I am not a financial advisor

Before we move into talking about your specific investments, I want to remind you that I am not a financial planner. I am a nurse who has 2 Masters degrees and who has accumulated over a million dollars in net worth by age 41 at the same time as creating the life I want. I have been very intentional about money since I was a child, but didn’t start investing in any real way until I was 25-27 years old. I carried $200,000+ in debt which included student loans, some credit card debt, and a mortgage. 

I am not the recipient of any trust or major inheritance. I received a $3000 mutual fund from my grandma in my late teens which I did save and put toward my $10,000 down payment on my first house that I stretch-purchased at age 25. And when I say house I mean a 600 square foot apartment in Seattle that I lived in for 13 years. When my husband’s dad died 15 years later we received $2000 and when his grandpa died a couple years after that an additional $2000. That $7000 is not nothing, but you can see it’s not anywhere near a million dollars either. Not even close. 

Tim, my husband who is also a nurse, and I have worked to amass all the rest of our accumulated wealth. We’ve focused on spending less than we earn. Some years we’ve prioritized padding our accounts more than others. In 2015 we took a 5 year break to hike, travel, learn Spanish, and start a non-nursing related business. For much of that time, we didn’t earn a dime and our income was in the lowest tax bracket, almost at poverty level. During these years we were paid exponentially in happiness but our material wealth accumulation was pretty much non-existent. 

I have always been interested in money. When I was a child, I would watch my grandma do her budget with pencil and paper over and over again until she got it right to the cent. I thought that was so cool, and I couldn’t wait to grow up and have enough money so that I would be able to do my own budget. When I was 15, I had a trigonometry class that taught me the value of compound interest, but that didn’t help me miraculously find the cash to pay to go to nursing school. When I went to nursing school, I had no idea what the loan forms meant that I was signing other than I needed to sign them to be allowed to enter a classroom. I definitely did not comprehend the enormity of my decision which was that I was entering a contract that would strongly influence how I lived my life for more than 15 years. 

I do not have any formal education in banking or money management. I have taken a personal interest in it for the past 20 years having developed my own tools to manage my own accounts. I have always loved reading books about money (even though I get a little bored with the repeating concepts and viewpoints from one sub-section of the population). My personal interest and desire to learn is what has allowed me to successfully manage my nursing career and finances in a way that made my life work for me. I have not always done it on my own either. I worked with a financial advisor for years, especially during the years when I was working 50+ hours a week as a nurse practitioner. But when I cut ties in 2015, reclaimed my time and invested it in the things I was most interested in – one being my own personal money management –I started seriously questioning what my personal financial advisor was doing for me that I could not do for myself.

I do not believe in financial advisors. My feelings will not be hurt in the slightest if you decide a financial planner is right for you at this time in your life. I am aware that about 27% of nurses are actively working with financial advisors. I held myself back for years by working with a financial advisor telling myself the convincing story that I didn’t have the time I needed to do my own investing nor did I have the skills I needed to do my own investing better than an expert. Those were big fat lies that I told myself for almost 13 years. Way too long! 

Still, having a financial advisor while I was telling myself this story, was right for 25 year old Angel who was just getting started investing. It was better than the alternative which would have been saving into a savings account. I wish 25 year old Angel would have had 41 year old Angel’s advice which is that investing to grow individual wealth 1) takes very little time, 2) is safe, 3) will provide much greater returns than working with a financial advisor. 

41 year old Angel now knows that 25 year old Angel could’ve made an even better decision that would have grown her net worth by an additional few hundred thousand dollars during the life of working with a financial advisor by saving through fees alone, and that amount invested over my lifetime could have turned into a half a million dollars. We’re not talking small change here, and I wish 25 year old Angel knew that!

Cost savings by avoiding financial advisors mainly comes down to saving through lower fee investment choices. There are all kinds of ways that financial advisors will tell you about the fees they charge (or don’t) but you’d better believe that they’re getting paid for their time whether you pay them for it directly or not. If there’s any question in your mind still about who’s paying for it, I’ll be blunt. You. You will either know you’re paying for it, or you won’t, or you’ll know and not know at the same time. But you are paying. Do not ever believe it if an advisor tells you there’s no charge for their service. They have all kinds of ways to spin this, and I’m here to tell you, just do not fall for it.

