial services, insurance, etc, because my life style and financial situation dont fit in the standard brown box.

You can use it to your advantage though, Ive gotten better service from some because my scenario gives them some relief fom their usual routine.

[daletournier]

Originally Posted by Paul-Arr

Can anyone recommend a financial planner or advisor that:
You have personal experience with
Is fee-only (versus percentage)
Is specialized or otherwise very knowledgeable regarding non-traditional (very early) retirement

We aren't sure that our assets are working for us as hard as they could be so we want some guidance.

There seems to be a lot of great internet info on managing assets yourself, but in our case our time is better spent making the money than managing it. Most financial planners seem to be percentage based (and therefore may not be in my interest) or they just give me a used car salesman feeling. I'm hoping that one of you in a similar situation already found an advisor that has all the latest and greatest tricks to maximize investment performance and minimize fees and taxes.

For those that may say 'we need to know more to be able to answer/help'... Wife and I are in our late 30s, higher income, no kids, no unsecured debt. We are 1 year into our plan to sell everything, quit our jobs, buy/refit a boat, and ship out by 2019. We'll sail around as long as the money, relationship, health, or our interest last.

Thanks!

Hi, with respect the time managing your money is more important than your time making (working) money, done correctly you will end up further ahead Ie.working on a business rather than working in it. I say this humbly, im 48 retired at 38 and are recieving more now than back then. Time taken to understanding money, how much you need and the environment (financial) is essential.
Personally I wouldn't trust my finances to a financial planner, they just cant care about your money as much as you do , its your responsibility.
Right now I believe its a good time to have a majority of assets in what I consider hard assets, for me that is income producing real estate, precious metals and cash. Its a time to be defensive not offensive. Often financial advisors feel pressure to always be producing a good return for their clients when sometimes preserving capital is the best return. Don't get me wrong there's a time to be aggressive, in fact I am right now, but in a much different way than the conventional financial planner way.
One other thing, how do you determine a good financial planner from a bad one? Since 2011 hasnt everything gone up? So aren't they all good?
I think to many complicate these matters , understanding fundamentals is paramount. In regards to tax, focus on the making of money not the avoiding of tax. My experience is there isn't many ways of reducing tax, ok you can put alot into superannuation etc, but I want my money to use now not at 65 (if its there). The tax department has been thinking about this longer and harder than you.
My views are just mine....that's my disclaimer.

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[chowdan]

Hey OP,

There has been an incredible out of good information posted on here.

I would highly recommend reading jlcollinsnh stock series and boggle heads.

I am only 26 and my SO is 23, however we are sitting on a nice piggybank of money, not millions by any means but enough to significantly boost our FIRE ability and be set for life if it is invested right. We received it about 7 years ago due to a series of unfortunate events. Due to the age when we received it, we invesyed it with a family members stock broker(2010) and held it with him until 2014.

He had generated enough returns to cover his fees(% based) and pay for my SO share of bills for the 4 years while she was in college. He was a stock broker, and when we would meet with him, he would often make this very clear. Every time Wed meet, he'd often spew the same crap over and over. It was obvious he had a schpeial that he'd tell people.

Well 2015 was a new year for us, we dumped him when we realized stock brokers do not have any fiduciary responsibility(legally) and due to the market timing, we figured it was time.

I don't like name dropping businesses(unless specifically asked) however we transitioned to a fee only registered investment advisor(RIA). All RIA's are in a db that is publically available, for free, and all of them by law fall under the fiduciary responsibility. IE: they are required to do things that are in your best interest.

I have been very happy with the way our advisor has been, granted performance has been mediocre due to the market itself being pretty stagnant. I review the account monthly at minimum and my mentality aligns with theirs so I am happy with the way we are positioned.

