Retirement Question

bnunn03 · December 2014

Hi! As a goal for 2015, I plan on getting more involved in my retirement. My H and I contribute currently to our 401k through work. My only thing is I dont understand any of it, I find it really boring. I would like to speak to a financial advisor next year, but my question is how do I go about finding one? For all the Dave followers, I looked at his ELPs but tthe only one I found is like 1 hr away(which is odd considering I live in a decent size area). Any suggestions!? I would say ask around from people I know, but I highly doubt many people I frequent with have a financial advisor.

Thanks!!

brij2006 · December 2014

I personally would drive the hour to see the ELP. We're DR followers also and it's worth making sure the person you're investing with will teach you what they're doing with your money and help you understand it.

als1982 · December 2014

I'm not a Dave Ramsey follower, and frankly tend to be a bit skeptical of his endorsements. We have our ROTHs through an Edward Jones advisor that my parents used for many years. He is great - offers good advice and is helpful in analyzing our overall situation and additional holdings including H's traditional IRA and my 403b, both held by other companies. I'm not necessarily recommending Edward Jones, just finding someone knowledgable, who can explain things so that you can understand them, and most importantly, someone you trust. So, I'd suggest hitting Google, and setting up some introductory appointments. Don't let anyone rush you or do anything to make you uncomfortable. You should always be in control of your money and choices.

strickland8052 · December 2014

Before you head to a financial advisor, I recommend learning as much as you can for yourself. That will ensure you don't get taken advantage of. Suze Orman's book "The Young Fabulous and Broke" has a great section on retirement to get you started. Once you start learning, you may realize that you do not want to go the financial advisor route (I, personally am not a big fan of them.)

If you do decide to see a financial advisor, please be aware that there are two types. Some financial advisors are paid by the financial institution that you are going through. These will seem to be "free", because you don't pay them directly. Be very leery of these! They are trying to make money off commission, so they don't necessarily have your best interest at heart. On the other hand, there are other financial advisors that you pay upfront like an hourly rate. These are the best way to go, because they have no alternative motives.

formerlyGDaisy09 · December 2014

I'm not a Dave Ramsey follower...I did a quick search on ELPs...I'm a little skeptical on how businesses and people become ELPs.

We found our finanical advisor based on personal recommendations. Ask around, co-workers, friends, etc. she advises us on everything from home improvements to investments, and she helps us with our taxes every year. our first consult with her was free...to see if things meshed. we like that she takes a wholistic approach to our money, she helps us prioratize savings versus investing (including investing in our home).

hoffse · December 2014

I am skeptical of endorsed financial advisers as well.

I haven't used one, personally, but one thing to check out is whether they charge per hour or by commission. You really want somebody who is charging you per hour, because then they have no reason to try to talk you into investing in certain products that throw off a commission for them.

I do call Fidelity once in awhile to ask questions. I have accounts with them, and the people who answer their help line are actually remarkably knowledgeable. They can't go through your portfolio with you, but they can answer most one-off questions you might have. That's free.

The other thing you can do is start reading money blogs, post on these boards, etc. That is free and can be just as good (if not better) than a financial planner. You say you have no interest in money, but you might develop an interest if you start to see that your money is really working for you. There is some vocabulary you have to learn, but once you have it most things are not that complex. One of the biggest tasks in financial planning is figuring our where you fall on the debt payoff to savings scale (as in, if you get a $5,000 windfall... would you apply it to debt or would you save it?) and where you fall on the risky to safe scale from an investment standpoint. Those two things wind up guiding most of your financial decisions. A financial planner can help you figure that out, but ultimately it's unique to each person. Some outside reading might help you figure this out for yourself.

