127. “Our financial advisor almost cost us $800k. How do we fire them?”
Oct 24, 2023
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Jeff, a specialized surgeon, and Susan, a stay-at-home parent, discuss their financial struggles and being taken advantage of by a percentage-based financial advisor. They debate the value of a whole life insurance policy, share their upbringing and the impact of the fiduciary rule on financial consumers, and reflect on their experience with a financial advisor. They emphasize the importance of conscious spending, confronting and switching financial advisors for high fees, and leveraging assets. The hosts conclude with plans for change and meeting with a new financial advisor for better financial alignment.
Establish clear financial boundaries and prioritize individual needs.
Recognize how childhood experiences shape attitudes towards money.
Beware of percentage-based financial advisors, assess investments for suitability and cost-effectiveness.
Deep dives
The importance of conscious spending and the need for financial boundaries
Susan and Jeff have realized that they need to establish clear financial boundaries and be more conscious about their spending. They recognize that their current approach of not setting limits and adding on expenses is unsustainable. Susan struggles with prioritizing her own needs but is now realizing the importance of making herself a financial priority.
The influence of childhood experiences on money habits
Both Susan and Jeff have childhood experiences that have shaped their attitudes towards money. Susan's upbringing, where money was scarce and financial struggles were common, has influenced her fear of not having enough and her reluctance to spend on herself. Jeff's experiences with family financial loss have made him cautious and reluctant to make bad financial decisions. Understanding these influences can help them address their financial challenges.
The need to reassess financial advisors and investments
The podcast episode brings attention to the potential pitfalls of working with financial advisors who charge a percentage of assets rather than a flat fee. Susan and Jeff have realized that they may be paying excessive fees and have invested in questionable financial products, such as whole life insurance and annuities. This realization prompts the need for a reassessment of their investments and a search for more cost-effective and suitable strategies.
The importance of setting financial goals and strategies
Susan and Jeff have acknowledged that they have not been intentional with their finances and have lacked a strategic approach. They understand the need to establish clear financial goals and develop strategies to achieve them. This includes reevaluating expenses, setting spending limits, and aligning their financial habits with their long-term objectives.
Taking Control of Spending and Investments
Susan and Jeff discovered that they were spending thousands of dollars on food and other expenses without realizing it. They also realized that their financial advisor was charging them a 1.24% fee, which was not aligned with their financial goals. They decided to switch to a fee-based financial advisor and reevaluate their spending habits.
Teaching Kids Financial Skills and Making Changes
Susan and Jeff recognized the need to teach their children about money and instill financial responsibility. They planned to involve their children in grocery shopping and create a budget for them. They also acknowledged the mistake of having a whole life insurance policy and decided to cancel it. The couple committed to making changes and working together to align their spending and financial goals.
Jeff is 50, he’s a specialized surgeon. Susan is 48, she stays at home with their two kids. Their discretionary spending has grown over the years, ballooning at an uncontrollable rate. But their biggest issue is that they’re being taken advantage of by a percentage-based financial advisor.
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