The Worst Investment Advice I Ever Heard–Everywhere

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My financial story creates an interesting juxtaposition, as I recently shared with Steve Chen on the NewRetirement Podcast. On one hand, my wife and I did many things well with our money. We achieved financial independence quickly, allowing me to retire last fall at 41 years old. 

Don't listen to bad financial investment advice

On the other hand, we followed bad investment advice that in retrospect could only be described as pure stupidity.

The Good

My wife and I are reasonably intelligent, hard-working people. Both of us are first generation college graduates from working class families. We each earned three college degrees and had professional success.

We were financially savvy enough to get out of debt quickly, pay off our mortgage in seven years, and save approximately half our income throughout our careers. Throughout the accumulation phase, we managed to maintain our high savings rate while living lives filled with adventure, travel, and amazing experiences while we were earning normal professional salaries. 

The Bad

We began investing with a financial advisor who we blindly trusted, handing him large sums of our hard earned money. We later learned we paid approximately eight times more in hidden fees than we thought we were by following his investment advice, costing us thousands of dollars each year. Following horrible advice led to costly tax planning blunders that cost thousands more annually. This combination of excessive fees and unnecessary taxes cost us nearly $20,000 in just the last year we used his services.

The Ugly

We weren’t ignorant just once. We willingly followed this investment advice for nearly a decade. Considering lost compounding over decades, this was a million dollar mistake.

How did this happen to us? It was a direct result of following what I now consider the worst investing advice you can get. Unfortunately, I hear and see it often.

The Worst Investment Advice

Conventional wisdom says investing is difficult and most people can’t manage their own investments without the help of a financial advisor. Even well-known financial pundits, who encourage taking control of other aspects of your financial life, suggest you punt when it comes to investing. See Dave Ramsey’s investment advice as the preeminent example.

I disagree that investing is complicated and requires professional help, but that’s only the precursor to the worst investing advice.

The worst advice, which I read and hear frequently, is that you should find a good financial advisor by seeking the recommendation of someone you trust. Why is this such horrible advice?

Our Society is Financially Illiterate

On average, we save little to nothing. Even people like my wife and I, who are good at earning and saving money, often don’t know how to invest it. That’s why we thought we needed a financial advisor. Those who do save and invest consistently underperform market benchmarks by several percentage points a year.

The odds of your childhood best friend, the person in the cubicle next to you, or your Uncle Bob referring you to a good financial advisor are slim. It’s the blind leading the blind.

Unfortunately, people don’t know what they don’t know. With good intentions, people want to help. You will have friends, colleagues, and family who are happy to refer you to “their guy.” This is how we found “our guy.” We in turn referred others before realizing our errors.

Letting Down Your Guard

Because you are being referred by someone you know, like, and trust, you go into the relationship with the financial advisor with your guard down. We handed over large sums of money without doing any investment due diligence.

As bad as our outcome was, it could have been worse. We weren’t scammed out of our money. We willingly went along with horrible advice that is pretty common for many investors.

Our Decision Process

We found our financial advisor by asking my parents how they invested. They used this financial advisor and his company for years. My wife and I knew our household income was substantially more than my parents’. They did well enough to fund my and my brother’s college tuition while being on pace for their own secure retirement. I assumed they were getting good advice at a fair price.

Years later, after I began writing about investing and retirement planning, I shared what I had learned with my parents. They eventually asked me to sit down and decipher their portfolio for them. I explained what they were invested in, the associated risks, the conflicted advice they were receiving, and showed them an itemized list of expenses they were paying.

From this new perspective, they realized they accomplished their financial goals in spite of, not because of, the advice and services they received. They left the financial advisor as well.

Lightbulb Moment

The idea that investing is complicated was deeply entrenched in my own psyche. Despite our awful experience, my wife and I still didn’t want to manage our own investments initially. We assumed we just needed to find a better financial advisor. I asked a coworker, who I believed had an income and money philosophy similar to mine, how he invested.

He used a financial advisor because he didn’t feel confident investing on his own. I inquired as to how he selected his financial advisor. He told me that Dr. “X” and Dr. “Y” both invested with her. He assumed that if the advisor was good enough for them, she was good enough for him because, “they make way more money than me.”

At that moment it hit me. How crazy is this idea that we should seek a referral to a financial advisor?

How do the skills that enable a surgeon to command a hefty salary translate into knowing how to save and grow that money or evaluate the financial advisor doing it for them? They don’t!

What skills that enable someone to sew together a torn rotator cuff or replace an arthritic hip translate into the ability to select an appropriate asset allocation, evaluate tax efficiency of investment options, or determine the need for an annuity. None!

Odds are that although they have your best interests in mind, your friend or family member’s judgement and knowledge don’t bode well for you either.

My Alternative Investment Advice

There is no substitute to self education. Those unwilling to learn are destined to repeat these same mistakes. The financial advice industry is too rife with conflicts of interest for you to enter without equipping yourself with knowledge.

Maybe the best summation is by James M. Dahle, MD in his book The White Coat Investor. He says: “The main difficulty with choosing an investment advisor is that by the time you know enough to choose a good one, you probably know enough to do your financial planning and asset management on your own.”