One thing I have learned in my legal practice is that financial planners aren't necessarily tax planners. There is a difference, and I have had to fix problems for clients that financial planners caused because they didn't know certain tax rules. Financial planners will be pretty well-versed in the basics of retirement accounts, investment products, etc.... but they're not necessarily a great resource for things like estate planning, large charitable giving, etc. You really don't need somebody doing tax planning for you until you reach certain income/asset levels, but at a certain point financial planners aren't going to cut it. I know this has made me biased, but the number of times I've had to fix things that a client did because the financial planner told them to do it... well, I will never use a financial planner as a result.

brij2006 · December 2014

Gdaisy09 said:

I'm not a Dave Ramsey follower...I did a quick search on ELPs...I'm a little skeptical on how businesses and people become ELPs.

We found our finanical advisor based on personal recommendations. Ask around, co-workers, friends, etc. she advises us on everything from home improvements to investments, and she helps us with our taxes every year. our first consult with her was free...to see if things meshed. we like that she takes a wholistic approach to our money, she helps us prioratize savings versus investing (including investing in our home).

They become ELP's because they have the same values and as Dave's plan follows. They have to have the heart of a teacher and also take "the little guy" who is just starting out with an investment and only wants to do a very minimal amount. Most of the ELP's have gone through Dave's plan themselves and understand how the steps work and how to work with people to help them get to their financial goals that coincide with the steps.

Personally, I have been working with a financial advisor for 6 years and had recommended him to many people. We even got so close with him that H goes golfing with him, and he and his wife were invited to our wedding (H worked along side him for about 9 months). However, now that we've started Dave's plan, we've closed out our whole life policies with his office. It was a hard thing for us to do, and he still talks about "the day when you get a whole life policy again." As much as we care about him and love the working relationship with him, we will no longer receive financial advice from him. It just does not coincide with Dave's teachings and the way we now live our life.

It is also hard because MIL started a bunch of investments with him and she truly does not understand what she has and what it's for. That is where the ELP's are required to follow certain teachings and practices in order to get their endorsement.

The closest ELP to us is an hour and a half away. We have already chatted over the phone with this investor about moving over my Roth, and we really like him. He understands the DR plan and knows what we're going through (he's on baby step 6 himself), and sends us quarterly e-mails to see how we're doing with BS#2. The drive is going to suck, and I'm going to be sad the day we officially close out the rest of the accounts with our current advisor. But there's a reason our current one isn't an ELP, and it has been very hard closing out some things and cancelling contributions to a few accounts with our current one, because he doesn't fully understand what we're doing and why. Instead, like many financial advisors, he shows us how we can earn more in investments than what we're paying in interest on debt, etc, etc. That just doesn't follow Dave's plan and how our lifestyle is now.

So seeing an ELP can be worth it if you are truly following his plan.

bnunn03 · December 2014

Thanks for all the input! I will check out the book that was recommended. I actually really love Money and have learned a lot by lurking here and reading money blogs, Dave ramsey etc. I just loathe retirement stuff, investments etc. I took an investment class in college and it was sooo terribly boring and obviously not useful lol. I think I will try to educate myself 1st-- my main problem is I am not being risky enough considering I have 30+ years left till I can actually retire.

Xstatic3333 · December 2014

I agree with PPs that I'd try to learn a lot on your own before going to a financial advisor. I really like David Bach's books for getting a solid grasp on financial basics. I don't feel like he's necessarily pushing an agenda as much as DR and Suze Orman-not that their systems are wrong, I just find it helpful to have neutral information before deciding if more specific strategies are for you.

I generally prefer to make these decisions on my own. I have no reason to think the ELP wouldn't be fine-it's really just another way for financial advisors to advertise their services-but there could be someone near you who is also helpful. If you want to talk things over with someone, I'd chose someone who charges by the hour, not by the percentage. Since you're looking at work plans, I'd also ask if your HR department has an advisor on-call to discuss things with. Take what they say with a grain of salt, but they can be helpful.

