47 - Find a financial adviser / mentor

Reason for this Goal:    Find a financial adviser, mentor or planner to help you achieve your financial goals and ensure you remain focused to achieve your investment goals.  You can also find a local investment club, or group, that specializes in buying investment real estate or investing in other asset classes, in your local area.   While you can just go it alone, working with people and learning from their mistakes can save you a lot of time and costly errors.  

*** UPDATED JAN 5, 2004:  MANY FINANCIAL ADVISORS FAIL TO PROVIDE ADVICE THAT WILL OUTPERFORM INVESTING IN THE BROADER STOCK MARKET AND CHARGE LARGE MANAGEMENT FEES TO DO SO.  YOU WILL SUBSTANTIALLY IMPROVE YOUR FINANCIAL HEALTH BY INVESTING IN THE BROADER MARKETS WITH A LONGER TERM PERSPECTIVE (> 10 YEARS).   SEE FURTHER UPDATE INFORMATION BELOW ***


Types of financial advisers

Types of financial advisers and investment clubs available are . . . 

  • A wealthy friend or mentor with a proven track record of achieving above average returns (> 10% per annum for more than 10 years)
  • Financial planner (fee based)
  • On-line financial services/brokerage company
  • Stock, mutual fund, or bond investment club
  • Private investment club
  • Financial adviser (commission based) - NOT RECOMMENDED as most are motivated to maximize their commission versus your returns


How  to find a good financial adviser

Take these steps to find a good financial adviser:

  1. Understand the types of financial advisers. Choose the type that work best for your your situation and level of investment experience to date.  Talk to people and find out their personal experiences.  

  2. Seek someone with reputable experience and credentials.  Their experience and track record matters as you want someone guiding you that has a proven track record.  There are many new advisers that haven't yet developed a track record.

  3. Understand how the financial adviser is compensated.  The most unbiased financial adviser is one who is fee based vs. commission based.  There are pros and cons to both types.  The big thing to understand is if the adviser is financially motivated to select one investment versus another, based on a higher commission rate.   

  4. Develop a list of interview questions that you wish to qualify or rate different financial advisers against before you select your preferred adviser.   I've personally interviewed an adviser and disqualified them when they didn't have an answer to a fundamental principle that was important to me. 

  5. Ask for references and check them out carefully, before deciding.  Having a personal reference (friend or family member) is best.   Third party references are fine too but I'd obtain at least 2 or 3.  


Things that a financial adviser should help you with

A good financial adviser should be able to help you with the following:

  • Assessing your risk tolerance for investments
  • Guiding you with the amount of money you should be investing, both monthly and annually
  • Recommending specific stocks, mutual funds, and other types of investments, while considering the Management Expense Ratios (MER) and the impact that will have on your net returns
  • The tax impacts with each type of investment
  • Both short and long term investment strategies
  • Understanding your real returns each year on each of your investments

*** UPDATE:  SINCE WRITING THIS GOAL, MY WIFE AND I FIRED OUR FINANCIAL ADVISER, OPENED UP OUR OWN ON-LINE STOCK TRADING ACCOUNT AND ARE MANAGING OUR OWN MONEY.   WE HAVE DEVELOPED OUR OWN LONG TERM INVESTING STRATEGY BASED ON OUR OWN RESEARCH WHILE CONSIDERING THE FOLLOWING:

- Most financial advisors promote over diversification and rely on excessive management fees.  Following the advice of Warren Buffet (world recognized expert investor), "diversification is for people who don't know they are doing".  Find 2 or 3 companies (or index/ETF funds) who are changing the world and who are run by great leaders and invest for the long term.    For us, we have chosen to invest in the company TESLA (stock ticker TSLA), for the enormous potential with Electric Vehicles, Artificial Intelligence, Energy Storage and Robotics. 

- For MOST people, investing in an overall index fund that invests in an overall market like the S&P 500, is the best investment advice.  I've personally recommended investing in funds such as the following to my own daughters.  

 - VOO Vanguard 500 Index:  Invests in stocks in the S&P 500 index, representing 500 of the largest U.S. companies.  Goal is to closely track the indexes return, which is considered aa gauge of the overall U.S.  stock returns.  It offers high potential for investment growth; share value rises and falls more sharply than that of funds holding bonds.

 - VTI Vanguard Total stock market Index:  Seeks to track the performance of the US Total Market index.  Large, mid, and small-cap equity diversified across growth and value styles. Low management expenses.

- QQQ Ivesco trust:  Provides exposure to companies at the forefront of innovation across a diverse range of sectors, all in one investment.  

Your financial future will be significantly impacted by maximizing your investment returns.   It is worth your time and effort to manage your own investments.   No one will care for your money like you will.  This could make a HUGE difference in your lifestyle and retirement!

*** WHILE THIS IS MY BEST ADVICE, PLEASE DO YOUR OWN RESEARCH BEFORE MAKING INVESTMENT DECISIONS ***

The people you associate with, who help you, will to a large degree impact your financial health.  Taking the time to find the right financial mentor, advisor, investment club, or on-line financial services company is a great way to be mentored by success-minded people, and will give you the confidence to act.  Good planners and investment groups will have regular meetings, training classes, monthly newsletters, and member websites for you to learn from.   Make sure you consider the fees and management expense ratios associated with your financial advice, as the impacts to your financial results can be enormous.   

Suggested Goal(s):    Find your financial adviser or mentor, meet with them regularly, and start investing.
* UPDATED:   DEVELOP THE SKILLS AND MINDSET AND START MANAGING YOUR OWN MONEY WITH A LONG TERM MINDSET.

Your Outrageous Goal:  Become a contributing member of an investment club that helps others.

Return to financial goals.


Last Updated:  January 5, 2024