You can find extensive information in our archives to help you become a DIY investor. There are plenty of others dedicated to demystifying the process of investing as well.

Take time and educate yourself. Then, if you still think you still need help with your investments and financial planning, go out armed with knowledge and find a financial advisor that fits your needs.

[Contributing Editor Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris' writing has been featured in MarketWatch, Doughroller, Business Insider and RockStar Finance. He is also the primary author of the forthcoming book Choose FI: Your Blueprint to Financial Independence. You can reach him at]

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  1. Jay Leavitt says

    From Bogleheads, “There are two types of financial advisors: (I) the ones who don’t know anything, and (ii) the ones that know they don’t know anything.” Dr. Dhale’s quote is quite apropos.

    • Chris Mamula says

      I like that quote. Not quite that dogmatic against the financial industry, but there are a lot of perverse incentives that can make otherwise good people give bad advice.

    • Gary Simms says

      Just remember the vast majority of investment advisors as salespeople whose sole function is to extract as much money from you for their firm as possible. If they don’t do this, they are replaced.

      I have a friend that considered going to work for a large financial organization many years ago.

      The deal was you would go to their school for 8 straight week, 24 ours a day. The tuition for this school was $10,000.

      If you quit or they dismissed you for any reason, you lost the $10,000.

      They had control of you 24 hours a day, 7 days a week, for 8 weeks.

      They controlled your whole life. What you saw, what you thought, what you ate, how you dressed, how you cut your hair, and on and on.

      My friend saw this for what it was. Brainwashing to a soulless selling machine that towed the corporate line of sell, sell, sell. Being an ethical soul, he didn’t sign on, but he stated all the successful salespeople had completed this indoctrination.

      Look through the fancy suits, fine hair cuts, and amazing offices (all of which you are paying for.) and look for the results. Remember John Bogle’s eternal triad of investing: risk, reward, and COST.

  2. I have lots of these conversations around the office when people talk about “I need to get a financial advisor.” Mine start with, “No you don’t.” and end with me emailing them a word document I put together with different links to sites that not only explain “complicated” financial and investing ideas, but also ones that show them how to build a couch potato portfolio or other varied portfolios with the names of the investment funds even. I doubt it gets used very often, but it doesn’t stop me from constantly explaining that DIY investing is not that different from a financial advisor and it saves a LOT of money.

    The worst conversation I had went like this Guy: “I have an advisor, my parents have used him for years he’s a good guy.”
    Me: “do you know how much you pay in fees?”
    Him:”No… But he works hard to make us a lot of money. The more we make, the more he makes. So he wants us to do good!”
    Me: “You heard what you just said right? The more money you make the more of it he gets to keep…”
    Yep, interesting conversations. 🙂

    • Chris Mamula says

      Sadly, ten years ago, I was that guy.

      The idea that investing is complicated is pretty deeply engrained in many. Have you had much success getting people in your office to buy in?

      • Gary Simms says

        It’s engrained by the advisors that make their fortunes from hard working people.

        When you explain the four categories of investments and that 4 simple mutual funds can easily give you all the investments you need, people say, “It can’t be that simple.” But it is.

        I;m not giving huge amounts of cash to people to sit in posh, air conditioned offices while I manage a professional medical practice.

  3. I am a self-educated DIY investor who invested in low cost (Vanguard) index funds for many years. However when I approached (traditional) retirement age, I felt I needed help with retirement planning. I found a guy (after 2 others that did not work out after interviews and short try-outs..) who is reasonable, provides great service, well-credentialed and who’s philosophy aligns with mine (conservative). I suppose this post will generate a lot of anti-advisor comments because I know there are a lot of cautionary tales like yours. I’m here to say if you follow the advice in the last sentence of your post, it could turn out fine and add not only a lot of financial value, but also piece of mind. Just be careful, interview robustly, don’t dive in blindly and educate yourself about advisors-there are a few good ones out there if you look hard enough.

    • Chris Mamula says


      I started out writing as a consumer advocate with the idea that we should all be DIY investors. You are perceptive in reading in that last line that my thoughts have evolved on this issue and I agree with you. I’ll be writing plenty more about this topic. Stay tuned!


      • My conclusion on the biggest advantage to turning over your investment strategy to a financial advisor is psychological. Many can’t resist temptation to tinker when they shouldn’t, or lack confidence in their own discipline to stay the course during market turbulence. Outside financial advice or educated confidence is critical on the run up to stepping away from full time work. And the spend down strategy during those years before drawing SS is equally intriguing. Thanks to the growth of sound practical advice here and elsewhere- this is now much easier for us to navigate. T-minus 75 days for me.

        • Chris Mamula says

          Agree Chuck. Exciting times for you! Congrats and good luck.

          • Hi again Chris-Yes thanks for your reply. I see I correctly predicted the plethora of anti-advisor comments, not surprisingly. I see a general theme in the comments that folks are equating retirement planning advisors with investment advisors, which is a shame but predictable considering this community and the overall universe of advisors out there. If one finds an advisor who offers holistic retirement planning to mitigate a range of retirement risks, including longevity, liquidity, sequence, spending and market risk, amongst many others, I think one can do at least as well as a DIY investor, even with advisor fees I am paying, with less downside risk. Of course time will tell on that. Only a small portion of what my advisor does is investment planning.

