Before you pick a Financial Advisor....

[MJ DeMarco]

Roth IRA for options.

Many firms don't allow IRA option trading, I'm sure Schwab is one of them. Some offer just covereds. And option trading in IRAs has been a big target for regulation and restriction so you might have to search for a firm that offers it.

 

[ButGregSaid]

I became more knowledgeable on the products and discovered that I would be basically sending down people down a very dark tunnel if they invested in mutual funds for the long-term. That is something that I could never live with.

Can you elaborate more on this? The more we know, the more it helps!

 

[Philip Marlowe]

"Bob, I've got some pretty big decisions to make this year - I'm buying up rental properties and starting a couple side gigs. I need an advisor that's going to be actively invested in my decisions and can help me navigate the financial challenges that may come my way."

Your comment above was actually one of my first red flags about you. It sounds like you're pulling yourself in a dozen directions and one of them was the pleasant thought that "Bob" could work miracles for you with your money and make you a millionaire.

Perhaps the above quote from you was a bit hyperbolic so I don't want to read too much into it, but I have enough trouble finding the time and energy for ONE thing, much less buying-up multiple rental properties and "a couple side gigs". Maybe that's just me.

I'm guessing you didn't really have the money in the first place to make the math work with Bob, even if he was some killer hedge fund manager. Instead "hiring a financial adviser" was part of a grand strategy to multiply your money. Many of us have had that same thought.

But your post doesn't add up. You want an adviser to make you millions, you apparently have free cash to buy rental properties, but you're also focused on multiples "side gigs". All as a young 20-something. Impressive.

I could be wrong about all of the above, but my suggestion is that you focus on one or two goals.

If you are truly flush with cash right now, I'd actually tell you to sit tight in this market. If you really want those rental properties, focus on acquiring them, vetting tenants closely, and keeping them rented. If you really want those side gigs, I'd suggest you decide which ones specifically. The term "side gig" is too casual and makes me think you're mowing lawns.

Anyway, I'm just a guy on the Internet but it sounds like you're in a hurry to get your Lambo and are trying to torture the math and short circuit the process and this particular route got your burned.

Valuable lessons in your experience. You're already ahead of the curve at your age. Best of luck!

-PM

 

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[ButGregSaid]

@Greg P. Hey Greg - no need to dive back in if I read this too literally. (Don't waste you time - haha) It's definitely not for me to judge so if you're headed in the right direction, that's great. Just saw a few things I thought I'd comment on - many from my own experience.

I wouldn't want you to think I don't appreciate you opening-up or giving a warning to others.

-PM

No worries bud! I thought maybe it was how I presented myself in my OP - it's admittedly a learning experience for me as well. But that's what these forums are for. Please do weigh in anytime if you feel you've got something to offer!

 

[ButGregSaid]

Good question. In my opinion, hiring and advisor is worth it when you have so much money that managing it is a job by itself. Or maybe earlier if you are a total disaster with your finances or have very little knowledge about financial products (although I would recommend anyone tonleran the basics and not rely blindly on any FA).

In any case, the value I see in financial advisors is not creating wealth for you, is preserving it and grow it to obtain some return consistent with the risk your are willing to take. As I see it, you get wealthy by concentrating your wealth in your business and taking risks you know well. And then, once you are wealthy, you can use financial instruments to preserve it and have passive income that help sustain it your lifestyle without running out of money. You can use a part to make crazy investments that will give you a lot of money, but I personally do not think that is the main value or rationale to hire a FA.

Sent from my SM-G920T using Tapatalk

That helps a lot, thanks for that. As I mentioned to @Philip Marlowe earlier this was really all about learning for me. I went in with the mindset that maybe I could learn a thing or two from having an FA (or someone who's smarter than me) on the subject... but as you pointed out - I learned the basics and started to feel like I could do the whole thing myself. So I feel even better about the decision I made!

 

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[Johnny boy]

2. When you hear "You're going to have your first million by the time you're forty", run.

yeah what the F*ck? If anyone tells me I won't have my first million until after 30 that's a huge red flag.

 

[WJK]

I skipped reading much of this thread, and previously already addressed staying away from financial advisors and wrote up an introductory post on DIY investing HERE.

You hit the nail on the head with a lot of the initial points.

When you also realize how much of your money goes to fees each year - and what the compounding return on that would have been - it'll stop you dead in your tracks ever seeing one.

Amen! I've had these advisors tell me to sell my RE and then give them my money to manage. It couldn't be about their fees, could it? They get 0 out of my RE and I have total control. It drives them crazy not to get their fingers into my pie.

 

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[RicardoGrande]

It was obvious that all he had was book knowledge and statistics.

Would you let a person with 40k net worth manage a million dollars for you?

This, it's a tough spot. I have an acquaintance who's a financial advisor for one of the larger FA companies. He talks a tough talk and brings up a lot how "difficult" his training was and how "most people that approach the career never make it in their elite programs". He has plenty of stories of helping his clients, but his best clients are almost always hitting above 100k/yr in househould income and are very cautious with their spending.

On the flipside of that, he also has plenty of stories an advising people stuck in the slowlane who had bad financial habits in their 20s and instead of being able to help them, he says "You may never get to retire" to their faces and have a good laugh about it later with his colleagues or friends.

Not advising about what they could do, or taking additional action to try to reverse the financial course they're on. Just "I learned this, these people are screwed, they need to start cutting all of their expenses bare and try to give us at least 400$ a month to put into our "money market" accounts that are totally safe with a 4.57%/yr return and cross their fingers they get some raises." Well, what if they're a public school teacher carrying student loan debt, credit card debt, and they had to purchase a used car (still 400$/mo right now) just to get to work?

Not inherently bad people but now with inflation leapfrogging the markets and cost of living higher than ever, the cracks are starting to burst and a lot of people are stuck in limbo. That 70s/80s mentality of throwing money into a cd/markets just doesn't appear to be viable unless someone has leverage and a hefty amount they can throw down to get it to start growing asap.

I skipped reading much of this thread, and previously already addressed staying away from financial advisors and wrote up an introductory post on DIY investing HERE.

Thanks for this one FD, saw this the other day and you got "Open an account and start investing a chunk of change each month" onto my list for this year