Advice on good debt vs bad debt should be dependent on the interest rate. If your mortgage is 3% then yes it could be quite possible to earn a better return without too much risk so in that case investing may be better than paying down the mortgage.

However with the 6-8% interest rate in the OP, it makes more sense to pay that down due to the higher rate. I am 31 years old, for the record.

OP. Max 401k especially if it is matched by employer. I would work on saving 6 months living expenses as your emergency fund, then blast that debt down as quickly as possible. Now is the time to do it before you adjust your lifestyle or "your friend" wants kids or you have some other big life change.

I'm now going to take loads of credit for other people's suggestions here, I'd suggest clearing the debt and whilst doing so reading; bogle - little red book of investing, malkiel - random walk, schillings- irrational exuberance to determine what to do with the cash once the debt has gone.......

Then for shits and giggles - thinking fast and slow

This book is an excellent primer on why we are blind to our own overconfidence as it applies

Financial advisors almost deserve a thread of their own

I'm sure they approach doctors the same way they approach execs moving to the middle east - a target rich environment

Whilst I hear there are good financial advisors I've yet to meet one that after their fee, the platforms commission and the funds investment fee make them a sound investment relative to low cost trackers

Bogle, Warren buffet's annual letter and the other books are well worth reading if you are going to meet a financial advisor and want to ask basic questions like what are they offering you after costs and how does it stack up against tracking options

Lots of recent reading has enlightened my perspective on this and the racket that is financial advice, certainly in the UK is just a fucking con

This is key. Advisors, insurance hacks, and lawyers. My wife sandbagged some of these douches by bringing me to the meetings. Hi nice to meet you. Spiel Spiel spin. Then the hammer drops with Windy's questions, deer in headlights asks what I do for a living. Meeting over. Find someone who knows what the hell they are doing and ask for recommendations. My wife's friends ask me questions and I send them to someone who I trust to not fuck them over (and knows that would have consequences since I sent them over). Same thing for lawyers and accountants. It surprises me how greedy some of these idiots are. You can build a book that's essentially an annuity by being honest.

there is lots of great advice in this thread from lots of smart people.

10% of all you earn is yours to keep. Pay yourself first. live on what's left. Then come to a collective plan with your wife. It doesn't matter what that plans is if you do the first two things. From there all the choices between low interest/high interest emergency funds etc etc are a great discussion. But it is just noise if you don't have a plan and are not on the same page.

My wife felt the same as yours did when we started. We were in early 30's; got married bought a house and started a family within 12 months.

We are both savers and committed to saving 10% (per Richest Man in Babylon). She had same concern your wife did. So for first 12 months I saved it in cash in a glass jar(s) in the house. It was a powerful visual symbol of what we could accomplish. And it eased any underlying fear she had that in pretty short order, working together we could take care of any problems financially we might encounter. At the end of 12 months that money was still there and available for an emergency fund or whatever else.


You will not find the above in any advice book. I am just sure we missed out on $500 in interest we could have earned or saved that year........

I'm an advisor. Like I've said on this board, 95% of people do not need my service and would be better off going to Vanguard and doing it themselves. I have 45 clients all very wealthy and all very smart who basically don't want to deal with their investment management, corporate benefits, and tax planning. My clients range from a former partner with Goldman Sachs, corporate executives, lawyers, to GPs in private equity firms. I've brought significant value to many clients beyond the investment management process. Could I bring value to someone with a $100k IRA, after fees and adjusting for risk, possibly, but it would be thin.

Unfortunately, there are many individuals in my business who put their interest above their clients. I like to believe I offer a very good service for a very reasonable price. We do not market our firm and every client I have basically came from referrals.

It's interesting in the UK that financial advisors offer tax advice where as the only person I'd go to for tax advice is a chartered advisor - same as accountant just specialist for tax

I'd be curious as to how much benefit after costs you / any good advisor could bring on say 500 or 1m v's a tracker over a given period?

How do you think you do and over what period would it be reasonable to compare the expected returns? I guess most people invest for 30-40 years prior to retirement so how do you think you / a.new. other good advisor should do?

My friend's father is also one of the few good ones. I believe he charges flat fees rather then commissions. He has told me he has never actually marketed his firm and he wonders how much business he is losing but he is so busy already he doesn't need more clients.

He also said he has never actually tried to sell someone a life insurance product, only does the work when the client asks.

I was going to write a response to Andrew parroting what you laid out as to why I have and others should have an advisor. I don't want to have to research XYZ technical BS. I have an investment thesis and risk tolerances in place and want my advisor to compliment that, not bring me a commission wet dream. The guy I recommend probably has made more on referrals and their referrals than he could ever make fleecing me for a year churning me, which I just don't understand. Why not build the trust and the book, instead of the quick buck? If one can't see long term for a relationship, then how am I to trust they can look long term to plan.

They have tax lawyers on staff.

I do most of the tax forecasts for my clients and calculate all the quarterly estimated payments. At year end, the accountant fills in the return.

As for bringing value to the portfolio, I would say you need to look at a full market cycle. Also, you need to adjust for risk. When we evaluate our internal portfolios, we did really well when the dollar was falling with a big international bet and nobody wanted small cap value and REITs at the dot com peak. Conversely, we have lagged on the equity side over the past few years with low quality stocks doing better than high quality stocks. If you look at risk adjusted returns over the past few years, while we lagged relative to our equity benchmark by 1% annually, we have been in the top 5% on a risk adjusted return. Last year we did really well and our recent move to more value stocks combined with a Trump bump caused us to finish strong. win.

I would say if you can bring 1% of value after taxes and fees over a full market cycle you are doing well. As for bonds, we have done very well. We focus mostly on intermediate municipal bonds and periodically add some high yield debt or other spread products when spreads get one or two standard deviations from the norm.

We avoid most "alternative products" because they are tax inefficient, high fees, and really don't add any value to a stock/bond portfolio.

How do you define alternative investments?

Definitely not the case. Most financial advisors in the UK simply market products and are one man firms. Larger firms that might be the case but I'd still, in the UK be looking ato a tax advisor for my returns and advice not a lawyer though I suspect there is significant cross over

Probably referring more to liquid alternatives that are being heavily marketed these days along the multi strategy approach - managed futures,hedge fund strategies, long/short, currencies, etc.. We do no gold or commodities but we have purchased some mineral rights in the Permian basin.

We do own a few apartment complexes. We have a outside manager who periodically brings us a few deals, mid level apartments, fix them up, add a little leverage, increase the rents and we either hold them or sell them. Occasionally a client will bring us some type of private equity deal to evaluate and I had a client or two invest in an assisted living complex and a hotel complex. We do very little in the private equity space but several clients have moved out of the corporate world into venture capital. Most private equity forays haven't been very successful. Clients tend to invest in what they know, make too big a bet, and they don't make enough bets.

We tend to keep it very simple.