To give you an idea, my SO want to be FIRE in the next 15-18 years, our combined income is in the 6 figure range. We live reasonable, though we are working on reducing expenses to better our savings. We have told our advisor our plans, and they know we want to take 1-3 year sabbatical starting 2020 at the latest. As such we have 70% dedicated towards long term high risk/reward strategy, while 30% is stuffed in an account to preserve capital for our sabbatical leave. This 30% not expected to grow much and is positioned so we have cash on hand for special cases like if we maybe buy house or medical issues, and if we choose to set sail, it will be the funds we have for the trip.

I would be happy to name drop their website, either here or in a PM. I would just recommend finding only RIA's to work with, meet them, talk to them(often it's free) and go with who you believe has similar mindsets and concepts as you.

Note: i have no gains from providing their info except for the fact that I've been a customer for a year and have been satisfied with their service and will continue to stand by them.

[David Hughes]

Originally Posted by ol1970

First piece of advice, do not get a financial advisor. .... Fees will absolutely crush your long term performance period end of story.... you are taking 100% of the risk and making your advisor wealthy in the mean time. It is a heads you lose tails they win scenario.

I totally agree with everything said here. I've talked with many financial professionals over the years and I find that, although I am just an amateur, no one actually knows my situation or has as much passion and personal interest in me, as ME! At the big levels of money, the pros are awesome I'm sure, and worth it, but for just upper-middle class folks in the $3-5M range of assets it's just not the same. We are the perfect suckers for their game. We get junior partners or entry-level CFP's, or salesmen types, and I guarantee I make more money and have more life experience than those types. Instead, do your reading, make a plan, build a spreadsheet and forecast for your budget, and follow the guidance in the many good books and web articles out there. My favorite recently is Wes Moss's "You Can Retire Earlier Than You Think". Diversify your income streams from several sources and let 'er rip! Enjoy!

[barnakiel]

It is OK to look for a financial advisor that is a nice person and that we actually like interacting with. But this is just one part of a larger equation. For we hire people like advisors to serve us as tools, and tools are measured by real world performance.

So then this boils down to seeing the performance of an advisor against the backdrop of the market and, possibly but not necessarily, against performance of other advisors.

So the first thing you notice when you walk into their office is you either develop a link with your advisor or not. This link may translate well into your advisor sharing risk preferences with you and so the person may be a natural for your specific needs, or not. You may run into a very proficient, very aggressive kind of advisor who will always try to maximize return while optimising volatility (risk, in financial terms). Or else you may find yourself with one that will promote minimising volatility while optimizing return. Will these two come to the same conclusions regarding your actual optimum choice of investment portfolio?

And the above is just the tip of an iceberg. Do not get trapped thinking this iceberg counts for much.

Now as you look at performance, one will quickly notice that professionals of exceptional performance expect to be exceptionally (well-) paid for their performance. An advisor that may in a good year deliver an above average (above market) return will expect an above average (above his peer advisors) share in the extra gain. And in a bad year the same advisor may come back with a loss that is less than the average (the market) but they will still expect a higher than his peers share in - exactly: what?

So these are just musings that could be a subject to en endless and pointless debate. Do not get trapped in such debates.

For it is an exponential equation of the multifactor type: there is you the client, your cash and your risk preferences and your investment goals, then comes the advisor: their skills, experience and luck, then is the market, its volatility, its complexity, its unpredictability.

Nobody knows the actual outcome, hence the risk. Do not get trapped with the equation and its complexity.

So my takeaway is: look for an educated, skilled and experienced advisor, set goals and start tracking. That simple.

Whether you like the guy or girl may make you feel better but is no guarantee of reaching your financial goals. The same applies to the one you do not like.

Cheers,
b.

[pickpaul]

Originally Posted by David Hughes

but for just upper-middle class folks in the $3-5M range of assets

My morning coffee nearly flew out my nose when I read this :-) You may want to think of yourself as middle class but with that range of assets you are rich by any reasonable measure!

[barnakiel]

Yep. Some rich people will be that modest.

