On Tue, 29 Nov 2005 03:58:50 -0600, alanryder[at]aol.com wrote:

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Do what I did, marry a CPA and you have built in confidence there is
never a conflict of interest.

BTW, I was born, raised and educated in NYC FWIW but moved south.

"Will Trice" <wwtrice[at]paragondynamics.com> wrote
snip; thanks for the direct quotations in this post and your
other one today
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I agree. (I thought my posts to this thread implied as much,
but clarification can't hurt.)

Elle wrote:

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Yep, I agree. It just sounded like you were slamming financial planners
in general, in part based on this book. I wanted to convey to the OP
that there are quality advisors and that there is nothing wrong with
seeking advice.

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Well, this is good question, one I'd like to see the FPs on this group
answer. How does an FP build a solid reputation in the beginning?

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pg 74:

"Why are doctors lagging behind on the wealth scale? There are several
reasons. Foremost among them is the correlation between wealth and
education. This relationship may surprise some people. For all
high-income earners (those earning at least $100,000 annually), the
relationship between education and wealth accumulation is _negative_.
High-income [prodigious accumulators of wealth] are significantly _less_
likely than [under acummulators of wealth] to hold graduate degrees, law
degrees, or medical degrees."

The reasons given are that folks without advanced education enter the
workforce earlier and with less debt, so they get a head start on
saving. Then there is the societal pressure on educated professionals
that you mentioned in an earlier post.

-Will

Elle wrote:
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pg. 76-77:

'Many physicians have told us that they have had bad investment
experiences with investing via cold callers. In fact, many have been
burned so badly that they never again invested in the stock market...
And, in rejecting the stock market, they figured that left them with
more money for spending. This attitude is not as rare as one might think:

_A plastic surgeon added that he had three boats and five cars but
hadn't gotten around to assembling a pension plan. Financial
investments? Didn't have those, either. Speaking of his colleagues, the
surgeon said, "I don't know even know one guy who hasn't been beaten to
death in the financial markets. As a result, they don't have anything.
At least I'm going to enjoy spending my money."_'

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Yep, this is also discussed as an issue.

My point here is that I don't want to discourage the OP from getting
*qualified* investment advice. Of course, some investor education is
necessary to help distinguish qualifed from unqualified.

-Will

"Will Trice" <wwtrice[at]paragondynamics.com> wrote
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I certainly could have misremembered above, but I don't
think this particular quotation rebuts my claim. The point
of the quotation seems to be that underaccumulators don't
spend the time to find /quality/ advisors. To me, that
implies one thing these folks do is trust too much the
advisors they do get.

Plus, I still recall words from the book saying something
about how financial advisors targeted doctors, because they
were easy prey. (I see in a subsequent post you say this is
so, but suggest that one distinguish between "cold callers"
and reputable financial planners. Not sure the book made
such a distinction. Plus, how does one build a reputation in
the first place if one is just getting into the business? I
don't fault the cold callers per se, as long as they respect
the law about intruding via telephone into people's homes.)

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No, but IIRC medical doctors sure got a lot more attention
as underaccumulators compared to others.

I should clarify again I am not trying to slam doctors as
fools or anything. I think there is a system in place that
burns them out very quickly. Their poor decision-making when
it comes to accumulating wealth (in MND terms) can be
explained rationally. Also, given reports on skyrocketing
malpractice premiums for doctors and even higher attrition
rates from medicine, this info we are discussing here is
something that I would hope MDs or future MDs reading here
could use. Because my understanding is there remains a
shortage of doctors in many parts of the country. Economics
of malpractice is also driving some doctors out of certain
practice areas. These are not good things.

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That I don't recall being said explicitly or really even
being implied.

I think a lot of note was taken of how high accumulators of
wealth weren't at all necessarily well-educated, if that's
what you mean. That's where the "next door" part of the
title of the book comes in, IMO.

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"Will Trice" <wwtrice[at]paragondynamics.com> wrote
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I don't remember their "giving up," as you imply, as a
consequence of a bad investing experience and so spending
money profligately.

I remember talk about how doctors caved to claimed societal
pressure to dress a certain way, drive a certain high cost
model of car, live in fancy neighborhood, etc.

Elle wrote:

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Well, this was a reference to cold-callers as opposed to reputable
financial planners, but nevertheless you're correct. The point was that
since these doctors did not bother to learn about investing themselves,
they believed whatever anyone told them. After these doctors get burned
a few times, instead of buckling down and educating themselves, they
decide to spend their money while they have it (instead of losing it to
the latest hot stock or whatever).

-Will

BMS wrote:
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I believe that you need to reread the book as well. The point of the
example you cite was not that doctors do not get advice because they
think they can do anything, but that they tend to be massive consumers
and poor savers. The doctor in your example reported to the authors
that he had spent more than $70,000 on a vehicle (including insurance)
in the year of the survey for the book, but had only saved $5,700 for
retirement. All this with an income of more than $700,000!

