If you've ever thought you've needed a financial adviser to become
a millionaire, you don't, and I am living proof of this.
I am Tiffany Thomas with Wealthy Tiffany Dot com.
And I invested in real estate and in the stock market to become a millionaire.
And working with a financial planner is not what helped me to get there.
Now, before I give you the reasons of why
you don't need to work with a financial planner, I do want to clarify that.
I did work with a financial planner.
I was working for a company and we had a 401k or representative.
And so I met with him and did use his company to invest some of my money
and ended up setting up a whole life insurance policy.
But after having my investments with him
and his company for less than three years, I did a lot of research on my own
and decided that I did not need to be using a financial adviser.
And I became aware of all of these things
that I'm going to share with you in the video today.
I ended up moving all of my investments at his company over to Vanguard,
and any money that I would have made by investing at his company was pretty
much lost when I canceled that whole life insurance policy, because after doing more
research, I knew that it wasn't the right investment for me.
So he did not directly help me become a millionaire, but kind of indirectly
because I started doing a lot of research on my own and figured out how to invest
and still make really good returns without using a financial adviser.
So if you are ready to dive right in,
hit that like button and the subscribe button and I'm going to give you
the reasons why you don't need a financial adviser to become the millionaire.
Reason number one, and this is the biggest reason of all, because you can actually
retire earlier or become a millionaire earlier.
If you are not using a financial adviser, there are fee only advisors,
which means they charge a flat rate to meet with them and it's usually
thousands of dollars to get a financial plan with a financial adviser.
But there are also advisers that work on commission.
So whether or not you are writing out
a physical check to that financial adviser, they are still getting paid.
Those financial advisers usually charge
about one percent of the money that you're investing.
And people get a little confused on this part.
They think that if they are making more money with their investments,
that their financial planner is going to make more money.
And that is true.
But they still get paid.
Whether or not you are making more money,
the fees that financial advisers charge are not based on the returns they deliver,
but rather are based on how much money you invest.
This means that even if they end up losing the money that you entrust them with,
you're still going to get a bill for their services.
Not only does the system add extra unnecessary risk and expenses to your
investment strategy, it also leaves little incentive for a financial adviser
to perform well while they will earn more if they are able to grow your wealth.
At the end of the day,
they will get paid regardless of the funds they are choosing for.
You may not be the best funds for you because they could make a higher
commission if they invest your money in certain funds.
So while they invest in those funds, they're getting a really good paycheck.
But it may not be giving you the best return on your money.
So if you are meeting with a financial adviser or a financial planner,
make sure you are asking how they get paid and make sure you understand how they're
getting paid, because unfortunately, there are quite a few shady financial advisers.
So you really want to work with one that is up front with you and they tell
you, yes, I'm getting paid commission on these certain funds.
And now I want to show you an example of what I'm talking about,
that you can retire earlier if you are not using a financial adviser.
I wanted to share this article with you guys because Nerd Wallet has done a really
good job of breaking down how much fees really cost over time.
So they titled it How a one percent fee,
which is what financial advisors would normally charge.
You could cost Millennial's five hundred
ninety thousand dollars in retirement savings.
So what they did was they took a
millennial investor and they looked at different investing scenarios
for a twenty five year old who has twenty five thousand dollars in their retirement
account and then adds ten thousand dollars to that account every year.
And they earn, on average,
a seven percent annual return and they plan to retire in 40 years.
Let's take a look at how the cost of fees accelerates over time
so you can see in their graph they have the number of years invested.
So if you're just investing for 10 years,
then you could lose eleven thousand three hundred and forty three dollars to fees.
And then the after fee investment value
would be one hundred and sixty six thousand dollars.
So in essence, you're losing six point four percent to fees.
But if you invest longer than 10 years, so you're investing for that 40 year
period, you are going to lose five hundred
and ninety two thousand seven hundred and ninety eight dollars just to fees.
I feel like that's a lot of money.
There's a lot of things I could do with about six hundred grand
and your after fee investment value would be one point seventy seven million.
So that percentage that you're losing
in fees is twenty five point one percent, which is huge.
So the longer you are investing, the more you are going to pay in fees.
So if you can really keep those fees as
low as possible, then you're going to be able to retire earlier.
And like they mentioned down here, they say even though the investor
continues to get the same annual or the same seven percent average annual
return, our analysis shows the percentage of value
lost to fees climbs higher as the years pass.
So you can see that it went
from that original six point four percent for investing up to 10 years,
all the way up to twenty five percent over that 40 year period.
So fees will take a huge toll on any investor's portfolio.
