Downshift Financial | MHFi 024

Doug and Carl interview Eddie and Travis from Downshift Financial. Downshift is a fee-only financial planning firm. Here are some highlights of our discussion: Would you accept a free steak if you had to listen to horrible financial advice? The 10 questions you need to ask any financial planner The only guaranteed investment: annuities (and why they’re a bad choice for most) The 4% Rule and early retirees Why many planners don’t have your best interest in mind The challenges of financial planning for early retirees The drivers of economic growth VTSAX: Is it all it’s cracked up to be? Carl’s hatred of dividend investing Eddie and Travis’s FIREy lives Downshift Financial’s client engagement methodology Links: Bogleheads Investing Advice and Info Vanguard on International Investing Financial Advisors for Early Retirement – Downshift Financial Meet Eddie and Travis  Eddie Liang and Travis Hughes are friends and business partners who, though technically FI, are pursuing their passion to help others through their financial planning firm, Downshift Financial. Eddie and Travis know just how predatory many financial advisors can be. In fact, they got into this line of work because they wanted to help people who need financial advice get what they need while avoiding those kinds of predatory practices. Eddie and Travis’s fee model is completely transparent and above-board. They charge a flat fee for their services. Period! You won’t find them pitching you any individual stocks or annuities or other opaque, suspicious products that benefit the financial advisor far more than the client. They believe in index funds and simply try to help their clients find the best asset allocation that works for them. They’ll also help with other critical things like optimizing a client’s tax strategy, reviewing an estate plan, and making sure other financial items (like college savings, estimated tax payments, tax loss and gain harvesting, and many others) don’t fall through the cracks. Our Discussion  Right out of the gate, Eddie and Travis told us about some of the bad experiences they’ve had with financial advisors in the past. That includes the ever-popular “free” steak dinner that comes with an aggressive sales pitch. Eddie and Travis try to avoid exactly this kind of approach. They also talked to us about the critical difference between fee-based and fee-only advisors, and why fee-based advisors can be sketchy. Also – fun fact, financial advisors are free to be a little cagey about their commissions. They then walked us through what questions everyone should ask a financial advisor before signing on with them. Those include: (1) Are you fee-only? (2) Are you a fiduciary at all times or a broker, as well? (3) Does your firm engage in sales contests or awards programs? We then delved into some more FIRE-y topics. Eddie and Travis talked to us about how they aim to serve the FI community and discussed their take on the 4% rule. We also discussed how they feel about going 100% into VTSAX. Turns out, they take a more global approach and value diversification into international stocks. But you won’t find...