My financial advisor told me multiple times throughout our relationship that there weren’t any fees for his service. I naively wanted to believe him. Here is an actual e-mail conversation we had.

Hi White-Man-in-Expensive-Looking-Suit,

It looks like there are some fees on my accounts. Can you explain? 

Angel 

____

Hi Angel,

Great to hear from you! What adventures have you been on lately? I’m not aware of any fees that would’ve been charged, and I don’t personally charge you any fees. Let’s talk on the phone if more questions. 

• White-Man-in-Expensive-Looking-Suit

My thoughts after reading this response: ‘Ok, hmph. I’m not the expert, and I totally believe White-Man-in-Expensive-Looking-Suit who’s helped me with my investments for nearly 10 years now. I clearly got something wrong because I don’t understand how to use the online portal or how to read my statements (🚩red flag!). He’s always reassured me there’s no charge, and I believe him because he’s believable. I believe he has my best interest at heart because he’s a professional working with a big, well known company.

If you are thinking, ‘Wow! Your response and line of thinking was pretty lame,’ let me give you 100% permission to do that because I am thinking the same thing. I am actually disappointed in myself when I look back on this. I am a woman with 2 master’s degrees and who generally likes math and budgeting and finances! I had already perfected my Spending I&O Sheet and had been using it for years at this point! 

I am not a meek person who anyone would describe as a pushover. My husband describes me as a person who never gets embarrassed (not true, I do) and who is never afraid to ask for help with understanding problems. I generally pursue the things that are important to me without fear of looking silly or seeming dumb. But remember that the story I had created in my life about investing is that I didn’t have the time or the skill to get the most out of my savings so working with a professional who did would be in my best interest. 

It would be another year or two before I would make the time to further investigate this gut feeling I had about the fees. Finally, getting around to this item on my ‘to do list’ (thanks COVID!) I pulled out my various funds and started looking at the listed fees (these included things like expense ratios, management fees, and sale fees). The thing I want everyone to know is that fund fees are sneaky because you commonly won’t see any charge on your account. So this technically makes everything true that White-Man-in-Expensive-Looking-Suit said. Most of the fees are skimmed from the top before any money lands in your account. All investments come with associated fees, but I quickly learned that the funds that White-Man-in-Expensive-Looking-Suit got me invested in, had pretty high fees. 

I thought, ‘This seems really strange, especially given my last email with White-Man-in-Expensive-Looking-Suit who provided reassurance about the lack of fees.’ So I emailed him again. 

Hi White-Man-in-Expensive-Looking-Suit,

I have just combed through my accounts and I notice that I’m getting charged about $30,000 per year in fees. Wow, that’s a lot and I didn’t really realize that was happening. It’s especially surprising given a previous email exchange between us where you reassured me that no fees were being charged. Is this right that across 10 years, that’s coming to $300,000 in fees? If so, I need to make some changes ASAP. What do you recommend?

• Angel 

____

Hi Angel-

I want to make sure you’re ok with your investments and that you understand what you’re invested in. Fees can really add up over time. Let’s talk on the phone to go over this. 

White-Man-in-Expensive-Looking-Suit

You better believe we were on the phone together in just a short minute after that. This time around these calculations were being validated.

But there was another factor at play that supersedes my money and fees. Over those 13 years I had developed a friendly relationship with my financial advisor. I enjoyed his humor, and catching up on life events. He was a crazy runner like me! Even though we had a purely business relationship, I felt invested in it. Even at this moment when it was getting confirmed to me that, ‘Yes, probably I had paid several hundred thousand dollars in fees during our work together,’ it was not in my mind that I wanted to break up with White-Man-in-Expensive-Looking-Suit. I only wanted for White-Man-in-Expensive-Looking-Suit to bring me an alternative plan that had lower fees. 

Phone conversation with White-Man-in-Expensive-Looking-Suit:

Me: I did some calculating and this really took me by surprise. Is this right? 

