Educational Resources on the Financial Aspect of Building Wealth

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Saturday / February 22, 2020

Having more-or-less finalized my system for trading foreign currency pairs online back in June of 2019, I nonetheless continued to craft my approach up until the beginning of this year (2020).

However, I can honestly say that I have run almost completely dry in terms of even the tiniest refinements/improvements I might make to my protocols, so with nothing else to add or work on, I have now turned my attention to what I should do financially speaking if and when trading the system in a live account leads to a marked accumulation of wealth, God willing.

I plan to finish an article on the topic today, which I'm hoping to sell to a client online to help fund the minimum balance I will need to begin live trading. The source material I will be using for my article is: What Your Financial Advisor Isn't Telling You, by Liz Davidson, founder and CEO of Financial Finesse. As I gather what I deem to be useful information from this publication, I will record it in subsequent posts.

(I will also be posting an abbreviated version of some information I already obtained from 24/7 Wall Street, but posted elsewhere, so that I have all my finance-related notes in one location/thread.)

 

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According to page 86 of the above cited publication, in the chapter on avoiding the worst investments (i.e., the best-performing mutual funds) one is not ready to hire a financial adviser until he or she has...

1. Maxed out on contributions to one's retirement plan, health savings account, and other company benefits
2. Paid off all high-interest-rate debt

 

[gaussian]

• Maxed out on contributions to one's retirement plan, health savings account, and other company benefits

• Paid off all high-interest-rate debt

I'd like to add a third -

Net worth over 5 million.

There is virtually no reason to hire a financial advisor with a lower net worth. They're going to drain your account on fees and commissions. If you're sitting on a small 6 figure retirement/investment fund the advisor is going to eat your lunch. Your goal, in my opinion, with hiring a financial advisor is wealth preservation - someone who can run collars, for example, on your holdings to keep your risk tight and return within expectation. With the advent of robo-investing and how simple it is to create an ETF portfolio that performs at-market-return I'm unsure why you'd hire a financial advisor to suggest a way to invest.

Also I'm not sure where the author is getting the idea mutual funds are a bad idea. You need to be aware of load and fees but if you find a good one it will likely outperform anything you could do yourself (remember: most traders are failures). In fact, until you can afford buy in on a long/short hedge fund you're probably going to want to sit on mutual funds if you are looking for semi-passive investment in something actively managed. If the author's argument is return dilution that is semi-salient but still not that big of a concern. Again, you don't have many actively managed choices until your net worth is such you can buy into a hedge fund (then you have to worry about their insane fees as well).


In terms of good books - I've never heard of your book. I'd recommend The Millionaire Next Door and The Richest Man in Babylon for advice on wealth building. It's better to think about how to build wealth with what you have rather than when the 0.0001% chance you make it as an individual trader.

 

[Same Lazy Element]

In terms of good books - I've never heard of your book. I'd recommend The Millionaire Next Door and The Richest Man in Babylon for advice on wealth building. It's better to think about how to build wealth with what you have rather than when the 0.0001% chance you make it as an individual trader.

You think that stuff is relevant in the modern world? I have skimmed through the The Millionaire Next Door and found it to be very dated.

 

[Sekiyo]

https://arxiv.org/pdf/1412.7647.pdf

 

[expiated]

You think that stuff is relevant in the modern world? I have skimmed through the The Millionaire Next Door and found it to be very dated.

Not to mention that the actual research puts the percentage of retail Forex traders enjoying significant profits at about 16%, not 0.0001%, which goes up to about 30% when you add in those who are trading with only marginal profits or at break even—not to mention I already have a system where, thanks be to God, losing trades are almost nonexistent.

 

[gaussian]

You think that stuff is relevant in the modern world? I have skimmed through the The Millionaire Next Door and found it to be very dated.

I'm really not sure how "don't spend more than you make, invest wisely, and live frugally" is outdated advice. Could you explain?

 

[Same Lazy Element]

I'm really not sure how "don't spend more than you make, invest wisely, and live frugally" is outdated advice. Could you explain?

I don't need a book to know that wealth is accumulated by spending less, making more and investing the difference. Even "live frugally" is not needed in that sentence.

However, the guidance you really need as a "mid-grade rich person" is a cornucopia of approaches to the intricate details of daily financial lives - taxes, insurance, various financial products, real estate management. These things have changed a lot since the 80s and even more since the 20s.

 

[expiated]

I don't need a book to know that wealth is accumulated by spending less, making more and investing the difference. Even "live frugally" is not needed in that sentence.

However, the guidance you really need as a "mid-grade rich person" is a cornucopia of approaches to the intricate details of daily financial lives - taxes, insurance, various financial products, real estate management. These things have changed a lot since the 80s and even more since the 20s.

Hear, hear! A Certified Financial Planner is required to have a bachelor's degree from a university-level education program certified by the CFP Board of Standards; three years of experience; passage of a six-hour, two-day financial planning exam; 30-hours of mandatory continuing education per year; and a commitment to uphold a fiduciary standard in order to work with clients on a personal level based on the client's needs and goals with respect to every major area of financial planning—a standard unattainable to anyone simply offering spoonfuls of general common-sense advice in whatever context.

 

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Finding a Qualified Financial Advisor

Page 174

You can find fee-only financial advisors via the National Association of Personal Financial Advisors (napfa.org), fee-only financial advisors who charge an hourly rate via Garrett Planning Network (garrettplanningnetwork.com), and fee-only advisors who charge an annual retainer and prepare taxes through the Alliance of Comprehensive Planners (acplanners.org).

Page 73

The best way to check on a potential financial advisor’s licenses is through the website of the Financial Industry Regulatory Authority (finra.org) which tracks each and every advisor who is legally permitted to sell securities. Enter the advisor’s name into the FINRA database to learn what securities licenses the advisor actually holds, and whether or not any complaints, disciplinary actions, suspensions, or frequent changes of employment appear on the individual's record.

List of Financial Advisors to Check:

Vida Private Wealth - No results!
ACap Asset Management - Is on the list compiled by napfa.org
Darrow Wealth Management
Fischer Investment Strategies
HCR Wealth Advisors - (Gregory Sandor Heller is regulated by FINRA and has 28 years experience)
Montecito Capital Management Group - No results!
Pathway Financial Services - Only one advisor listed (she has five years experience)
Pure Financial Advisors
SFE Investment Counsel
The Tax Consultancy Group - No results!
1080 Financial Group
Affluencer Financial - No results!