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Great Article: Why You Should Be Your Own Adviser

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I follow the White Coat Investor blog for good reason. This guy is not only an emergency MD, he is an absolute genius. He writes brilliant insightful personal finance articles just about every other day. I kid you not! I don't know how he does it, but I don't care. I am just happy he does and gives his articles away for free. And every one of his articles are so good, they could be published in financial professional journals.

 

I met him at a Boglehead conference and read his book, White Coat Investor (read my review here). Along with Mr. Money Mustache (and my review of his blog here), both young men are the best financial writers in the country. Both have ten of thousands of followers, and all of you should be following them frequently. I was always told as a young man, if you want to be wealthy read what wealthy people do.

 

Here is an example, since we talk about being your own financial manager frequently around here: 8 reasons you should be your own advisor.

 

http://whitecoatinvestor.com/8-reasons-you-should-be-your-own-advisor/

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I agree that the WCI blog and book are great resources. I gave the book to a relative and it helped convince her to move her retirement accounts from Edward Jones to Vanguard.

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blosky and krow,

 

Number 3, 4 and 7 are all about trying to evaluate a financial adviser that looks out for your best interests. Five people I know took my suggestion and found an adviser on either the Garrett or NAPFA networks. Two are happy with advisers that I do not personally know. One took a couple of years to get comfortable with my neighborhood NAPFA adviser that I personally know and the last two friends had an interesting response to this same adviser that I know. One friend is emotionally attached to his gold holdings and the adviser said to sell it and the other objected to the .75 AUM and he is attached to a large holding in one stock Apple. Both are waiting for gold and Apple to go back up.

 

Its a complicated issue. People want to do what we do as DIYers and yet when they go to a fiduciary adviser with a lot of emotional baggage, that adviser is going to either charge a hourly fee or AUM and tell them to either sell the gold or sell Apple to create a diversified portfolio. 2 out of the five rejected good advice. Its not the end of the story yet, as these two people are friends and we will continue talking about this. But I was thinking about Apple and how its literally crashed this week and my friend's holding in that one stock. I would be in emotional trauma too if I had good portion of my portfolio because I had too much gold or Apple. That is why nobody should own individual stocks, or gold (unless you are getting a match from your company, in which case, hold it no longer that necessary to qualify for the match, which is about a year in most company 401k plans). Gold and Apple are too narrow and risky, its speculation. But thats another conversation.

 

So, in this case, the issue is the change of investment philosophy from speculation, which the vast majority of investors do, versus a boring diversified portfolio which my neighborhood fee only adviser does. So even finding a competent adviser, who loves Vanguard, both friends rejected him out right! Nobody likes to change, even thought my two friends are emotional and want to get it right. One told me he is afraid of making a mistake about being a DIYer, which I recommend to all my friends. BTW, both have read my book, so they know what I do but they do not want to change.

 

Steve

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I have to admit, I was learning so much here from our smart contributors, and time-straped, I was 'afraid' of venturing over to the bogleheads forum Steve and others speak of. And for good reason - this morning I spent a good portion of time watching the 10 from Rick Van Ness. Before I start reading more on the bogleheads forum, I must turn of the tech!

And now I'll also be following the white coat guy.

Thanks for your service, Steve!

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MoeMoney,

 

Both the White Coat investor and Mr. Money Mustache violate one important blog rule and they get away with it. Their blogs are all extremely long and detailed, which is suppose to turn off today's impatient readers, who want everything now. I don't read the entire blog posts but glance over them. Yet they literally have ten of thousands, MMM has over a million views a month, with several hundred thousand registered followers!!!

 

My little ole blog gets about 30 views a day, on a good day! :- ) But I love what I do to contribute my little old info.

Steve

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