Q&A: 1.5% Advisor Fees, Becoming a Pilot ($340K in 4 Years) & Healthcare Costs
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What is the format of the Rich Habits Q&A episode and how can listeners submit questions?
Hey everyone and welcome back to the Rich Habits Podcast question and answer edition brought to you by public.com. These are our Thursday episodes where every Thursday we answer your questions as if we were going through whatever you might be going through. You can DM us your questions on Instagram at richhabitspodcast. You can email us your questions at richhabitspodcast at gmail.com or you If you're inside the Rich Habits Network, our community for our biggest fans, you're getting your questions answered anyway. You're in the DMs. You're in the community. You're in the Zoom calls. You're in the office hours. You are getting your questions answered because that's the point of the Rich Habits Network.
But for everyone else here who's hanging out with us with these Q&A episodes, welcome, and I can't wait to dig right in.
Definitely. This is going to be a fun episode. Some really, really good questions we got from multiple platforms. So I'm ready to
dig in. Let's go. Our first question comes from Kenneth on Instagram. Kenneth says, Hey, Austin and Robert, I'd love your take on my situation for a Q&A episode. I'm 40 years old. I'm a dentist slash practice owner. I've been practicing for 15 years and I paid off my student loans within six years. My practice collects about 1.5 million a year and I have 60% overhead. I have $510,000 in investments with Northwestern Mutual, $156,000 in a personal brokerage account at public.com, $100,000 in a business brokerage account at public.com, $69,000 in Fundrise, and $300,000 in Liquid. I own a townhome that I'm renting out. It makes $3,500 a month in rent and my mortgage is $1,600. and I recently bought a $950,000 primary home.
My advisor charges a 1.5% AUM fee. At what point should I ditch the advisor, simply go all in on these low cost index funds and pay a fee only CFP slash CPA when needed? And would you keep Fundrise in this situation or simplify that too? Love the show. Thanks in advance. Robert, what's your take here?
Yeah, my first take before we got to the bottom of what the question is, is I would be very careful with Northwest Mutual. They are very well known for having people in a lot of mutual funds, target date funds, and expensive funds in general. So when should you ditch the AUM fee and the advisor? 1.5% is pretty typical for that size portfolio. But as you inch up towards a million, million five, you should be able to see those fees get down under 1%. Normally it's once you cross a million five, you're going to be under 1%. So when should you ditch? I think you're doing a fantastic job at 40 years old, but you are paying a lot of fees. Now here's the rub here from my opinion. And I know Austin's going to have some really good takes at 40.
You're building your wealth. At some point, you're going to need some fiduciary wealth advisory help. You want to have somebody to help you figure it all out with taxes and retirement and what you're going to do for your family and all these other things. So you have to consider that. But could you shy away and manage it all on your own from 40 to 50? Maybe. But I would just look at maybe shopping around and finding someone else. That says, hey, this is a smaller account right now, but it's going to be a big account because you're a high earner and find a way to get those AUM fees down to 0.85 up to 1%. And then I think you're fine to have someone's shoulders to lean on because like with Crow Capital, we have a team of 18 people.
And even though we charge similar fees, they charge similar fees. You get so much help that I think it's worth it for higher net worth people. So that would be my take. Everything else I love about what you're doing. But my take would be either shop around, keep going, or go back to them and say, hey, I'm not happy with these fees. I'm going to move all my money to public.com and I'm going to self-manage. What can you do? Cause they have different tiers of fees and see if they'll bump you down a couple of tiers because your account is growing so much over the coming years.
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Chapters
3 chapters
1
What is the format of the Rich Habits Q&A episode and how can listeners submit questions?
0:00β7:14
2
When should a highβearning professional ditch a 1.5% AUM advisor fee and switch to lowβcost index funds?
7:14β7:50
3
Should I keep my Fundrise realβestate investment or simplify my portfolio?
7:50β42:47
Speakers
2 identifiedMore from Rich Habits Podcast
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