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September 2017 Financial Advisor Meeting

I am a big proponent of having professionals in your corner to help you achieve your goals sooner and easier. I recognize the DIY mentality that’s ingrained in many hard-working healthcare professionals. I recall my own parents being willing to pay for a gardener, a pool cleaner, and a mechanic but they would have never paid for a financial advisor meeting.

The pool-guy cost $100/month and gardener another $50/month. And though my parents allowed me to have the most luxurious childhood with damn near anything I wanted, they were unable to hold on to their wealth. The money they spent on the house unfortunately wasn’t recaptured either because they lost the home eventually. But we had a seriously clear-blue pool and hedges that’d make a brazilian wax look like a hack-job.

I made a decision in 2012 that my time left on this earth is the most valuable asset I own. I didn’t want to spend it accumulating more goods but wanted my wealth to grow so that it could untie me from my job-income. I don’t see how I could have done it without a financial advisor.

I don’t have a gardener and I don’t have a pool dude. Nor do I have the kind of house that would need those services. In some eyes, I probably didn’t achieve the American dream but I’m very content with my financial priorities. I hope to be able to do something meaningful with my achievements.

 

My Financial Advisor

Andrew Mohrmann from modern-dollar.com helped me get to this point and I’m grateful for his unbiased, thoughtful, and supportive professionalism. I always learn something new from Andrew during our phone conversations.

What I appreciate about Andrew is that he doesn’t think emotionally nor is he so set in his financial ideology to the point of being a one-trick pony. We have discussed all sorts of investment strategies and adjusted my asset allocation to where it is now.

We have incorporated real estate into the mix and he has helped me do all the tedious math before reaching each of my important milestones. I was in debt when Andrew and I started working together – now I’m out of debt. I didn’t have a condo before Andrew, now I own my condo outright. I was working full-time and horribly miserable, now I’m retired and loving the shit out of it.

 

What A Financial Advisor Should Do

Before I say what a FA should do, I will say that each person is different. A couple of my friends also are clients of Andrew and each prefers their own style. Some want to be completely hands-off and have their FA do all the work and make all the decisions while others want to be involved in every decision.

I personally like to research everything myself and run it by Andrew. He then helps me make the decision. Yea, I’m sort of that pain in the ass healthy old guy who comes to the office and is a bit of a know-it-all. But I try to not harass Andrew too much and try to be respectful of his time. I’m fortunate that he is incredibly competent so his advice is almost always what I follow.

I think healthcare professionals should be consulting with industry experts – we have too much at stake not to. You should go to them with questions and they should help you first ask the right questions and then give you all the right options for you to choose from.

It’s okay if you want them to make all the decisions for you but it’s important to learn some things along the way so that if one day they are no longer available, you are still able to carry on with another advisor.

What I want the most from my advisor is to have her or him hold my hand through hard times. We all will have hard personal times or we’ll at the very least go through tough economic changes. Not only do I want someone to e-hold me when shit hits the fan but I also want them to help me capitalize on lucrative opportunities.

 

My Fall Meeting With Andrew

We talked about my current living situation in Barcelona and my expenses. For now I am earning plenty of money so we aren’t worried about the extra expenses of paying rent here.

Review My Net Worth

He has an online portal on his website where all my accounts are populated. He keeps track of my spending, my income, and my assets. We discussed the current net worth and how the markets were behaving. This is always very helpful because there is so much fucking noise on the internet – Andrew always sums it up nicely for me.

Discuss My Real Estate

Next, the topic of my condo and whether I should sell or rent it out or keep it and live in it. Again, Andrew did an excellent job of asking me all the relevant information about the condo before creating a spreadsheet to determine my potential returns with each option.

Later in the day he emailed me a detailed spreadsheet with all the factors accounted for, such as:

  • realtor fees
  • taxes
  • depreciation
  • rent
  • taxes
  • HOA
  • renting expenses
  • repairs

We determined that my IRR (internal rate of return) would be around 4.3%. Think of IRR as a more complicated ROI (return on investment). ROI is backwards looking and IRR is forward-looking. APY (annual percentage yield) might be a term you are more familiar with which is most similar to an IRR.

 

Discuss Asset Allocation

The final topic was my asset allocation. I’m on track to achieve my optimum asset allocation in order to minimize my risk exposure and maximize my potential profits.

We have tweaked my international holdings, bonds, and my small cap holdings to create a very sustainable portfolio for me.

 

What I Don’t Want My Advisor To Do

I don’t have a need or desire for my advisor to give me cutting edge investing tips such as picking the hottest stock. I want someone who knows how to hit the sweetspot between wealth preservation, loss aversion, and risk taking in order to help me grow my net worth.

My previous financial advisor had some very sexy Lord Abbett investments which he pushed on me. But 5% fees weren’t what I needed at the time. And when I did want to break away from him he gave me the biggest guilt trip and for that he got a very worthy email reply.

Another advisor was too busy selling me insurance products to discuss my spending. He wasn’t asking me about me driving a Hummer in residency or my condo sitting empty in San Diego while I was finishing my training at UCLA.

I know there are 25% returns out there. I don’t want my advisor pushing me towards them. I’m a realist and know what it takes to have 25% returns – I’ll take my little 4-6% annual returns which will compound over my lifetime to more than 300% returns on my investment.

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