-Will

Elle wrote:

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While it is true that this book claims that medical doctors are poor
accumulators of wealth, it does not make the claim that this is due to
them trusting the advice of others. In fact in Chapter 3 (the one with
the medical doctor theories), the book says, "There is a strong
correlation between investment planning and wealth accumulation. [Under
accumulators of wealth] spend less time than [prodigious accumulators of
wealth] consulting with professional investment advisors; searching for
quality accountants, attorneys, and investment counselors..." The
authors don't limit the problem to medical doctors, but claim that there
is an inverse correlation between level of education and wealth
accumulation for various reasons.

Of course, I agree that one should educate oneself even when relying on
the advice of others.

-Will

"BMS" <mcfarland[at]yahoo.com> wrote
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I do not recall the book saying doctors were DIYers when it
came to investing, but it might have, and then shown they
really were inept at it (but surely that's due to laziness).
It's hard to believe that doctors do their own financial
planning, since I think it does take a fair amount of time.
Hence a sizable number of millionaires-next-door had their
own business (to be distinguished from a medical practice),
and so financial planning was something they breathed much
of the work day.

I thought I read in the book that doctors are a prime target
of financial planners, since they give in easily (for
whatever reason). Being meat to financial planners,
naturally they are going to deal with some of questionable
ability. Hence the poor statistics for MDs re accumulating
wealth.

Re the car example: I remember this, but think it's at least
in the same vein as the second part of my statement:
"[D]octors trust others to manage their money, and put
little time into understanding it themselves."

It also talked about doctors (and other professionals)
simply overspending their incomes, due to succumbing to
societal pressure: They had to have a nice house and
expensive car, or people would think less of them, somehow.
Now I guess you're saying that's because MDs really are
stupid. I tend to think they're not but instead don't have
the time and energy to plan financially. That's a stupid
choice but one grounded in a reasonable explanation, AFAIC.
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paying back stunning school loans. How on earth would
someone on this kind of treadmill have time to plan his/her
finances? Granted they should, but that they don't comes as
no surprise whatsoever. Backing this up are what seem to me
to be increasing anecdotal reports of MDs bailing from the
profession after a couple of decades.

You need to go back and read the book.

I recall it was because doctors think are smart enough and can do anything
they don't bother to get advice. An example from the book was about how the
doctor thought he was smart investor because he ran around getting the best
price for the 60,000 car.

"Elle" <elle_navorski[at]earthlink.net> wrote in message
news:1v_if.7116$wf.4620[at]newsread3.news.atl.earthlink.net...
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"W. Wells" <otf70[at]nc.rr.com> wrote
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I don't know if you heard the following, but I think it
bears mentioning. According to the authors of _The
Millionaire Next Door_, medical doctors are terrible
accumulators of wealth. The authors indicate that it is
precisely because doctors trust others to manage their
money, and put little time into understanding it themselves,
that they rate so low in ability to accumulate wealth,
despite often high net incomes. (No doubt having to pay back
education loans doesn't help. But even after these are paid
off, the authors indicate, MDs tend to be fools when it
comes to money management.)

So just my opinion, but I think doctors and others with high
incomes should not be so free in trusting just anyone to
manage their finances.

While you're at it make your own bread and build your own house. Its not
hard and if you are smart enough to make the money, you can those things as
well.

The best way is through referrals. Talk with people you trust and find out
what they do and who they use.

There is no way based on how they get paid to determine if they are right
for you. Meet with them and interview them and work with somebody you feel
comfortable with.

They are going to get paid for their services. They will get paid with a fee
from you or by selling you something that pays them a commission. If you pay
them a fee they are more likely to handle your money better rather than look
for something that will pay them the most commission. Believe me, they are
most interested on how much money they make for themselves.
My advise is to do your own investing. If you are smart enough to make the
money, you are smart enough to invest the money. There are no magical
tricks. You can read and figure it out for yourself. Keep it simple at first
until you become more familiar. It is not hard to increase your knowledge as
you increase your money to invest with.
I made the mistake in thinking these CFP knew something that I didn't.I
found out they mostly know where to put your money that makes money for
THEM.
The only exception to this rule is that you are making large sums of money
and have NO time to devote to reading about investing. Doctors are a typical
example of this.
<alanryder[at]aol.com> wrote in message
news:1133223509.776207.10840[at]g14g2000cwa.googlegroups.com...
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For those of you who are using a financial planner, is there any group
you're happy with? I would rather have one who is a CFP, and who won't
make me feel like a mark, or cash cow for them. Are there any that
don't work on a direct commission, and are paid by the firm based on
the quantity they sell, not what they sell? I'm in the NYC area. I
would prefer to deal with a well know firm that has no fee for the
service. Any recommendations?