I’ve used several financial advisors over the last 20 years.
The first was a great choice. I worked for a company that had an ESOP and about $70k ended up coming to me by surprise when they got bought. I was in my 20s and had no idea what the implications would be. I needed help setting up everything about investing & retirement from scratch. That financial advisor saved my butt! Many of my coworkers blew their money buying cars and jewelry and stupid stuff — then had NO money at tax time. I was very happy to make smarter moves than this with the much needed assistance of a financial advisor :)
I put her to work finding socially responsible funds, and dumped everything I had into those. Return rates be damned.
15 years later, that financial advisor was moving on. I got assigned another one at the same firm. That dude was a hustler, and we did not get along. I asked for another. This person never even got a chance to meet with me before leaving the job. I got another, who ALSO left or was fired right after meeting with me. At that point I looked at changing firms.
I looked for financial advisors all over the place, and the more I looked into it the more the whole structure seemed crazy to me. They are not legally obligated to advise me on my own interests or even tell me the truth? WTF?!?
Here’s the question I was asking back in 2017 that no financial advisor wanted to deal with “How do I calculate, store, and reliably grow VALUE over time in a way that is not pegged to the USD as a currency? Given what the next 30 years are likely to look like, doesn’t this seem like a bad idea?”
I didn’t realize how emotionally confrontational people would get with me as a result of that question. It brought all sorts of weirdos my way, and nobody credible wanted to talk.
Well almost nobody. Eventually I found my way to Carl Richards, who is kinda famous at this and was nice enough to speak with me. He basically told me that what I was looking for didn’t exist. Soon after I took his word for it and stopped looking.
It still seems to me that VALUE should be quantifiable in some sort of absolute way. I mean, if I see that I bought a stock or something for $100 and sold it for $120, it sounds like I made money, right? But depending on the duration between the buying and the selling, the fees & taxes associated with the transaction, and the value of the currency at the exact moment of each end of the transaction, I very easily could have sold it for less in terms of purchasing power value. That’s what I care about. After fees, after taxes, after currency fluctuations, after it’s all said and done, what can I exchange my medium of exchange for? What does it get me?
I’m aiming at a target 20+ years in the future. We know that both Medicare and Social Security will be insolvent before then. The official Trustee Reports issued by the government’s own agencies have been saying so very clear language for several years. And that was all before Covid. I think it’s reasonable to assume that at some point over the next two decades, the trillions of dollars that just got made up and thrown into our economy in the last year will make our dollars worth less than they are today. I don’t think they’ll be worth_less_, but it’s hard to imagine that they’d ever be worth more than today — especially with compounding interest at such nominal rates.
So why would I hinge my entire future safety net on my money being worth more in dollars? That seems to be the only thing financial advisors know how to do.
I am not a doom & gloom kinda guy, far from it. I’m someone who believes in the future, but isn’t willing to count on it being there to take care of me by virtue of my privilege of birth. I’m very willing to do my part for society AND the best thing I can do is first ensure I’m not a drag on it.
What do you think? I’d love to hear! Please comment below :)