Going it alone. It’s a familiar thing. We think we know what we’re doing until a light bulb goes off. Sadly and so often, that bulb doesn’t illuminate until we’ve failed at X, Y, or Z. That’s why you need to build your team of financial advice experts.
Having experts who will steer you clear of failure is vital when it comes to optimizing and protecting your investments and assets.
Surrounding yourself with individuals who have focused knowledge on a specialized topic is priceless. In this post, I’ll lay out what a dream team looks like for our situation, and then I’ll ask you, fine readers, to chime in with whom you lean on for your Dream Team.
Rule #1: You Don’t Need a Financial Planner
The inspiration for this piece comes from a book that’s quite provocative: Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity by Garrett Gunderson. I’ve shared a few thoughts on the book already.
I don’t agree with Gunderson that you should avoid the 401K altogether and go hog-wild into real estate. I also don’t agree with him on the necessity of Whole Life Insurance (stick with Term Life policies) He’s also big on stuffing 100 dollar bills under your mattress for when the Zombie Apocalypse strikes, essentially…
That aside, Gunderson’s book was a key thrust for us to fire up our real estate business. I took a two-year hiatus from 401K contributions to save up for down payments on rentals.
I can’t be upset about missing out on those two years in the market. Not really. I mean, all that moolah wound up in an equally, if not more lucrative arena, with a housing market as blazing hot as the S&P 500.
Gunderson’s book dives into many personal finance ponds beyond “Lake Anti-401K.” If you read it, you’ll conclude rightly by the end that he’s marketing the absolute snot out his bigger enterprise: personal finance coaching.
That’s right, there’s a phone number and email with free consultations promised. Still, many good nuggets emerge from his work, including the importance of building a strong team of experts to help you manage your wealth and protect your assets.
These Are the Financial Advisors I Keep in My Corner
- Investment Property Team: Agent, Mortgage Broker, Home Inspector
- Insurance Broker
- Estate Planning Lawyer
- Mentors (Career / Business)
Who’s missing? Well, I don’t have a personal chef or nutritionist. Unless you count my lovely wife, Mrs. Cubert! Long gone from this list is the tried and true Financial Planner. Farewell!
You might consider a financial planner for the occasional one-off consult (fee-only advisors). Then, the risk of being sold products on commission is diminished, and no one is taking a percentage cut of your retirement portfolio. John Schwarz wrote about this extensively in his excellent book, This is the Year I Put My Financial Life in Order.
Follow his advice on this one. Otherwise, your best financial advisors include Mr. Money Mustache, Fritz over the Retirement Manifesto, and Tanja at Our Next Life. Mr. 1500, Mrs. Frugalwoods, and the Physician on Fire are great sources as well. Dive into the FIRE community and educate yourself!
A Good Accountant Is the Cornerstone of Your Advisor Team
The tax code is crazy complicated. As great as Turbotax is, and I’ve used them for many years, they can’t help you near as much as a flesh and blood professional accountant.
Case in point? Turbotax never bothered to “tell” me that my wife’s new adjustable chiropractic table qualified for an ADA tax credit of $1,000. Our accountant caught it a year after the purchase and was able to apply for the credit in arrears. That was the end of Turbotax for us.
And once we got into rental properties, Turbotax wasn’t going to be of much use anyhow. There was simply no way that the tool was going to help me decide whether to go with standard or accelerated depreciation on our rentals.
Know this: A good accountant not only helps you prepare tax returns, he or she also helps you mitigate your tax bill. Meet with your accountant at the beginning of each tax year to plan your tax strategy.
At the end of the day, we’re more than happy to pay the roughly $1,000 per year accounting fees to avoid paying Uncle Sam significantly higher sums in taxes. Don’t be penny-wise and pound-foolish with your taxes. Find a good accountant – the cornerstone of your Team of Experts.
A Team of Financial Advice Experts Is Crucial If You’re a Landlord
How did we find our accountant? Through another team member: our investment property real estate agent. He uses our accountant for his businesses too. Like us, our agent has a crazy complex combination of businesses and income streams that would make it an absolute nightmare come tax time.
You’ll find it easy to build your team through similar networks. “Who do you use for this?” and “Who do you use for that?” Being able to lean on people who have their sh*t together is incredibly valuable in saving you time and worry.
When it comes to rentals, you need an agent to find you good houses. In my experience, an agent who is a business person first is your best bet. My agent never tries to sell any house we see. If anything, he’s more skeptical than I am. I never feel pressured. The minute an agent starts to push a house on you, send him or her packing.
Building a strong team with real estate means finding an honest and reliable mortgage broker. I’ve had success with a national bank for our financing needs. Nothing like a little “Minnesota Nice” coupled with workaholism to make for the perfect mortgage broker. My guy would bust his tail to make sure underwriting got everything they needed and that closing would go off without a hitch.