          • Chris Mamula says

            Agree Rob. I’m not dogmatic. Unfortunately my experience is common b/c many in the financial services business have given a black eye to the whole industry.

    • Gary Simms says

      You need advisors. Attorney, physician, dentist, etc.

      I have seen the spectrum of advisors from gross incompetence to outstanding advice. Choose carefully, but how does a novice do that? Throw away that urge to get something for nothing and READ. Bogle on Mutual Funds: New Perspectives for the Intelligent Investor, by John Bogle. Bogle even has chapter summaries at the end of each chapter. Read those first, the read the chapter. This is essentially his PhD thesis.

      Now you know the basic types of investments and the differences among them.

      How many types of money market funds are there? Read the chapter on money markets and you’ll know.

      Now when you interview your advisor, as him/her that question. Do they know? If not, you know more than they do! Want to pay them for that?

      The other book I recommend is for mutual fund analysis. It’s by NAIC and part of their Better Investing series of books.

      It’s entitled Mutual Fund handbook, by Amy Crane. It’s secret are two page forms to evaluate mutual funds from Morningstar Mutual fund Data sheets available from your library and then, one page comparison forms to compare those similar mutual funds. There are also forms to follow the funds you purchase to detect changes in them over time.

  4. I am very lucky that I am a DIY investor and will NEVER hire a fee-only, genuine fiduciary adviser because they charge too much.
    Even if the adviser is super nice and knows all about indexing, and loves and uses Vanguard for his or her clients, the .75% to 1.25% AUM to manage my portfolio is hideous! I know how to make distributions and manage my portfolio thank you very much.
    And YEAH! I am very fortunate that I have the know-how and confidence to manage. IT IS SO SIMPLE once you figure out all of the garbage on CNBC and to IGNORE ALL OF IT. YES! IGNORE EVERY PIECE OF FINANCIAL NEWS and stick with your low cost, diversification plan. My portfolio is very boring, and boring is great! Made 9% last year with a 33% stock 67% bond portfolio. All of that garbage of high-interest rates will be killing us with bond funds is not factual. I used intermediate maturity bond funds.
    I only pay .07% fee and the savings I have already made in the last ten years I was able to buy two electric cars, Leaf and Telsa, remodel kitchen and bath, and trips abroad.

    • Chris Mamula says


      Agree that DIY investing is not as hard as most assume. However, disagree that most people can/will do what it takes to repeat your success. Also, disagree that an advisor CAN’T add value (though do agree that most advisors currently do not).

      To clarify for other readers, what you are referring to with AUM fees is not the only model to pay an advisor. I also hate that model, but there are other ways to pay for advice for those that need it. This is actually the topic of next week’s post. Stay tuned!


      • Chris, Value added is another topic. But we agree about AUM. I also agree with other ways of payment. What happened to the hourly pay that was screamed about a decade ago? Well, I’ll tell you: FAs can make more money from the AUM than from commissions (which is another hideous payment). AUM pays the adviser, year in and year out, no matter what the market does or what the FA is doing. Of course, they are fiduciaries but the AUM destroys much of the return over time.
        Heck, we all know what all OTHER professions charge. My plummer who charges $90 per hour and plumbers seem to do quite well in our economy so why can’t a financial adviser get along on $200-$400 per hour!? Then along came the AUM which I have been against for years. AUM fees destroy much of the so-called “value added” by an adviser.
        Still, Chris, I guess you mean that their advice will pay for itself in higher returns, which is a sales pitch as much as anything else.

        • Chris Mamula says

          I don’t think an advisor can add value by delivering higher returns by knowing the future and having a magic asset allocation. I do think they can add value for those that can’t control behavior. I also think they can add value for those that can’t/won’t put in the work to learn about topics like tax planning, claiming SS, etc.

    • Gary Simms says

      There seem to be three different types of investors: those that can and do manage their own investments, those that can, but need a bit of reassurance to do so, and those that simple can’t or don’t want to.

      I’m now in the first category, but used to be in the second. I found mentors on the internet in different forums whom followed the John Bogle method of investing until I graduated into the first category.

      • Chris Mamula says

        Agree with that Gary. IMHO, too many people think they’re in the first category, when in reality they would benefit from a little help, and too many people in the third category think they can outsource to an advisor and not be involved. Unfortunately I know this is true b/c I was there and I see it all the time. Hopefully sharing my story will be a cautionary tale that even if you don’t want to do it yourself, you need to be an informed consumer and get into the second category.

  5. The most important thing is to accept getting average returns in your retirement accounts (which when compounded over time does lead to 7-figure accounts). It can be hard to accept average; for example, most people consider themselves a better than average driver, which obviously can’t be true. I was 100% S&P 500 low-fee and used insurance (e.g., life and disability) to handle the risk of prematurely needing your money (such as for disability or death) during a bad market correction. Doing S&P 500 is betting the US economy will do fine over the long-term; and if you don’t want to bet on the US economy, you have bigger problems to worry about.