Middle class are not million dollar clients. Middle class are people with mortgages and kids at a uni. A big house, not quite theirs, and a boat, maybe when the house is sold. The more affluent ones can actually keep the house while cruising.

Then again think of the perspective. The poster may be from the US, Monaco or Luxembourgh. With M3+ in assets, they may still belong in the working class, while flying business and sailing Wallies.

;-)

Cheers,
b.

[CroMacster]

FIRE is simpler than most people make it out to be. Financial planners can help you figure out the logistics of certain strategies, but ultimately it comes down to spending waayy less than you earn. 50% savings rate should be considered a minimum if considering retiring early. Maximizing tax advantaged accounts (401k, IRA) and typically pretax options over the Roth. And choosing low cost index funds available at Vanguard or Fidelity and the like.

Some people choose real estate, which is a viable alternative to passive investing, but requires much more hands on and work.

As suggested I would check out Jim Collins
Stock Series

Madfientist also has some good articles on early retirement and investment strategies.
http://www.madfientist.com/

Mr Money Mustache is also a good resource for strategies and moitivation.
Mr. Money Mustache — Early Retirement through Badassity

[chowdan]

I will agree with barnakiel on some things.

I think having an advisor can be a great starting ground but should not be used on the long term, regardless of your skill level or not. It is similar to things like "robo-advisors" and people who use them for things like IRA accounts. Not only do you pay the robo-advisor fee but you also are paying a fee on top of the index/etf fees. Your better off just going direct to Vanguard and opening an IRA account there and just eliminating the advisor fee. They are good for figuring out "where" you should be investing based on their questionnaires!

I have a vanguard account and this account is the account where we push our "monthly" savings for us to personally manage. The reason we have our advisor is because due to the amount of money, my lack of confidence in my decisions(the SO does not want to think about it, so I'm left holding the bag) in terms of investments, I have figured it would be best to have the sum from our monthly addition go into an account that I manage and maintain. This will give me experience, significantly decrease the potential loss I can do to our accounts all while learning(more like gaining confidence in myself and abilities) what is needed to manage my own account.

I have invested in stocks and played a with it over the last 6 years(when i moved back to the USA). I did fairly well, however like stated in another post, the market has been in a good run, so just about anyone will make money. The best I did was in 2013 with a 31.2% gain for the year, while the worst was 13.5% loss for the year(2010 - "learning experiences"), however averaging out the gains/loss over the last 6 years(2010-2015) I am at 6.9% per year. Close to the performance of the market(Dow is at 9.26%). End of 2015 I transferred from stocks into index funds due to lower fees, less headaches and easier investing methods and a greater allocation of stocks.

I do believe having an advisor is good for some people, at least RIA's rather than brokers. They can definitely help optimize your tax situation, or at least give you guidance on if it is worth the effort and remember RIA's have fiduciary responsibility, so they are required to speak the truth by law, which gives me at least some sense of "safety". They will also be able to help you out in other things beyond asset allocation or investing. For example being 26/23 and having a high income, having someone there that we can go to, to discuss not only our budget, but to have someone analyze it to see where we overspend to help grow our account value to align with our future goals.

RIA's have their usage and benefit, and you have to remember you are paying them for their service, just like you pay for internet, tv, phone service etc. Not everyone needs a phone, internet, tv, a car, or even own a mortgage(you don't own the home, you own the mortgage and that is it). No one is the same, no one has same situations, and no one definitely can't tell you where your golden path is.

I find having a RIA is a huge benefit to me and my SO. He has given us ideas and has helped us reign back our spending(its amazing what going from surviving on $40k/year for 2 people to going above $130k/year will do!), and has helped us achieve 55% savings rate(our goal is to get everything paid off and get our savings to 70% of our combined income).

That being said, I am planning to withdraw the funds and manage the accounts myself, however in my view having a RIA(one who has fiduciary responsibility for their clients) right now is well worth it as they are more than just "managing our money". Managing our accounts is their primary focus, but the added benefits are what I like having. In 4 years or so I will probably start the process of pulling funds away from them and into my own managed account.

