Financial Planners

[DonandBonnie]

We got some advice from a Dealer yesterday. He said that several of his customers have used a Financial Planner to get expert financial advice on how to best transition from the stick house to fulltiming. I don't have the first clue on how to choose a planner. Has anyone had any experience in this area?

[Okie Guy]

I am happy with the services provided by both "Vanguard" and "Solomon Smith Barney."

[stiles watson]

I must say that I am totally unable to see the value in using a financial planner in determining how to transition from stick house to fulltiming. I would venture to say that it would be hard to find an active FP that had any experience in such a transition.

It seems to me that one has to determine what monthly resources are available (income) and compare that to expected monthly expenditures (budget). Financial planning may be helpful in determining income and preserving your capital base so as to insure those resources are sustainable over time. Perhaps that is what you are needing assistance with.

How to transition out of a stick house and into fulltiming might be best understood from information gleaned from those of us who have done it. We would be happy to weigh in on any question.There are some 72 fulltimers listed on this site. A question about a private matter could be asked over PM or email to one or more of those folk.

[DonandBonnie]

Stiles,
"What we have here is a failure to communicate." I love that line. Someday I hope to be able to overcome it.

What I should have said was that the advice to obtain a financial planner was based on the potential to preserve capital in the transition. I agree that a planner would probably have no clue about fulltiming. That is why I rely on the advice of the folks in this forum.

[stiles watson]

I just love it when I answer a question that ain't asked. Cheers!

[FulltimeFollies]

Financial Planners? Are those the people you pay to spend your money?

[sreigle]

We "interviewed" several financial planners. They will do a sit down with you to talk over your goals, etc., and their approach to planning. We talked with two or three before we found one we felt very comfortable with. And who seemed both knowledgeable and interested in our goals and financial situation. At the time he was with Edward Jones. When he moved, we had the choice of transferring to another EJ associate or going with him. We went with him and continue to be pleased with him. He has also invested my money far more wisely than I could have done myself.

One thing I found is some planners seem to reply on nothing other than computer financial models. With the results of some of those things I could never probably ever retire, much less at 55. Mike uses computer models, too, but factors in the real world. He had me sit down and gather all of my financial information regarding how we spent our money. Fortunately I already had that info in Quicken. He had me estimate how each category of spending would change, what we would need, etc. He factored in the usual inflation factors, and computer models. I liked this approach and it has worked well. On April 5 I complete five years of retirement.

If any of you have money in IRA's or 401K's or similar instruments that say you cannot draw before age 59 1/2 or you incur a 10% penalty, there is an exception. It's called the 72T provision and is what I used to retire at 55.

Roll your money into one or more IRA's. I recommend at least two. One for your primary and one for unexpected true emergencies. The reason will be apparent in a sec. With the 72T provision you can begin drawing from the IRA at or after 55 but you MUST draw "substantially equal payments" for five consecutive years or age 59 1/2, whichever is LATER. If you violate that provision they will go back and collect the 10% penalty on everything you have drawn from the IRA. In other words, no raise for five years. That's why it's a good idea to have a second IRA or a second source of income of some kind. If you are forced to draw more money you could do it from the second IRA. You'd pay the 10% penalty but only on what you draw from that IRA. Not from the primary one, assuming you don't violate the provision on that one. If your second source of income is regular after tax investments or other sources, then no problem.

I hit the 5 year mark in May and will give myself a raise at that time.

[William H. Collier]

Financial Plannner, this is a very familar topic to me, I am married to one. Steve, I am sure she understands what you just said but I dont. I do know she is very good at what she does and is as tight as the bark on a tree. I can also say that good ones are few and far between. If they dont make there clients money they arent in business very long. As Steve said, a little research before one jumps in is prudent.
Bill

[Montana Sky]

I 2nd Vanguard. Also check out Mad Money on CNBC, Jim Cramer is amazing!!!

[snfexpress]

Just a thought, here. I am a mortgage broker, who among other activities, invests in "private loans". We are semi-retired, meaning we are somewhere between longtime and full time. Actually, more full than long.

