Seeking Financial Advisor specializing in early retirement

[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!

[belizesailor]

Very hard to find a good FA, most are just salesmen masquerading as FAs. Agree on your starting premise though, look for the pro FAs who charge a fee for service and have nothing else to sell you.

And, if they are so good...why are they still working?

My accountant /FA is quite good, but not taking new clients (soon to retire).

[Gadagirl]

How to Find a Financial Advisor, Step by Step | PBS NewsHour

[SV THIRD DAY]

I would goto the Dave Ramsey website and look for one of his endorsed local providers ELP. They will all be fee based and ascribe to his philosophy, which has worked well for us.

[barnakiel]

I am not sure it is too difficult to find one.

A person with CFA/CFP certification can do what you want. Google up CFA/CFP associations nearby, find accredited memebers, contact a handful and interview them for a job.

A one night stand is very common when people just walk in and request an advice and they pay for it. Very, very common with freelance professionals (not with those working for institutions though). Beware - it is a relatively expensive service. Nothing like fixing a bad tooth or cutting your grass.

Better yet, check you family and friends circles for one. A final years investments student may be of help too, but they will lack experience. It is good to hear not just what might work and what the books say but also what the people who have been in the market for a time say.

(For a time, in this job, is about 20 years, less if the person is very bright)

I used to work in this field prior to my early retirement so I can assure you there are hundreds of them in every bigger town. Thousands in big cities.

Cheers,
b.

[wsmurdoch]

There is sister forum that I followed for years before retiring early myself. If you haven't been there yet, you might take a look. One of the founders, Dory36, was also a sailor.
Early Retirement & Financial Independence Community

[arsenelupiga]

in reality you can have only 1 of 2 options

maximize investment performance

OR

minimize fees and taxes

go for "maximize investment performance" and request past performance records. Likely you will find noone that can provide you with satisfactory audited past performance.

good ideas are guarded & hidden pretty well.

gl

[ol1970]

First off congratulations for you and your wife putting yourself in such a good place to have the opportunity to retire early.

Ok, so I "retired" at 43 so I can speak from some level of experience here, but take this for what it is worth...some dude you'll probably never meet typing something on some random sailing blog.

First piece of advice, do not get a financial advisor. Full disclosure, I have had one because I too was too busy earning a high income to worry about managing my dollars that I was saving. Now my financial advisor is a long time friend, and I absolutely believe he has my best interest at heart...but I wish I knew at 35 what I now know at 45. Fees will absolutely crush your long term performance period end of story. No manager will consistently beat the simple performance of the market index fund over time. OF course there may be an outlier of a couple years, but do not believe the hype. There is a great book called "where are all the clients yachts?" written well over 50 years ago...basically the premise is 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.

Now I am in the process of scaling back my holdings with my financial advisor to simply those types of investments that are only accessible to accredited investors and are non market correlated. (MLP's, Debt Service, REIT's, etc.). They also manage a bond portfolio of which I only purchase the bonds themselves, not a bond fund. This is important, because if/when interest rates rise you will get crushed if you are in a bond fund. If you own the actual bond, the mark to market goes down but you do not care because you are holding it to maturity. Now this will come into play when your portfolio is of a significant size where no single bond that you hold makes up more than 5% of the total basket of bonds held.

As somebody who is down the path of what you want to do what I would say is simple. First read J.L. Collins "A Simple Path to Wealth", it will explain to you in plain English investing and general life money lessons that are very eye opening yet simple. He also has a blog you should check out as well, I wish it was around 20 years ago...I would be way better off than if I had the "help" of a financial advisor. Luckily for me my earning ability and investments I made in believing in myself way outpaced my spending and also the markets. Basically you cannot afford not to educate yourself, it will literally cost you millions. Open your own Vanguard account...jump in, keep contributing, don't look at it, wait, and the magic of compound interest will occur. Advisors will prey on your fear of losing money and tell you about risk mitigation, which at a certain point you need to consider but not until you are up into the multiple millions of investable assets. At the end of the day you either believe the end of the world is coming or not, I for one thing 10 years from now everything is going to be higher, if not we have bigger things to worry about. Be a long term investor & stomach the downturns, your future self will thank you.

I could ramble on and I'd be remiss if I didn't also mention that the biggest thing I didn't consider when starting my journey to financial independence was focusing on what amount I really needed. A life well lived is actually not very expensive compared to the consumerist lifestyle we are brainwashed into thinking we have to follow. Work on your cash outflow as much as you do your inflow. Good luck and PM me if you have any specific questions.