[SeaToSkye]

Originally Posted by Paul-Arr

Can anyone recommend a financial planner or advisor that:
You have personal experience with
Is fee-only (versus percentage)
Is specialized or otherwise very knowledgeable regarding non-traditional (very early) retirement

We aren't sure that our assets are working for us as hard as they could be so we want some guidance.

There seems to be a lot of great internet info on managing assets yourself, but in our case our time is better spent making the money than managing it. Most financial planners seem to be percentage based (and therefore may not be in my interest) or they just give me a used car salesman feeling. I'm hoping that one of you in a similar situation already found an advisor that has all the latest and greatest tricks to maximize investment performance and minimize fees and taxes.

For those that may say 'we need to know more to be able to answer/help'... Wife and I are in our late 30s, higher income, no kids, no unsecured debt. We are 1 year into our plan to sell everything, quit our jobs, buy/refit a boat, and ship out by 2019. We'll sail around as long as the money, relationship, health, or our interest last.

Thanks!

I work at a pension consulting firm. It sounds like we are advisers but we are third party administrators for retirement plans. We do, however, have an independent company on retainer for the employees here who are wonderful financial advisers that are fee-based. They were very helpful and allocated my assets for my portfolio to best suit my financial goals and needs. They also re-allocate assets depending on market fluctuations so they are very involved. I would highly recommend them. The firm is Billeter Wealth Management and their contact number is 509.892.3512. Bruce is the president.

And just to be clear, I do not receive any sort of benefit/deal for recommending them. I just think they're awesome

[jlcnuke]

Originally Posted by Paul-Arr

Can anyone recommend a financial planner or advisor that:
You have personal experience with
Is fee-only (versus percentage)
Is specialized or otherwise very knowledgeable regarding non-traditional (very early) retirement

We aren't sure that our assets are working for us as hard as they could be so we want some guidance.

There seems to be a lot of great internet info on managing assets yourself, but in our case our time is better spent making the money than managing it. Most financial planners seem to be percentage based (and therefore may not be in my interest) or they just give me a used car salesman feeling. I'm hoping that one of you in a similar situation already found an advisor that has all the latest and greatest tricks to maximize investment performance and minimize fees and taxes.

For those that may say 'we need to know more to be able to answer/help'... Wife and I are in our late 30s, higher income, no kids, no unsecured debt. We are 1 year into our plan to sell everything, quit our jobs, buy/refit a boat, and ship out by 2019. We'll sail around as long as the money, relationship, health, or our interest last.

Thanks!

Despite being 100% "DIY" on my investments, I'm going to say that you're being smart in looking for a fee-only financial advisor. There are only a set number of ways to minimize taxes and you should be able to discover what methods are applicable to our situation with a 1-time session (that will most likely apply mainly to where to put what type of investments to maximize tax efficiency, though it could include other things depending on your situation). As for "tricks" to maximizing returns, there really aren't any. Establish a low-cost portfolio in-line with your risk tolerance and you're pretty much going to be there. There may come a day when actively managed portfolios are reliable at "beating the market" but that day isn't here yet, so diversification in low/no-cost index funds is going to win 99.99% of the time for 99.99% of people.

Of additional importance for you is ensuring that the advisor you choose understands how to best access your various accounts during ER prior to traditional retirement age.

Now, you can learn all of these things and figure it out all by yourself with relatively little effort, so I hope after you eventually meet with an advisor you DO take the time to learn this stuff and self-manage (it really takes very, very little time per year once you understand what you're doing).

FWIW, I have my degree in business with a concentration in finance and have been managing my own investments forever and assist others with their finances and investing, and I plan on retiring in ~6 years at 47, maybe sooner or later depending on market performance. I got a late start though as I thought I'd have a military retirement so wasn't concerned with saving money until my 30's when that option went away.