    • Chris Mamula says


      I think there’s room to argue around the edges (role of bonds, small cap, international funds, emerging mkts, REITs, etc), but hard to disagree with your general premise. Simpler is generally better.

      • Gary Simms says

        A wise friend once reminded me there are many very smart people with virtually unlimited financial resources trying to beat the averages, just like you’re trying to do. Might be a fool’s errand, might not.

        20 years ago I realized the wisdom in the adage of “Dance with who brung ya.”

        I used to teach fundamental stock investing and equity and bond mutual fund investing as a volunteer for the National Association Of Investor’s Corporation. now know as Better Investing. It was mostly to learn about what my mutual funds held.

        Adding alpha when the beta of Vanguards total Stock Market Index Fund is cheaply available lead me to the realization I needed to spend that alpha seeking time working in my profession, generating more immediate, investable income.

        Work in a lucrative profession, work hard making a lot of money, live frugally, invest in the 4 classes of assets with mutual funds, and plan for retirement with quality software.

        • Chris Mamula says

          I agree that it is very difficult to beat an index by picking from stocks within the index, and it is not worth the time to bother trying. Evidence shows that you have a fairly good chance of beating the market defined as the S&P 500 (over the long haul as all investing should be judged) w/o increasing risk by investing in a more diversified portfolio that includes international stocks and smaller companies that have minimal impact on a totals stock index fund.

          Is it worth the effort to try? That’s where I think smart people can disagree.

      • Maybe you have better hard data than me but my understanding is in the long run, diversifying via international stocks, smaller companies, etc. don’t increase total return. But a well balanced portfolio of stocks does decrease beta with an overall average of the same return over a very long period of time. Less beta, same return is a good thing so it’s still smart to do.

        • Chris Mamula says


          Nothing is guaranteed, as the past doesn’t guarantee the future. But for me it’s worth the effort to construct a slightly more diversified portfolio. I hold 8 different index funds. Very tax efficient b/c of asset location. All in fees will by a little under .1% once we are able to get money out of my wife’s 401(k).

          I wouldn’t argue with anyone who chose a simpler 2-4 fund portfolio or even an all in one fund, which is what I mean by reasonable disagreements around the edges.

          Have you read this? I find his work interesting.


    • Gary Simms says

      11th Commandment: Resist the urge to get something for nothing.

      I once hear a fable about two people. Sally super lucky and me. Sally, being super lucky, invested her yearly investment on the best market day of the year. I invested on the worst day. 40 years went by.

      Sally has more money than me, but I’m still rich enough to retire in style.

      Got to be in the market and stay in the market.

  6. Ok Chris you have my attention. I have been investing with Fidelity Portfolio Advisors for about 10 years (since I have been self employed) and also have my wife’s portfolio with her workplace Fidelity Advisors. We have made some gains over this period but I have been uncomfortable handing them a percentage on our money even though it is reduced due to the combined totals. I must admit that I want to learn more about investing myself so that we have more control and the ability to retain more of our money. When I seem ready to pull the trigger on DIY I feel like a deer in the headlights! I feel like I am trapped in this cycle which I need to be kicked in the rear to get out of it. Before Fidelity we too had almost been burned by “Their Guy”. We followed our gut and got our money out before we lost it. I think he is in jail now…. So I was wondering if you can help lead me in the right direction to get out of this circle of investing we are in?

    • Chris Mamula says


      If you haven’t figured it out from the tone of this post and the exchanges in the comments, this is a pet topic of mine. I will be writing much more about becoming a DIY investor over the next couple of posts. I also have strong opinions about the financial advice industry. I started out being pretty dogmatic and thinking everyone can/should be a DIY investor. I still think it is pretty simple to manage investments and most people have the intellect to DIY, but many people don’t have the ability to manage themselves which is one place an advisor can add value. Stay tuned and keep the discussion going in the comments. Lots of smart and passionate readers here.


    • Gary Simms says

      I can’t keep my mouth shut either so since you asked……

      General Investing… Buy and read this book. Read the chapter summaries at the end of the chapters first.

      Mutual funds Buy and read this book:

      Scroll down to the Mutual Fund e-book

      For life and retirement planning I used and continue to use Silver by Moneytree software.

      You can get a personal copy for half price by calling them and telling them you’re not an advisor, but an individual investor. Also links to a sample report and a form to gather all of the data you’ll need to input your data into the program so you can get a real analysis using their 30 day free trial.

      Here’s a link to the wiki that’s the best explanation of fundamental stock investing:

      Here’s the best explanation of trying to beat market averages by weighting asset allocation. You job, find the pattern in this data. When you, as I, decided I couldn’t see a pattern, my friend said, exactly! don’t!

      Two other books I love:

      The Invisible Bankers by Andrew Tobias

      Insurance for Dummies.

      I have no financial interest in any of these sites.
      I do have a credit in the Mutual Fund e-book and I did write about half of the BI Wiki many years ago. You may notice the preparer’s initials at the top of some of the forms are mine.. GLS.