[Brob2]

ol1970 provides some very good advice. I would only add that it is wise to alter the mix of your investments as you age- don't let a stock market devaluation kill you late in life, and keep a few dollars in overseas investments.

I spent much of my career in retail banking, including managing financial advisors, and generally found the most successful ones are not people I wanted to spend much time with. It's a business that does not attract the best and the brightest with high ethical standards. IMO.

[m2244]

And on a related note, I'm looking for a "retire early" advisor. Are you available?

Either that or a sugar mamma.

[Paul-Arr]

Thank you all for the responses.

My/Our long positions are in excellent shape - risk optimized and growing - and we continue to add to them. Not concerned about those.

Our liquid and short term (say, less than 5 years) assets are the reasons we are seeking a financial advisor. And taxes...so much taxes. So, I want an advisor (be that a CFP/CFA, tax attorney, CPA, et al) that can help me get into the right scenarios to shelter income and put cash to use in ways that maximize by bottom line. For example, maybe I should setup a certain type of trust, invest in a certain type of real estate in a certain location, start a certain type of company, buy the boat sooner rather than later, etc.

I knew this forum, given the shared goal(s), would have some experience with this sort of scenario. Most outside forums like this think it's crazy for an american to retire before 65 and I would like to go around that conversation whenever possible.

So, again, thanks everyone,
-Paul

[ol1970]

Paul,
As far as the intricate detail of tax planning and tax avoidance I do not claim to be an expert, but I can give you one piece of advice that one of my mentors gave me a long time ago. "some of the worst financial decisions you can make are those trying to avoid paying taxes" I did not quite get that until later in life, but it goes along with people telling you that you should have a million dollar mortgage for the "tax deduction".

Anyway, yes there are some definite tax smart strategies you can use, but I would sort of need to know more details. What I have done to set up my retirement income is structure my spending on my muni and corporate bond portfolio along with some real estate holdings. The bulk of my net worth is in diversified assets to basically hit singles and slowly go along with minimal risk. I'm in the don't blow it phase, not the accumulation phase though. It is extremely tax efficient, but mostly it probably just seems like it to me because I'm no longer in the max tax bracket paying and then paying $40k a year in Obama care tax on top of that already ridiculously high tax rate already. LOL ok that part admittedly really irked me when I was working.

If you will have income, I suggest looking into establishing residency in places like Puerto Rico where in certain cases you can be exempt of federal income taxes as well. Also, if you happen to find a guy that can hide income and produce out of this world results...I'd probably run the other direction because you'll most likely find yourself watching an episode of "American Greed" one evening and see that your advisor has split town with all your money lol.

[pickpaul]

I'd suggest asking potential advisors of their experience with cryptocurrency investments. Bitcoin should be treated in a similar way to gold by holding a small % of net worth as a hedge against fiat based assets. There's a learning curve and a lot of advisors and family offices are ignorant on the topic.

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[SaltyMonkey]

Just go to Vanguard and poke around in there.

and do what you want with these:

Invest Simple with Lazy Portfolios - MarketWatch.com

https://www.bogleheads.org/wiki/Lazy_portfolios

[HBWT]

As a financial planner (work on planning strategies and not selling) I would make an assumption that you want your cake and eat it too scenario.

The problem you have is trying to tie your short term investments with a tax sheltered strategy. Although doable (very limited), this is not a "passive" type management with low fees. You are looking for active money management with a focus on muni bonds (FINRA and the SEC will not allow a adviser to put you in risk equity with such short time variables) So you have three options, (1)pay and active manager fees (typically 1% wrap). (2) look down the hedgefund management team (have to be a qualified investor with typically 3-8% fees) Hedge funds are (grey area) SEC and FINRA and can have a equity strategy. (3) Self manage. This is the only scenario I can see that can accomplish your goals, BUT, it will certainly take time to research markets and trends. Understand investment strategies and make a plan. Creating a trading strategy is very difficult because most do not stick with it. A wise person once said, "you are only as good as your last trade."

Oh yea, Trust... not gonna change anything regarding income taxable structure unless it is going to use irrevocably for future heir. The trust just become the tax payer. IT only helps to shelter typically estate taxes (you have to be dead first).

I have a feeling you are overthinking this. Take the hard earned money you have, meet with a CFP fee based adviser, have the 5-50 year plan made, create buckets of income to be available at periodic maturity dates, and go sailing. The last thing you want to do is check your investment performance strategy when you are sitting off Fatu Hiva.

GO SAILING