One website that I found pretty helpful when learning about investing is moneyunder30.com. I don't endorse everything this website publishes, especially about homebuying and credit cards, but articles like "what is an index fund?" and "what is an ETF?" are super helpful when learning the investing lingo.

formerlyGDaisy09 · December 2014

brij2006 said:

Gdaisy09 said:

I'm not a Dave Ramsey follower...I did a quick search on ELPs...I'm a little skeptical on how businesses and people become ELPs.

We found our finanical advisor based on personal recommendations. Ask around, co-workers, friends, etc. she advises us on everything from home improvements to investments, and she helps us with our taxes every year. our first consult with her was free...to see if things meshed. we like that she takes a wholistic approach to our money, she helps us prioratize savings versus investing (including investing in our home).

They become ELP's because they have the same values and as Dave's plan follows. They have to have the heart of a teacher and also take "the little guy" who is just starting out with an investment and only wants to do a very minimal amount. Most of the ELP's have gone through Dave's plan themselves and understand how the steps work and how to work with people to help them get to their financial goals that coincide with the steps.

Personally, I have been working with a financial advisor for 6 years and had recommended him to many people. We even got so close with him that H goes golfing with him, and he and his wife were invited to our wedding (H worked along side him for about 9 months). However, now that we've started Dave's plan, we've closed out our whole life policies with his office. It was a hard thing for us to do, and he still talks about "the day when you get a whole life policy again." As much as we care about him and love the working relationship with him, we will no longer receive financial advice from him. It just does not coincide with Dave's teachings and the way we now live our life.
It is also hard because MIL started a bunch of investments with him and she truly does not understand what she has and what it's for. That is where the ELP's are required to follow certain teachings and practices in order to get their endorsement.

The closest ELP to us is an hour and a half away. We have already chatted over the phone with this investor about moving over my Roth, and we really like him. He understands the DR plan and knows what we're going through (he's on baby step 6 himself), and sends us quarterly e-mails to see how we're doing with BS#2. The drive is going to suck, and I'm going to be sad the day we officially close out the rest of the accounts with our current advisor. But there's a reason our current one isn't an ELP, and it has been very hard closing out some things and cancelling contributions to a few accounts with our current one, because he doesn't fully understand what we're doing and why. Instead, like many financial advisors, he shows us how we can earn more in investments than what we're paying in interest on debt, etc, etc. That just doesn't follow Dave's plan and how our lifestyle is now.

So seeing an ELP can be worth it if you are truly following his plan.

it just looked to me as if they fill out an application and pay a fee...the qualifications listed there were pretty broad...if just seems like another way Dave Ramsey makes money...

but again I don't follow his plan, so seeing a financial advisor that is going to help us along the lines of his plan isn't important to me.

vlagrl29 · December 2014

I have my retirement with Fidelity and their local office is about 35 minutes from our house and I've been in there office a couple times in the last 2 years and talked to their financial advisors for free. I love this benefit - they helped me understand how to invest money and how their website works. It helped me tremendously.

CuriousKiddosMama · December 2014

I wouldn't let an hour drive stop you from using this person, however I would start with a phone or email interview. Ask them where and how they would invest potential money for you based on your goals and your current situation. Our financial advisor lives across the us from us. We get regular emails, and have meetings (face to face or on the phone) twice a year to update us on everything. We found him through the rec of friends.
Our precious financial guy wanted us to buy a weird life insurance policy to invest our money in. He was sure this was the best thing for us, and he used it himself. After further research on the product, and finding out that it is practically the worst place to put your money we looked elsewhere.

My dh did sit down with an ELP in the area ( it wasn't actually the guy who was endorsed, but somebody else in his office) if we had met with the actual guy it may have been different, but since we didn't it was a horrible experience. Instead of telling investment strategies and what he would do with our money, it was all about his fees and how expensive it is to be an ELP, and how he would tell us everything next time after we cut him a nice check for his time. Completely unimpressed, and not sure how he gets any clients with that guy working in the office. Absolutely not the heart of a teacher!

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