Author Topic: And you call yourself a Certified Financial Planner?  (Read 3107 times)

tomatops

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And you call yourself a Certified Financial Planner?
« on: December 23, 2016, 07:21:19 AM »
This article has good intentions (it was also featured in the Globe & Mail) but, let's be real, I am concerned when Ms. Kett says take 20% of income to pay down debt or save and live off of the other 80%.

This only re-affirms my belief that many planners are off the wall and full of crock.

http://www.680news.com/2016/12/22/why-its-a-good-idea-to-review-your-financial-plan-at-least-once-a-year/

financialfreedomsloth

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Re: And you call yourself a Certified Financial Planner?
« Reply #1 on: December 23, 2016, 07:48:21 AM »
This article has good intentions (it was also featured in the Globe & Mail) but, let's be real, I am concerned when Ms. Kett says take 20% of income to pay down debt or save and live off of the other 80%.

This only re-affirms my belief that many planners are off the wall and full of crock.

http://www.680news.com/2016/12/22/why-its-a-good-idea-to-review-your-financial-plan-at-least-once-a-year/
Not really, average savings rates seem to be below 10% (https://data.oecd.org/hha/household-savings.htm). So 20% is a pretty ambitous goal for the average person. Only china is above 20% and Switserland is close to 20%.

Do not expect mustachian advise form a financial planner. It is also my belief a moustachian financial planner would not remain a financial planner for a long time and not because he would retire early but because he would soon find himself without clients: the moustachians would not need his services and the non-moustachians would not want his services ...

slugline

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Re: And you call yourself a Certified Financial Planner?
« Reply #2 on: December 23, 2016, 10:42:11 AM »
Hang on. . . .

Quote
Kett suggests people try to live with 80 per cent of their net income, and put the remaining 20 per cent into investments, or paying down debt.

My usage of "net income" is the same as the net pay on a paystub. So this is what's leftover after deductions, including retirement plan contributions.  A person who is making healthy retirement plan contributions and not spending 20% of their net pay is probably doing just fine to me, and could in fact be a bona fide Mustachian.

MilesTeg

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Re: And you call yourself a Certified Financial Planner?
« Reply #3 on: December 23, 2016, 11:04:57 AM »
Perfectly good advice. Hell, if that was actually the advice everyone followed there would be a lot less financial problems for people in the world. The MMM advise is targeted at people who want to FIRE, this is targeted at normal people.

Playing with Fire UK

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Re: And you call yourself a Certified Financial Planner?
« Reply #4 on: December 23, 2016, 11:34:02 AM »
I can see 20% into investments. But if you have high interest debt every available penny should be going towards the debt. It's not okay to put 20% towards debt and buy yourself a present for doing so well.

Playing with Fire UK

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Re: And you call yourself a Certified Financial Planner?
« Reply #5 on: December 23, 2016, 11:37:09 AM »
Had a closer read of the article. The CFP is talking about a vacation as a short term saving goal.

Saving 20% and spending it on a vacation isn't what I call saving. It's spending. Yes, it's better to pay for your holiday with accrued funds rather than debt; but it's still spending not saving.

kayvent

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Re: And you call yourself a Certified Financial Planner?
« Reply #6 on: December 25, 2016, 05:38:29 AM »
It is actually a pretty good article and despite being short has a pretty good gem:

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Alim Dhanji, a senior financial planner with Assante Wealth Management in Vancouver, says another piece of advice is to re-evaluate discretionary spending every year.

“When you do a budget, you’re consciously aware of where your money is going and how much you have left over at the end of the month,” he said.

Sure earlier in the article they advocate for a savings of 20% of net and some of the savings is for short-term spending goals but it is better than 0%. If this was university and someone following it was graded on a bell curve, they'd get at least an A-.
« Last Edit: December 25, 2016, 06:20:41 AM by kayvent »