  7. One of my colleagues told me last week that she had to leave work early to go with her husband to meet with her financial advisor. For a second I forgot I was at work and I was sooo tempted to say “Why? That stuff is easy!”

    But I kept it zipped, I didn’t want to be that guy 🙂

    • Chris Mamula says

      Yeah, it’s hard to keep your mouth shut once you figure this stuff out and see people paying so much to get horrible advice that keeps them stuck, so eventually I started opening mine. Some listened and took control, unfortunately most didn’t?!?!

      • Gary Simms says

        Problem is if you get it right, there’s no upside. If you get it wrong, you get all the blame.

        Remember, they have to actually do the work, not just 75% of it.

        You can hit triple runs in baseball all day long, but you gotta cross home plate to score a run. Gotta do all the work and close the sale.

  8. Excellent post, Chris!

    In fact, I am making it an addendum to my own on the subject from way back in 2012. 🙂

    • Chris Mamula says

      Thanks for reading and taking the time to comment. As you know, I am a big fan of your entire “Stock Series” and that post in particular. Thanks for adding this to help others to learn from my mistakes.

    • To Roger above and others who are interested in DIY but want/need to know more… try JL Collins book The Simple Path to Wealth. It has changed my investing philosophy and that of my kids and some of my relatives who were willing to put in the small amount of time to read it.
      The stock series that Chris references is nicely compiled into this easy to read and understand book.

  9. Hi Chris,

    One of the tricky aspects of DIY investing is considerations must be given to the age of the person requesting advice.

    Bear with me.

    I used to struggle to see why anyone in their 20’s would need need financial advice as that group has time and the power of compounding on their side. 100% Dollar Cost Averaging into a global equities tracker is all that is needed. Yet this very group is the group that will struggle most with patience as they want to see gang-buster returns NOW.

    Those in their late 40’s, early 50’s who suddenly realize that they are way behind the 8-ball due to horrendous lifestyle creep and / or previous bad financial advice. This group can be saved (pun not intended) yet retirement may not be possible until 60+, SS considerations aside.

    Each of these scenarios at either end of the investing spectrum requires solid advice on behaviors primarily. But with a very different lens on looking at it. That can be provided by a flat fee-only advisor. Yes, they do exist. I think, for example, the Finance Buff even provides such a “service” in this regard.

    Oh and this is “wisdom” from the soon to be early retiree who (a) pulled some money out of the market in 2009,(b) invested in a couple of non-traded REITs and (c) listened to bad advice of 529 choice from a former advisor. Yup, which early retiree has not made mistakes? We could assemble the contents of an encyclopedia on this subject of Bad Financial Advice very quickly between the two of us I will bet…. :>)

    • Chris Mamula says

      Agree. Thanks for sharing your mistakes as well.

      I think that too often in the FIRE community we make it all sound too easy and it turns off others who think they have to be perfect. As you said, we all make mistakes and I think we need to spend more time shining light on them to a.) let people know this is possible and you don’t have to be perfect and b.) help people learn from our mistakes so they can avoid repeating them.

  10. Mike Peterson says

    The last of several advisors we cycled through over the last 15 years was a friend who ran a tax and financial business. Although good at tax advice his financial recommendations finally just cost too much in money and trust (similar to the prior dudes) and essentially ruptured both the friendship and the business ties completely. Money and friends/family don’t mix well, but it is a hard and expensive lesson. For the last 3 years my wife and I have run our own 401k and IRA accounts at low or no fee companies and rest easier knowing the future is in our own capable hands. Your and many other similar blogging references yield valuable resources for just about anyone vaguely interested, and I appreciate your insights.

    • Chris Mamula says

      Thanks for sharing your experiences and insights. Building a financial advisory practice is hard work with little reward for those starting out. They often seek out friends and family b/c of that trust and agree that makes for some bad situations down the road. Best to keep money and relationships separate when possible.

  11. I hired a fee only advisor to develop a full retirement plan 4 years before my wife and I wanted to retire. He works with Garrett Financial Network and doesn’t manage any of our money- he is advice and plan only. The one time $1200 fee we paid him was worth its weight in gold as we approached the date for my wife to retire (and, she was able to retire 3 years before she thought she could because of his advice.) Because I REALLY wanted to retire from teaching early, we’ve paid him a few hundred yearly over the last few years to make sure we are on track. It’s been worth every penny. We’ve made mistakes in the past as well by hiring an annuity selling, front load fee “advisor.” Luckily, my self education on finance led me to move all of those funds to Vanguard years ago, and I’ve never looked back. I am submitting my teacher resignation papers two years early this week. So, hopefully, Chris, you will add fee only advisors who don’t manage your money into your next column. Other than this, I 100% concur with your philosophy.

    • Chris Mamula says


      Glad to hear you had such a positive experience. Congrats on your upcoming early retirement. You may be more excited than the kids counting down the days until school is out! 🙂

      I think fee only advice is the best way to go but even that has conflicts of interest and you can’t just blindly trust them with your money. I’ll be writing more about this next week. Stay tuned. Curious to hear your feedback.


