What would you with $20K?

I'm not a cfp but i did stay at a holiday inn [img]/images/graemlins/smile.gif[/img]

Check out I-bonds, you can buy them online (treasurydirect.gov) and they are safe and return a decent interest rate, currently I think around 6.73 or so. Although that is adjusted every 6 months.

[Ed Miller]

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Good move.

Some CFP (maybe your office) is going to make a pretty penny advising the best of the 2+2 young guns. The ideal CFP will be a poker player and capable of assuming a mentoring role with a style customized for these great young players.

It's actually shocking to me that CFPs are not all over this.

If I was 21 and interested in managing portfolios, I'd just go and take the classes and get the CFP and then market my services to the many great young players here.

Several of them are going to retire millionaires by 35 provided they get the proper advisors on their team early in the poker career. Certainly this is a win-win for all involved.

I know of no CFP that caters to poker players. WHAT A NICHE.

Most CFPs struggle explaining advanced financial concepts to clients. Winning players by default get anything related to risk and reward-- immediately.

Marketing CFP services to winning young poker players. What a killer business model for the right CFP firm. Some of these kids will have liquid net worth well over 500K by the time they are 27, 28, 29. And they are going to live for another 30, 35, 40, 50 years.

What an opportunity. It's HUGE-- and wide open.

http://www.cfp-board.org/

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In the last few months, I've considered doing exactly this. Actually, my plan was to team up with a CFP rather than to become one.

I don't know, though... I don't think it's as instantly lucrative a niche as you are suggesting. That's precisely because of how smart successful poker players are.

The financial industry supports itself on the ignorance of its customers. While a lot of these 18-25 year olds are ignorant now, many won't be two years from now. They'll be smart... and when they have millions, they will know what to do with it... and that won't be paying me $20k a year to put it in index funds for them.

Sports millionaires... that's a great niche. But poker players? The money isn't as good in poker, and they are too savvy to sign on for the long haul. They need short term direction, not long term management.

Actually, the niche that could be somewhat lucrative is the windfall niche. The lottery winner niche. The inheritance niche. The big tournament winner niche. The "average Joes" that happen to win big tournaments and don't know what to do with the cash. But there are plenty of people who already cater to that niche. Which is not to say that a player known in poker circles who also caters to that niche wouldn't have a "niche within a niche." But it would be connection-based, not expertise-based.

I dunno.. I thought it was a great idea too when I first thought of it. But then I said, "How many of these guys are sticking around for the long haul?" and I decided that most, ultimately, will outgrow the CFP service.

[Dan Mezick]

Anyone really smart values expert advisors. It's really that simple.

With expert advisors you amplify your own talents by leveraging subject matter experts in other related domains.

[ QUOTE ]

AUTHOR:
John Davison Rockefeller (1839–1937)

QUOTATION:
I have no use for men who fail. The cause of their failure is no business of mine, but I want successful men as my associates.



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[eastbay]

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Anyone really smart values expert advisors. It's really that simple.


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Wasn't that the justification for why mutual funds were supposed to be the place to put your money over the past two decades? That's where the experts were and they were always going to be able to do better than know-nothing you. It appears that advice turned out to be wrong, or at least not any better than set-it-and-forget-it index investments.

eastbay

[Uglyowl]

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Wasn't that the justification for why mutual funds were supposed to be the place to put your money over the past two decades

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There are two things I can think of that have changed drastically over the last twenty years:

1. The information gap has shrunk significantly.

2. The brokerage costs are significantly less which allow individual investors to put together a portfolio rather cheaply.

With some mutual fund fees on the high side and the information gap not as large, it is very difficult for a fund manager to continously come out on top.

There are great uses for funds though.

[Dan Mezick]

East,

Mutual funds managers dont dispense personal financial advice, they just do a job managing a portfolio in accordance with the mutual fund's stated profile and objectives.

CFPs provide a more personal service that includes a considerable amount of advice about handling net worth through all stages of life. This advice includes aspects of estate planning, handling windfalls and inheritance, financial effects of life milestones (death of parents or spouse, marriage, divorce etc).

CFPs are not typically qualified to be mutual fund managers and vice-versa.

In using the term "expert advisors" I intended to connote "personal team of expert advisors" including members with expertise in accounting, legal, and financial planning.

No one here is throwing dimes on the idea of indexing.

[eastbay]

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East,

Mutual funds managers dont dispense personal financial advice, they just do a job managing a portfolio in accordance with the mutual fund's stated profile and objectives.

CFPs provide a more personal service that includes a considerable amount of advice about handling net worth through all stages of life. This advice includes aspects of estate planning, handling windfalls and inheritance, financial effects of life milestones (death of parents or spouse, marriage, divorce etc).


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You made a general statement: "Smart people rely on expert advice." I applied your generality to show that it isn't "as simple as that" in general. I don't need any "experts" to tell me that I should save my money, diversify, and invest to match my desired balance of risk and return, just as I don't need any "experts" to manage my investment portfolio in a mutual fund, when their value added is demonstrably nil.

I think the point here is that financial advice for the vast majority of people isn't rocket science. I have had many people tell me what their "financial advisors" have done for them and I tell them they could have come out ahead by buying a $30 personal finance book and reading it in a couple of evenings.

Smart people don't pay premiums for "expert advice" on subjects which aren't all that complicated.

eastbay

very true eastbay, financial advisors are for the dumb and lazy

[eastbay]

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very true eastbay, financial advisors are for the dumb and lazy

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On the flip side, people like Suze Ormon seem to have made an entire (probably lucrative) career out of telling people to pay their highest interest loans first and to take advantage of their employer's 401k. So not to detract from Dan's idea too much... advisors may be for the stupid but that's a big market.

eastbay