And if you can reduce those fees, especially a full one percent fee,
then you'll be able to retire earlier or become a millionaire even earlier.
Hopefully you can see exactly what I'm talking about, all of that money that you
are missing out on by giving it over to a financial adviser.
All right.
Reason number two is because the time that you spend trying to find a financial
adviser, you can actually spend that time learning how to invest your own money.
There are thousands and thousands of financial planners out there.
So taking the time to either get referrals
or set up meetings with all of these different advisors that are out there
and choosing the best one for you is really time consuming.
And since they're managing your money, you want to find a really good one.
You don't want to just look at the first one that you find and go with them.
So instead of doing that, instead of researching the best financial
planner that you can find, research how to invest your money on your own.
I personally have a lot of videos about
this on my YouTube channel, and there are a ton of other YouTube is
out there that have really good information.
So there are plenty of opportunities
for you to just do a little bit of research and start investing on your own.
Plus, it's really fun.
You get to choose your investments.
You're going to see your money grow over
time and know that you chose those investments.
Plus, you can automate your investing.
You can set up just a auto transfer directly from your paycheck to Vanguard.
If you want to use Vanguard or whatever
brokerage company you want to use and then automatically invest that money every two
weeks or every month, however often you're getting paid.
So it can be kept really, really simple and really,
really effective, which we'll get into later in the video.
All right. And reason number three is because you are
the one that is going to care the most about your money, not someone else.
Most financial planners are looking to make a really good paycheck.
So they are going to choose investments that are going to give them a pay raise.
Being a financial planner is that person's job.
So they want to get paid well.
And unfortunately, that leads them to
invest your money in things that may not be the best for you.
Like I mentioned earlier,
I've heard of too many financial advisors just moving money around,
switching up their funds that their clients are invested in just to make it
seem more complicated and to tell you you're getting a better return.
In actuality, it doesn't need to be complicated at all.
You can keep it very, very simple.
And that brings us to reason number four.
Investing with a financial advisor does
not mean you are going to make higher returns.
Research shows that financial advisors are
not actually outperforming investing in a simple index funds.
And I have done quite a bit of research on this and it proves to be true.
I just want to share an article from a switch point with you in this article.
They had been talking to a financial advisor.
We then looked at the track record of a handful of this advisors,
top clients, many of whom he had been working with for more than ten years.
Up until this point, the portfolios were made up of various
high fee mutual funds, all of which attempted to outperform the market.
And one way or another, there were some that specialized in stock
picking, trying to find the next Google or Amazon.
Others attempted to time the market and avoid downturns like.
We experienced in twenty eight,
but despite all of the extra effort and complexity, all of the portfolios,
all of the portfolios had underperformed a low cost index fund approach.
And the article continues on.
So what was the adviser's response when I
asked if you plan to implement a buy and hold approach using low cost funds?
We can't do that.
Some of our clients pay forty thousand a year for our services.
We can't just invest in a handful of index funds and call it a day.
What are you kidding me?
Financial advisors clearly do not have your best interest at heart,
so be careful if you are choosing to go with a financial adviser.
All right. The last reason, reason number five is
because money will be with you your entire life.
Money is not a fad like scrunches or parachute pants.
Money is here to stay.
It is a part of our daily lives and it will be for the rest of our lives.
So you might as well start learning how
to make your money work for you instead of you always working for your money.
If you do use a financial adviser, you are going to be reliant on that person
until the end of your life or until your money runs out, whichever comes first.
And who knows how long your financial planner will be around.
So if they leave in one way or another before you do what,
you're going to have to find another financial planner to take over.
So you might as well learn how to take
care of your money, manage it better and invest it that way.
You know exactly what you're investing in and what fees you are paying.
And you can make the best choices for you because it's your money.
You are the one that's going to care the most about it.
You can honestly do a little bit of research.
It really doesn't take that much time and successfully invest your money.
And that is how I was able to become a millionaire.
I invested on my own.
And yeah, I did have that short short
period where I was using that financial adviser.
But after doing my own research,
I realized that was not the best thing for me to be doing.
All right. Those are the five reasons why I have
decided a financial planner is not necessary to become a millionaire.
If you found this video helpful, please hit that like button and share it
with someone else who would like to share this information.
And please hit the subscribe button to subscribe to my YouTube channel.
And don't forget to hit the little bell to get notified on when I post new videos.
And if you guys are interested in becoming
financially free at a young age, make sure and check out my free course.
A Beginner's Guide to Financial Freedom at forty.
Thanks so much for watching.
I'll see you in the next video.