  12. Thanks for another fabulous article! I have been enjoying your writing for some time. Really helpful and well written. Always an interesting and useful read. Thanks a lot for sharing all that you have learned and helping us other folks!!!

  13. I’ve never hired anyone to look after my investments, which are almost entirely my retirement accounts. I’ve been a Vanguard investor for 20+ years and have rolled every dime of 401k distributions from leaving jobs into IRAs. My spouse and I funded Roth IRAs for several years too. Even with slowing contributions the past several years with kids going through college, at age 53 we have enough saved that if we entirely stopped making contributions today and matched the 7.5% 10-year average return my account shows today (that includes the 2008 disaster), we’d hit $2M when I reach age 67. That would serve us extremely well to maintain our lifestyle in retirement.

    Of course, sequence of returns could mess up my plans, but that’s beyond my control. I’m well-diversified in low-cost stock and bond funds and I spend very little time actively managing my portfolio, and almost no time worrying about it. I don’t chase anything flashy or particularly high risk. It’s great to have peace of mind that I’m an investing “tortoise” heading in on a glide path to retirement.

    • Gary Simms says

      Remember, 2 million in 14 years won’t buy what 2 million buys today.

      More like 2.6 then to buy what 2 buys today.

      Check out that Silver software program. At least the premade report to see how inflation affects income.

    • Chris Mamula says


      Agree that investing can be pretty simple and many can DIY. Unfortunately, many simply won’t put in the time and effort. Those that need an advisor need to know that you still need to be involved. There are too many conflicts of interest between advisor and investor to just outsource it.

  14. Early on I read somewhere that “nobody cares about your money as much as you do” and I’ve never been able to engage an advisor after that. It’s been a great educational road, not without its bumps, but one I would counsel everyone to take.

    Great post Chris.

    • Gary Simms says

      Everybody cares about your money as much as you do, they didn’t have to earn and save it! They would be happy to take if from you any way they can.

      Nobody cares more about protecting and growing your money than you do.

      • Chris Mamula says

        Thanks Oldster. If you will only learn one DIY skill in your life, I can’t imagine anything that will be more valuable than knowing how to manage your own money.

  15. Hi Chris,
    Isn’t there an old adage about being too late smart?! I fell for the same financial advisor plot. I call it a plot because I truly believe he went into the agreement knowing full and well the commissions he would make by mishandling my hard earned money. Fortunately, in spite of his evil deeds I figured it out, cut all ties to him and minimized my losses. Unfortunately, there were still approximately $20,000 in fee/commission damages. It could be very much worse; I am now in a low fee fund and have recouped those monies. Of course, my fund would be higher without that snafu but some mistakes you cannot recover from. I am fortunate that I was able to. ~smile~ Roseanne

    • Chris Mamula says


      Glad to hear you turned things around as well. Unfortunately, stories like yours and mine are way too common and it’s easy to beat yourself up over it. Glad to see you learned from your mistakes and put them in the past. Smile indeed!


  16. “The main difficulty with choosing an investment advisor is that by the time you know enough to choose a good one, you probably know enough to do your financial planning and asset management on your own.”

    I couldn’t agree with the above quote more strongly. After all, the person most invested in your financial success is none other than yourself.

    I can’t fathom paying someone else to manage my investments. But then again, I have a strong independent streak and recognize that not everyone shares my personality type (ISTJ).

    • Chris Mamula says

      Knowing what I know now, I also will be a DIY investor for life going forward. Unfortunately, you don’t know what you don’t know until you do.

  17. My wife and I hired a financial advisor in 2015, we were concerned about our financial situation due to layoffs that had been happening at my job for the past couple years. We just wanted to have some peace of mind and opinion as to where we stood financially. We interviewed probably 4 or 5 financial advisors. Settled on one, that charged 1% of AUM, annually. This advisor was a CFP, private business owner, and acted as a Fiduciary. However, after about a year and half, I was tracking his fees, and how much our portfolio was earning, and decided it was time to move on. After the year and half, we barely squeaked out 1% gain on our portfolio. I eventually got laid off about 8 months after signing up with this advisor. However, after the layoff, I started reading lots of retirement and financial books, following the Bogleheads forum, and Early Retirement forums and blogs, and soon realized that I could do it myself. Today, the only way I would hire an advisor would be on a hourly basis and for a very specific purpose. In hindsight, the layoff gave me the time to do the research and learn how to invest.

    • Chris Mamula says


      I took a similar path and came to the same conclusions. It’s not that hard if you’re willing to take the time to educate yourself, and there is probably no skill that is more valuable than knowing how to manage your money.


  18. FIRE walk with me says

    What do you think about hiring a financial advisor for one-time estate planning tasks, such as whether and how to establish a family trust?

    • Chris Mamula says

      I don’t think it is a bad idea to pay for advice whenever you need help, be it from a fee only advisor, attorney, CPA, etc. This is a great example. The problems most people have is they will be penny wise and pound foolish in a case like yours, but use an advisor to manage their investments and pay way too much money (often in hidden fees they don’t know they’re paying) for conflicted advice that is as likely or more likely to do harm than good.