Since my luck in the stock market has always been, well, crappy, I stick to what I know. That is loans on real estate. Since I don't have a retirement plan, and even if I did, I couldn't draw from it, since I'm 44, our ability to travel this great country is from our investments, which are 12% loans on real estate that most banks would not make. This causes some degree of risk in that if a foreclosure is necessary, the cash flow will cease, and when the property goes to sale, you want to make sure that your investment (the amount you loaned) will be repaid from either the sale of the property or from someone bidding more than you are owed (obviously the other bidder believes there is more equity in the property).

We have quite a few of these private loans and try to diversify in the area and the amount, thus trying to minimize non-payment (read, cease of cash flow).

If you are interested in this type of investment, look around for a good mortgage broker (notice I said "broker"), who does private loans. Once you have the list narrowed down to a handful, call the state compliance division and ask them about their "reputation" and if they have been sanctioned.

We have been doing it for more than 20 years and have a spotless record, of which I am very proud. We're not in the market for any new "investors", since we have more than we can handle, presently.

So, what is the next step? If you want to longtime, then choose a state that has no income tax. You can make this state your domicile if you spend more months in your Monty than you do in your stick house (thus making your stick house your "second home").

By doing this, you can realize a significant increase in income (vs. the stock market), and minimize your overall tax liability.

As a rule of thumb, I calculate the amount of money we have out ("loaned") x 1 % x 75%. The 1% is what we make monthly, and the 75% accounts for foreclosure time and the time that the money is not out. Now, if the amount you have to loan meets your monthly expenses, you can longtime more and more. That is what we are doing.

We will sell our primary stick house to accumulate more cash to loan now that we know that this is the lifestyle we wish to pursue. We will keep our other real estate investments until such time that we either need the money or cannot deal with the headaches.

If you have any questions, I will try to answer them.

[ols1932]

My financial planner spends my money. She plans well and spends well!

Orv

[MAMalody]

quote:Originally posted by DonandBonnie

We got some advice from a Dealer yesterday. He said that several of his customers have used a Financial Planner to get expert financial advice on how to best transition from the stick house to fulltiming. I don't have the first clue on how to choose a planner. Has anyone had any experience in this area?

Try these:

Chartered Financial Analysts, CFA Institute: http://www.cfainstitute.org/index.html

Certified Finanial Planner Board of Standards: http://www.cfp.net/

These are two of the best organizations out there. There may be others but these should get you started. They both are able to give you criteria on what to look for. You might also e-mail the poster who said that was what his wife did. She may be able to give you criteria to look for or even help you out.

I hope this helps.

[sreigle]

Stiles, I don't think your question is really that far off-base. In my case, it wasn't for transitioning from a stick home to fulltiming. I was looking to retire early and shift our lifestyle from working to retired with a stick home to fulltiming. I needed some confirmation that my plan would work, financially, and that the money would hold out. I also needed someone I trust to invest my money since I took my pension in lump sum. There is no monthly pension check, so if I screw up the investments I'll end up living under a bridge! In other words, I was astute enough to know I don't know enough to do the investing myself. And I needed someone I trusted to tell me my plan will work. Hope that helps to clarify.

[richfaa]

We fail the primary test for having a financial planner..having finances..We do our own planning..We look at the $ coming in and the bills to be paid and if there is 1.98 left at the end of the month we done good.

[patodonn]

Steve: We've seen a few really nice areas under various bridges..I've marked down a few for reference if everything goes "South" Willing to share the info....LOL

PJ

[BirdingRVer]

One thing is to make sure you understand how your Financial Planner is getting paid. High commission annuities, brokerage accounts and mutual funds can strongly influence where he\she thinks is the best place for your money.

[Cat320]

I don't see the relationship with full timing and needing a FP or retiring and doing something else and needing a FP. The requirements are the same.

[bigmurf]

Wish I had met our Financial Planner 20 years ago. I do expect him to get paid for his work. That being said he has made more money for us then we started with. Nice to know that we are not getting poor too fast.

[Retired Pilot]

Cramer is amazing-yes. Check out his daily disclaimer on front running and self serving. Everyone on General Electric CNBC is serving a special master and it is not you.

[mobrownies]

Lots of good advice in those posts. I think it is prudent to have some planning ability yourself and there are a number of good books out there (I like Andrew Tobias). We did our own planning, used several of the programs available on line at MSN and Fidelity, then for some peace of mind got a free opinion from an A.G.Edwards FP. He had some good points and some not so good, but I might not have known which was which without some basic knowledge myself. Good Luck