<p>Igloo, YOU know your finances–not everyone is so savvy. One of my DHs’ first clients had a layer, e.g., of about 5 car loans–four of which were cars they no longer owned. They couldn’t believe it when he consolodated those 5 payments into one smaller one! People get sucked into credit cards, or have invested in only one stock, or have no savings, or don’t understand the concept of 401(k)s, and on and on. Or they get an inheritance or other windfall they want to invest. With seniors, DH is often telling them to SPEND money. Best story (I heard 2 nights ago) - senior client of DH’s said she went to her Dr. and told him she felt better than she had in years. Dr asked her why. Senior answers: “because I hired a gardener!” </p>
<p>Good Financial Planners are creative and, I’d bet, even someone as together as you sound could get some helpful advice.</p>
<p>And, DH didn’t go to West Point, but he has both a BS and MBA and I promise he’s as honorable as a WP-er! ;)</p>
<p>I have an investment advisor. I didn’t mean to dismiss FP. I truly don’t understand. I probably live a simpler life than most. I don’t carry debt of any kind, live well within means. The questions I have are more life choice types not financial kind.</p>
<p>We use the “free” Schwab advisor and talk with our CPA/tax preparer from time to time & do the rest ourselves. We HAD used Dean Witter & taken a bath with them. For us, the trick is to have more income than expenses; the rest seems to be gravy to us. We have no debt, very little left on the mortgage, and hopefully only one last year of tuition. Having a significant pension helps us sleep at night.</p>
<p>We are using one these days. Recommended by some colleagues of DH. In his current job he gets income that is deferred and in forms we’re not that familiar with – non-US company, in Euros and with lock box periods and stuff that is hard for us to parse. This FP specializes in helping employees at this company with this type of compensation so it is making sense.</p>
<p>In the past, I’ve found those guys didn’t really bring much value to the table.</p>
<p>’'Having a significant pension helps us sleep at night."</p>
<p>I have retirement-age friends who sold their small business recently. No Social Security … no pension … no prospects for inheritance. They do all their own investing, and spend a lot of time researching and investigating. They interview FPs periodically. But as my friends say, financial planning “success” has a completely different meaning when investment income is your only income and interest rates are at 1%.</p>
<p>I know one man who decided he needed to create his own pension. He decided to start doing real estate because he couldn’t trust the stock market. He bought several properties with the money he took out of the stock market and has had each fixed up and rents them out. He has most of them fully rented and is up to 50 units. He says that is his retirement/pension plan–the rental income, which exceeds the expenses. It lets him sleep at night and rentals are in great demand on our island.</p>
<p>I believe he’s making significantly more doing this than in his profession–he’s a lawyer by training.</p>
<p>Actually, I think he didn’t necessarily have all that much money to start this off with but he’s kept at it for quite a while and even purchased equipment and acquired licenses related to it. He does have an eye for properties that have development potential and works hard to make it all work. The most recent property he purchased, the bank said because he has the other properties, they are sufficient collateral and they didn’t want or need any down payment for him to purchase the rental. He also still does practice law. Not sure when he sleeps.</p>
Whew! I had to hold my breath until the end of your story. I thought you were leading up to “…and then he lost everything when the RE bubble popped.” Thank goodness there’s a happy ending here.</p>
<p>I wouldn’t want all my eggs in one basket. RE shouldn’t be more than 10 - 15% of your portfolio. However, I know many people who make more money renting homes than in their day jobs. My only issue with this is not wanting to be a landlord and getting calls at all hours to come fix something.</p>
<p>Of course pensions are not really and truly “guaranteed”. If you drill down, they are insured at a fraction of the expected income stream. Not to promote paranoia, but we look on our pensions as nice if they actually survive. Given today’s economic landscape, all bets are off.</p>
<p>If you have RE & don’t want the hassles, you can have a good managing agent handle the hassles. Of course, that reduces your profits because they take a % of the total income (typically about 10% in HI).</p>
<p>Some pensions are more secure than others–depends on the employer.</p>