  19. Once you do the research and decide what funds to invest in, where can you go to invest for free or low fee?

    • Chris Mamula says

      I can’t give specific financial advice, but I personally use Vanguard for the majority of my investments and TD Ameritrade for my HSA. Schwab and Fidelity also can be great options.

  20. Great article and mirrors and lot of my own financial mistakes (I’m just now wrapping up a blog series called “I made every financial mistake in the book.” I’m a physician and it seems we get preyed upon by “advisors” who know that we don’t have much financial literacy and lots of money (a very deadly combination). Unfortunately helpful information like this wasn’t widely available (or if not we weren’t looking for it in the hectic life of going through med school and residency). I fell for the front loaded mutual funds, an investment recommended by an attending when I was a resident (lost it all), etc. Anyway thanks for the well written article/
    P.S. I totaled all the mistakes I made (will be revealed next week) but it was a staggering number that could have allowed me to retire right now if I didn’t make them..

    • Chris Mamula says

      I wish we couldn’t relate to each other’ stories, but unfortunately this is a very common narrative. Keep spreading the word and helping others. I’ll do the same.


  21. Chris:
    Interesting discussion. And I think for the vast majority of people, your section head title “Our Society is Financially Illiterate” sums up the dilemma facing the vast majority of people. In my own circle of friends and family, I have learned that many do not have the knowledge to prepare basic personal budgets, project retirement expenses, or determine how much in assets and income they will need to fund their retirements. If you bring up the concepts of “Sequence of returns” or “inflation adjustments”, “investing to generate income vs drawdown of investment portfolio”, many do not grasp these subjects. And I am not pointing this out to be critical. Rather, I think this is why many folks turn to so called “Financial Advisors” who often are not well trained themselves and have their own commission and product centric interests in mind. Web sites like this one can go a long way to helping people learn many of these concepts. However, many folks have neither the inclination or time to seek out this information. I am somewhat pessimistic about how the average Joe or Jane will navigate through 20 or 30 years or more of retirement, particularly if we go through another bear market cycle in the markets.

    • Chris Mamula says


      Your comment is spot on. I’ve been writing as I’ve been learning about this stuff over the last 5 years and have found many amazing people working hard to educate consumers and change the system, but we’re fighting an uphill battle. Thanks for taking the time to read and share your insights.


  22. “There is no substitute to self education.” Your advice is spot on, Chris. In our family, the corollary is “Knowledge is power,” and we’ve tried to instill that in both of our kids. When the bank I worked for folded in the 80’s, I received lump sums for both my pension and 401K. A friend was a registered representative at the time and I asked him to stash the funds someplace safe until I could better educate myself on investing. (I still have some of the early bond funds he chose.) As soon as I felt capable, I began making my own investments. Most of the money ended up in index funds, with just a few exceptions, and our expenses have remained extremely low all these years. I’ve managed both my investments and my husband’s and we retired, completely financially independent, when in our late 50’s. I worked hard to educate myself regarding all types of investments and we developed various income streams (including rental property) over the years. I firmly believe that most people can learn to invest successfully but I do wish that our educational system focused not just on academics but on life lessons, too. Personally, I believe a Personal Finance course should be a requirement for High School and College graduation. Excellent post!

    • Chris Mamula says


      Thanks for the thoughtful comments. It is sad how undereducated we are. Unfortunately, even when these things are taught they’re often taught in less than ideal ways. How many kids learn the “stock picking game” in high school? I think there is some good to it, but think it probably does more harm than good.


      • Exactly! Swap the stock picking game for a solid foundation in personal finance – how to build a good credit score, how to use credit properly, planning and saving for retirement, when and why life insurance is important, what investing means, etc. I believe that we owe it to our children to give them a solid education in basics so that they’ll be able to manage their finances successfully as young adults – and beyond.

  23. Chris- Totally agree with your perspectives and look forward to the next set of posts. Spoke briefly to an in branch “advisor” at my bank about 25 years ago and realized very quickly that I knew much more than did he. I do think that consulting an estate attorney for estate planning/trusts, etc. is probably money well spent, and realize that for some people, having an advisor to keep them from acting impulsively may provide benefits as well.

    One topic I’d be interested in relates to the robo-advisor accounts that are all the rage now. One benefit I’m seeing is ability to dollar cost average into a diversified portfolio of low cost ETFs with no commission or other handling fees. Account is rebalanced as incremental deposits are made and thus far has been accomplished entirely by adding shares (no short term sales). Looking forward to your posts

    • Chris Mamula says


      Both Darrow and I have written about Robo-advisors. Darrow here: and I wrote about them on my old blog:

      Hope those give you some helpful insights.


      • Thanks for the quick response Chris! The one that I use today is at Schwab (-0- fee) and does use low cost ETF. I already max out my 401(k), defer comp and invest separately in taxable accounts and manage old IRAs on a DIY basis. I like the structure and performance, thus far, of the relatively small robo account and use its performance to benchmark my other investments. I also think of it as additional education for the moment. But I understand the potential cost difference and will continue to focus on the expense ratios and asset allocation with an aim of simplifying over the longer term.