To round out your rental property team, it’s important to find a reliable home inspection company. I’m telling you, good inspectors are hard to find. They are the bearer of bad news, and you LOVE them for that.
You want that cute little house to rent and make a killing on, but lo and behold, inspector Sam says the foundation is about to cave in at any moment. Oh, and he found a dead mouse colony inside the furnace burner chamber.
Insurance Agent: Vital to Your Financial Advice Team!
We’ll keep this short so you don’t doze off on me again… Insurance is important when you run a business or two. It can also be quite expensive. We pay for homeowners coverage on six properties, umbrella coverage, and auto. Eventually, we’ll be adding life and disability to the mix. Ay caramba!
Thanks to the insider help from my buddy/mentor who got us into real estate, we now have an insurance broker. These are the magicians who go off and find coverage options at discounted rates for sweet, sweet commissions. The discount comes by aggregating all of your policies with one company. It makes things nice, tidy, and easy for everyone involved.
Just be sure to do your homework to learn how much coverage you need. As good as many brokers are, some are only in it to rake in large commissions from unsuspecting clients taking on more insurance than they need.
Are we done with insurance? Can our broker come off the bench now?
Also Essential: Your Estate Planning Lawyer
Oh no! I went there. This one’s tough because no one wants to think about death. Death sucks. But it is the one thing, apart from social media addiction, we all have in common.
Careful planning for your survivors is not something you should put off to a later date. Get over your superstitions and sit down with an estate planning lawyer PRONTO.
There have been too many cases of famous people dicking around and leaving their estates up to probate court, simply because they couldn’t be bothered to file a will. It’s not a difficult process. A good estate planning lawyer knows how to walk you through the process with tact and you should never feel intimidated.
It took us (me and Mrs. Cubert) two meetings – One to convey our wishes, and another to review the finished product. Now we won’t have to worry about our survivors going through a court-appointed probate disaster to figure out who gets what and who gets custody of the kids. Don’t leave it to chance!
We paid roughly $500 for our living will and durable powers of attorney. Adding the power of attorney makes sense as well since you’d probably want your significant other to make choices on your behalf if you wind up incapacitated, vs. some total stranger. I know that if the stuff hits the fan, Mrs. Cubert will make the right call (and sneak in a craft beer when the nurse isn’t looking).
Later on, you may opt to update your will or upgrade to a revocable trust. A trust is useful for distributing inheritance over time to children. You don’t want them getting the whole stash all at once, unless they know everything they need to know about money at 18.
A Team of Financial Advice Experts Is Incomplete without MENTORS
Mentors come in all forms. Anyone you feel you can trust to give you sound advice qualifies as a mentor. This is true so long as you’re not paying this person, in which case the “mentor” becomes an “advisor.”
My colleague at Cubicle Land, Inc. who got me into real estate is an excellent mentor. He knows the insides and outs of rental property investing, and a thing or two about home construction. A great combination of knowledge right there.
Mentors should be one-on-one relationships, where you can bounce questions off someone who’s “been there, done that.” But all too often we find our time consumed by commitments. Finding the time to meet with a mentor isn’t always possible.
I tend to follow more of a “ghost mentor” approach these days. All that means is I get what I need from the wonderful personal finance community, for all things early retirement-related. I figure anytime I bug one of my Team of Experts with a simple question in an email, that’s a form of ghost mentorship.
I reckon the same concept applies to books. I just finished Unshakeable: Your Financial Freedom Playbook by Tony Robbins. You can’t help but feel mentored after reading passages that seemingly apply spot-on to your situation.
Ideally, you should find a real, live person to compare notes and experiences with. We started a bloggers’ roundtable happy hour here in the Twin Cities last month and I consider every blogger I meet a mentor.
Time to Build YOUR Team of Financial Advice Experts
You’re the quarterback. Don’t expect your team to make the big, key decisions for you. You’re the executive. The commander-in-chief. The head-honcho, big-cheese…
With all that responsibility on your shoulders, you better have a grip on your health and relationships. Having a team of experts is great, but your most important team is the one comprised of your family and friends. The MVP on your team? Well duh, that’s your better half!
My wife is the driving force behind a string of successes I’ve achieved over the years. The big goals and dreams, and all that jazz about early retirement? It doesn’t mean a dime without Team Family.
Allow me to put down these heavy stone tablets for a sec. Remember that as smart and well-informed as you might think you are, you’re only as good as the people you surround yourself with. Get your Team of Experts lined up. Handle them with care, respect, and loyalty. And remember to put all the good care and feeding into Team Family too!