The typical financial advisor charges 1-2% to be your advisor. And we expect that. If you get work on your car, you pay your mechanic. If you get your hair done, you pay your barber. I remember hearing this when I was young and thinking this was very small. And at first, it is. But as time goes on, that number starts to grow significantly. Paying a 1% fee to a financial advisor can cost you 28% of your lifetime returns! 2% fee is 56% of your earnings!
Let me tell you about Jake. He’s a 31-year-old who makes $53,000 per year. He had zero invested. I asked him if he invested his target amount of $500 per month how much he thought he would pay his financial advisor. He guessed $35,000. Seems reasonable considering how many clients his financial advisor would have.
The answer? $327,475. 😮😮😮
*Assumes 10% growth, 36 years invested, $6,000 invested per year, his target retirement age is 67, his target retirement number is $1.5 million. This plan projects him to be at $1.7 million.
While we typically think about eliminating Starbucks lattes from our budget, the decision to hire a financial advisor is more than your whole extended family will ever spend on coffee.
The answer is not to get overwhelmed and therefore not get investing. It’s to get educated.
I’d be happy to do so.
If you need help, reach out. #LetsTalkAboutIt
