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Old 02-08-2018, 03:34   #31
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Re: Seeking Financial Advisor specializing in early retirement

Originally Posted by barnakiel View Post
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.


A $1M portfolio can be expected to generate ~$40k/year (and that may be aggressive depending on a number of factors such as age etc). That's not "rolling in the dough" to me (being only about 2/3rds of the median household income). Far from "rich" at least. At $3M, you're looking at ~$120k/year, which most people would call an upper-middle class income in my opinion.

There's a big difference between having $1M and "making $1m/year"..
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Old 02-08-2018, 03:38   #32
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Re: Seeking Financial Advisor specializing in early retirement

Just my two cents. No financial adviser is going to care about your money as much as you do. To say that you're too busy to manage your money is unwise, in my opinion. Find the time, and decide what's best for you, rather than letting someone else do it .
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Old 02-08-2018, 05:11   #33
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Re: Seeking Financial Advisor specializing in early retirement

The title of an old book on Wall Street and its doings is also the only question you need to ask a prospective financial adviser ;

"Where are the customers' yachts?"
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Old 02-08-2018, 06:40   #34
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Re: Seeking Financial Advisor specializing in early retirement

Financial planners and money managers are an outdated business model. I have had a lot of experience with both for the last 15 years and my conclusions are that they are both a waste of time. I retired early and am also involved in the management of several trusts with large pools of capital.
First off I have never met a money manager that can consistently beat the market indexes over time.
Second the first thing a manager will do is ask you a bunch of questions about your goals and then, based on your risk exposure plug you into a computer model
that is conservative and covers the legal requirement for them not getting sued. This recipe will, after fees perform very poorly over time.
Three, fees will kill you. Your chosen financial advisor does not work for free so you are going to pay a lot of fees to support this bad performance.
The S&P 500 has returned 8% since it started, if you cannot find (and you won't) a manager who can agree to do better than that then why do you need them.
Warren Buffett's advice to the average investor is to buy something linked to the S&P 500 and hold it forever. There will be ups and downs but 8% is a very good return.
With my own money I have educated myself to the financial markets and do my own planning. It took some effort and a lot of time in the beginning but I am retired and it was worth it to beat the shitty returns of a planner. I am a non resident Canadian and this allows me to legally not pay any taxes, an option which is not available to U.S. citizens who are required to pay taxes, under most circumstances, forever no matter where you live. Not paying taxes on your income increases your returns by a huge amount. If you live in the U.S.A or Libya, the only two countries that still tax their citizens on world wide income, then taxes are going to matter and you will need a tax advisor not a financial planner.
Hiring a money manager is not going to guarantee you will not lose money, or even worse lose your capital. Someone bought all those mortgage derivatives in the last recession. You just have to pay fees on top of the loses.
Wall Street is just a big casino and the house always wins. Educate yourself, do some reading, keep it simple it is your money and no one has more interest in seeing you hang on to it than you do.
Hiring a money manager is like asking the casino to show you how to win, not going to happen. They are just going to charge you fees to show you how to lose.
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Old 12-10-2018, 11:32   #35
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Re: Seeking Financial Advisor specializing in early retirement

This is an older thread, but I'm sure other cruisers are trying to do this, so I will weigh in. I'm a professional economist, but not a financial advisor.

First, your goals of 'having your assets work harder for you' and 'retiring next year' are in conflict. If you are going to start living on your asset income, your wealth needs to be invested in something with a modestly risk free return, and those returns tend to be lower. Otherwise, you'll be back in the labor market as soon as there is a market downturn.

If you are retiring next year, the best way to 'make your assets work harder for you' is to lower your cost of living to meet your income stream. The easiest way to do that is to leave the U.S. and move somewhere with a lower cost of living. Alternatively, stay in the U.S. but go into semi-retirement - working part-time to increase the cruising kitty for longer sailing trips, living in a cheap livaboard marina the rest of the time. (This semi-retirement option is harder outside the U.S. due to labor laws.)

Second, the individuals in this thread telling you to stay away from financial planners are right - for most upper income people a financial planner is unnecessary and even detrimental. Actively managed portfolios have higher fees and lower returns than passive index funds. Tax avoidance schemes are also not worth your time - you can more easily and safely avoid higher taxes by leaving the country yourself and establishing residency elsewhere.
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Old 26-10-2018, 11:51   #36
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Re: Seeking Financial Advisor specializing in early retirement

Wouldn’t a FA who specialized in early retirement be ................. retired

I have only dealt with 2 FA and they both were old. I asked each why I should take their advise considering how it wasn’t working for them. Got a bs answer each time.
It is OK if others want to do it different on THEIR boat
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Old 26-10-2018, 12:10   #37
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Re: Seeking Financial Advisor specializing in early retirement

rourkeh in above post got it right. Fees will kill you.

Work off 8 % p/a return, so can handle couple years of underperformance, then add bit of volatility income, like selling options on your stocks. So this may add another 1%.

And then if you been around, and have guts, buy when blood is on the street. This will add another 1-2% p/a.

So you have 10-11 % p/a and then work back what your usage is, and calculate required capital.

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