White-Man-in-Expensive-Looking-Suit: I haven’t done the calculations myself, but yeah, that’s pretty normal. There are fees built into the funds. I’m looking at your account and I see that your accounts are up by 18% and that’s pretty good and maybe justifies the fees. 

Side note: If you’re thinking 18% return, wow! That's awesome. It’s worth it! Think again. The average return at the time for similarly invested folks was in the mid-20s. Also, this was taking into account my new cash deposits which is a way I learned advisors make themselves look better on paper. Don’t be fooled!

Me: Ok. I’m thinking I might be able to lower the amount of fees I’m being charged by taking over management of my own accounts.

White-Man-in-Expensive-Looking-Suit: Yeah, you probably can if fees are important to you. 

Surprised me: Ok. I am going to do some research and make some decisions. I’ll be in touch. Whatever I decide, I want you to know that I’m very grateful for your help and the relationship we’ve had in the more than 10 years we’ve worked together. (Voice quivering/nearly tearful.)

Here’s an honest thought I had across the 13 years, not just this moment on the phone, ‘I might be able to do this better, but at this point, I don’t feel good about breaking off this relationship we built.’ Even at this moment, I did not want to break it off. And you know what else? This is not the first conversation I had with White-Man-in-Expensive-Looking-Suit where he advised me that I could probably invest to build my wealth better if I was managing my money on my own. I would love nothing more to say that I got cheated or deceived, but I didn’t. I just didn’t willingly put the work in and center my own best financial interests. 

Soon after this phone conversation, I did decide to transfer my accounts to another brokerage firm that is well known for their intuitive, simple to use and easy to understand online platform. I felt immediately more confident in understanding my investments and like a load had been lifted off my back. 

Making the move was pretty simple, but I did have to send an uncomfortable break up note to my advisor. I didn’t mind transferring my money. I didn’t mind taking responsibility for my own accounts. I absolutely dreaded breaking off this long term relationship. 

Hi White-Man-in-Expensive-Looking-Suit, 

I am following up on our phone conversation. I have made the hard choice of moving my accounts to a different firm so I can pursue lower fee options. Please watch for transfer requests soon. You have been a very important part of my financial journey, and I am very grateful to you for all the advice and guidance you’ve provided to me throughout the years. 

With gratitude,

Angel

Even though I wish that 25-year-old-Angel wouldn’t have set up 41-year-old-Angel like she did: with a financial advisor and the missed opportunity of a few hundred thou, I can also honestly say that having a financial advisor was not in my worst interest. My advisor helped me in my 20s when I was still managing a load of debt. He provided the empathy I needed after meeting with a different advisor who literally laughed in my face after I told her I wanted to buy a house in Seattle.

White-Man-In-Expensive-Looking-Suit gave me good advice and helped me establish my Roth IRAs and helped me know how to take the simple investment strategy for my 403b which again, wasn’t the most lucrative and isn’t how I would do it knowing what I know now, but his advice did help me invest that retirement account in a safe way that did show regular returns. My financial advisor is the one who emphasized the importance of always, always maxing out my employer match (free money!) and prioritizing my Roth after that. I’m grateful for this, certainly, but could I have learned these simple steps from a quick conversation with a colleague? Well, did you learn it by reading this story? 

You’d better say yes!

I hope this helps you see why I think having a financial advisor is not necessary. I think the priority for you is to understand what you’re invested in so you can pursue your most lucrative wealth growing journey. My number one reason for running Ultimate Nurse Investing is because I now know that NO ONE WILL CARE FOR YOUR MONEY BETTER THAN YOU WILL! 

As nurses we work so hard for every dollar we earn. We are hit, spat on, bullied, sexually abused, starved, deprived of pee breaks, deprived of mental health breaks after de-escalating violent situations, giving life-saving CPR, or helping someone over the rainbow bridge, and supporting families through their grief. 

I want every nurse to take those hard earned dollars, and use them as wisely as possible to grow as much wealth as possible. I want you to achieve financial independence so that you can do this valuable nursing work because you decide you want to, not because you feel you have no other choice. 

I am not a financial advisor. You probably aren’t either. But I’m here to take you through these steps to show you that neither of us need that.

👂Listen to experiences of nurse colleagues who I've helped.