I just helped a client with his retirement from King County.
Great guy, a DIY investor, and at the end, when it was time to move his money, he kind of sighed and said “man, this is going to cost me $10,000 per year.”
So I said “hold on, pump the brakes, let’s not move any money“.
Also yes, I am terrible at making money….but I believe people not only deserve the best #investments and #financialplanning, but also to be exited about having someone help them with the most important financial decisions of their life.
So we talked about it and the actual costs looks more like this (WARNING: This only applies if you are with about 5 – 10% of fee only advisors.)
I asked him the following:
1️⃣ Let’s say that I actually cost you a net $10,000 per year. 💸 Is it worth $833 a month for complete peace of mind? We talked about other things he pays monthly for…cars…internet…vacations etc….not very important things in the grand scheme. Then I asked him “would you pay $833 per month to have a cardiologist make sure you had zero heart attacks for the next 30 years?”
2️⃣ I reviewed his portfolios (both his self managed, and the target date fund 😡 in his 401k.) I ran them against my proposed portfolios. He lost around 20% in the inflation bubble burst (pretty common) 📉 . My clients in his same situation lost around 10%. Meaning he would have “paid” for 10 years of services by simply losing less.
3️⃣ Savvy investor that he is, he said “why, did you just sit on cash, I won’t make anything if the market is killing it 📈 ” When we looked at my r/R institutionally available investments we saw that not only would he have done as well, he would have made more during the good years.
At the end (this is why I love engineers, once a spreadsheet shows them the truth in something, good or bad, they love it) he said:
“So…basically you will do all the work, I can never watch CNBC again, I probably won’t pay you anything, and I might actually have more money at the end of the day.”
One happy (now) client. ✅