  24. BD Studer says

    I think the best payment plan for financial advisors is to be paid what the client believes the advice was worth. Earl Nightingale told a story about someone seeking better productivity. The someone said to pay him what it was worth, later. The advice was no more than listing five tasks needing to be done and prioritizing that list. The client sent the someone a check for $20K.

    Investing is as simple as you make it. I advise people to first build cash while studying ‘investing’. Second invest in something you ‘buy’ already. Buying preferred stock in your bank is relatively inexpensive, you get your checking fees paid back via dividends.

    Drink coke? Buying stock is a KO!

    I have done these things, ran CAT equipment, like the look, bought the company…

    As for my fee, help someone you don’t know!

  25. Joyce flint says

    Glad I found this site with a lot of useful info and a supportive, nonjudgmental community.
    My tale is sad, true, and I see somewhat redundant: I am a 64 yr old widow who, after caring for my husband of 43 years through his losing 4 yr battle with ALS, found myself in July 2014 with 1.5m insurance money and a 625k decedent 401k. I hadn’t worked (outside the home) for decades, couldn’t work for physical health reasons, was still supporting 2 children, had no background in finance, investing or economics (in fact, no college degree), and was frankly an emotional wreck. Not following sage advise like, make no important decisions for at least a year after a wrenching death, and due to administrators time pressure to takeover/convert 401 to a new IRA, and my need for income beyond the paltry social security widows benefit, I gave it all in total faith and trust to a family friend (a “financial advisor” with Stifel”) to manage for me. At that time, I literally thought the only investments were stocks and bonds and I couldn’t have explained the differences. I didn’t know know there were different types/options for financial help. I ASSumed advisors were professionals like Drs, lawyers, accountants who of course would by virtue of ethics and law (and dare I further inject the ridiculous concept of professional integrity and good character, just to highlight the breadth of my naïveté) work for my benefit and seek fair compensation. I didn’t “wake up” till February 2017, started asking difficult questions without getting answers (like how much did you earn from the two annuities totaling almost a third of my wealth) and was hence fired by Stifel, after a loss of approx. 250k (200 realized, 50 unrealized and transferred). Since then I’ve spent 12-14 hours a day/7 days a week climbing a huge learning curve (not exactly the way I planned on spending my golden years) and am managing my remaining funds fairly well, having caught the tail of the bull. I have worked very hard to this point (equities, etfs, indexes) just to be up 50k to essentially erase Stifel’s 50 down (still unrealized losses in REITS, BDCs, MLPs bought right before oil crashed). While I now understand and take some responsibility for my foolishness, I am still angry about being betrayed and defrauded when I was so vulnerable and feel he should be held accountable–seriously, in what world are leveraged commodity plays a suitable investment for a widow in her sixties who cannot work. Nonetheless, I must add, I am very grateful for what I still have, which is more than many other American retirees.
    My questions to you are, has anyone had any good/bad personal or anecdotal experience with FINRA arbitration: has it resulted in sanction and/or award in cases of a totally unsophisticated investor believing advisor had a fiduciary responsibility. Has that effort helped or hurt your chances of a subsequent lawyer suit with FINRA panel. Has anyone tried representing themselves in the suit/arbitration proceeding: one Midwest specialty law group I contacted basically said I hadn’t lost enough money for them to handle the case. Plus I read a professional paper presenting a statistical study that said chances of winning are low when representing yourself for amounts over 50k. Left me with the distinct impression I’d be unwise to go that route. Has anyone info about smaller firms who successfully represent smaller claiments. Any websites for grievances, remedies, experiences that may help me. By nature I am not a litigious person but I’m pissed, would like to stop or slow down this unethical person, and possibly recoup some money. In the time he had my funds the benchmark S&P advanced by 26% thanks to fed’s easy money policy. I read recently that this second best ever bull market has produced such phenomenal returns that a monkey could have thrown darts at a dartboard and done very well–and I think he wouldn’t even have to be an honest monkey.
    Thanks for reading and any comments are appreciated. Best of luck to all DIYers!

    • Chris Mamula says


      Your story is heartbreaking. It is unfortunately also all too common. For readers that like to criticize those like me for “not really being retired” because I choose to work on this website, stories like yours are why I choose to work hard to try to grow this platform as large as possible to educate and help as many people as possible to not repeat our experiences. Unfortunately, our stories are the rule and not the exception for many who work with “financial advisors”. I admire the efforts you’re taking to educate yourself. It shows it is possible to learn when motivated and it’s never too late.

      Regarding filing complaints or lawsuits, I don’t see any harm filing a complaint if you feel you were treated unethically. Unfortunately, not many people who are vulnerable will ever look to see if an advisor has complaints filed against them. I know I didn’t. Did you?

      I am also not a litigious person. I did contemplate pursuing legal action initially when driven by anger, but thought my prospects were dim and didn’t see it accomplishing much. I chose writing as a positive outlet instead. Maybe you could start sharing your story to help others as well. I understand that we can’t all write blogs, but possible speaking at a senior center or church, writing letters to your paper, etc could be outlets to educate and inform others who are vulnerable.

      Best of luck, whatever you decide to do.