This is a YouTube video titled "Is It Worth It To Be Your Own Financial Advisor?" featuring a conversation primarily between Jim Dahle and Jeff Dahle, recorded in August 2024. They discuss the financial benefits and considerations of acting as your own financial advisor versus paying for professional investment management, emphasizing cost savings and the value of financial education. The content includes practical advice for listeners interested in managing their own finances and investing.
I wanted to talk a little bit about what's the best paying hobby out.
There, and that is certainly not boating. Boating is not the best paid hobby.
Out there, I assure you.
Boat stands for bring out another thousand. And if you buy a boat, please, please, please make sure you can afford the boat before you buy it. I love boating.
It's a lot of fun, but it is not cheap.
You know what the best paying hobby.
Out there is though? It's acting as your own financial advisor, being your own financial planner and your own investment manager. Let's just consider the cost of investment management.
It's not unusual for somebody to pay.
1% of their assets under management as a fee. I hope most people will negotiate something smaller than that by the time they're millionaires, but that's not unusual.
Let's just use that.
It's kind of the industry standard, the average fee that people are paying, although I would hope you would pay less than that. Again, let's say you have a $4 million portfolio, right? You got $4 million, you're paying 1% a year. That's 40 grand. 40 grand, right.
Even if you're an emergency physician working a job and a half, that's a whole month's pay.
It's a whole month's pay.
That's a good paying hobby. If you can avoid that expense, especially if you're paying with after tax dollars.
Right, then it might be a month.
And a half spare. It's just a lot of money. And it's not that an advisor can't provide that sort of value to you. It is possible.
40 is a little on the high.
Side for sure, but it is possible. They can provide a lot of value to you. And I'm not against paying for value.
You know, especially if you're paying a little more reasonable price, like 5 or 10 or $15,000.
But even so, how many shifts do.
You have to work, or how many.
Days do you have to go to clinic, or how many operations do you.
Have to do in order to come up with what you're paying to a financial advisor?
Well, it's quite a few. And it might be worth it to you to learn how to do that yourself, competently.
And you can do that by listening.
To these podcasts, reading the blog, reading.
Our free monthly newsletter, interacting in our forums. If you need a little bit of.
Help, you can take the fire your financial advisor course.
It's a great course and it can help you put your financial plan in place and teach you how to manage it yourself.
Even if you need to use a financial advisor at times to check in.
Or you want to use them for certain things, but not everything.
You can save a lot of money there. It is a really great paying hobby. If you think about $40,000 a year and you apply some sort of future value of money calculation to that, let's say $40,000 a year, and let's apply 8% a year to that over 30 years of a retirement, how much money does that add up to? Well, it adds up to about $4.5.
Million over the course of retirement.
If you divided that by 30, you.
Know that you could spend each of those years of retirement.
That works out to be about $150,000.
Right?
You can have a lot of fun with $150,000. You can run a lot of McLarens for $150,000. You can take all your kids and grandkids on cruises for a lot less than that. And so just keep that in mind. I don't want to say everybody has to be a do it yourself investor.
My best estimate is probably only 20% of docs want and are able to do this themselves.
But that's a whole lot higher percentage.
Of those of you who are listening to this podcast. Right?
So I would encourage you to at.
Least consider acting as your own financial advisor, learning how to do it competently. Right?
Because if you do it badly, that's not worth the savings, right? It's well worth paying a fair price to get good advice if you don't.
Know how to do this stuff yourself. But I would encourage you to learn how to do it yourself. That is the right move for lots of you that are listening to this podcast and it is by far the best paying hobby out there.
The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
