Maxifi Financial Planner very helpful

[John Ranalletta]

Like most here, I keep pretty close tabs on our financial health, but the spreadsheets don't easily answer the question,, "How much can I spend each month and not run out of money?"  

 

I used the ESPlanner for years and got away from it (I think @Skywagon once wrote that he used it, too).  Earlier this week, I bought/downloaded Maxifi and started plugging in data, e.g. savings, IRAs, projected income, housing, provision for long term care, bequests, etc. and spun the wheel.  Obviously, the quality of the output is wholly dependent on the quality of the input (guesses about the future); so Maxifi lets one create more than one "plan".  Very helpful and user-friendly.

[KTM Doug]

I had a smart guy at work make me a couple line spreadsheet 20 years ago. It is all I have ever used.  You input amt of funds you have.  I do not include the house as that is my wife's bundle to take care of her when I'm not around.  Input your monthly income from SS, retirement, etc.  Input % return on savings/investments, best estimate.  I usually use 4% or less. Input how much you expect to spend each month.  And presto, it gives you the months/years til you hit zero.  Or it might give you a number that shows you can never go to zero. Best possible answer    There is no Plan B.

 

I did use a program called Financial Planner in  the early days of planning but it went away and my disk would no longer read on my newer PC's. I will take a look at your new program out of curiosity and what is involved. Maybe it will tell me I need to go back to work.

[elkroeger]

I do mine in Excel, and it works fine for answering the question "how much can I spend?".  I just tweak it up and down by adjusting spending as a percentage of interest earned.  Then I ran it out until my wife hits 100.  She'll be pretty much broke by then.  But I'll be long dead, and her plan is to live on Vodka and Hostess fruit pies if she makes it past 90 anyway.  That should shorten things up a bit.

 

Read Personal Finance for Dummies and then go to town.  I now have a financial planner, but it turns out that I wasn't too far off of her professional software, just by going off the dummies' rules of thumb.

[Patallaire]

We obviously use different software and create different income and expense models.  We frame it very differently then fixed withdrawal percentages.  By using a professional you should get the advantage of behavior financial input.  As an example, when the market falls by a substantial percentage did you account for that possibility?  How will you and can you adjust your lifestyle accordingly? How do you make purchase decisions and what impact will they have if you miss on your life and the longevity, what variable inflation and Rates of return and un-expected expense assumptions have you made.  How are you calculating rates of return, are they static or dynamic, what is your portfolio mix?   These are the things we bring to the table as well as being a phone call away and available for meetings face to face.  Now recognizing that there are "Do-it-yourselfers" out there as there are in our motorcycle repair and maintenance escapades, I am forced to recall a life changing conversation, when I took my bike in for a major repair and the manger asked me a series of question, which included asking me what I did for a living, how often I worked on my bike, what work did I feel comfortable doing, etc. he then began  complementing me about being close but not spot on for my repairs, being close created its own series of compounding negative effects.  After I told him he asked how often I did what I did for a living I told him, he then asked how many hours per day, I told him.  He looked at me and said, "I fix BMW motorcycles 12 hours a day and have all the updates from the factory in the manuals and all the training current and schools attended for me and my staff.  " Who, he asked, do you think is better equipped to fix your bike, you, who does it maybe 4 hours per year, or me and the team I assembled?" Game, set point. I have never done anything on my bike now but change the fluids.  Not because I don't think I can, but because his logic was hardly refutable.  Mans gota know his limitations!

[John Ranalletta]

 Nobody's software knows the future.  That's why all system are  modeled on the past.  That's why your firm and all the others put the warning at the bottom of all your documents, "...this is not a guarantee of future performance".

 

Monte carlo is monte carlo.  I trust the algorithms in Maxifi and it allows the users to account for life decisions to the extent they can be predicted.  My CFA has modeling software and it predicts a 99% chance of success based on the info it contains.  I wanted more data and more control.

 

Most advisory models don't let the client get in and play with various scenario and most advisors don't want to spend hours with clients (after all, time is money) as they mull over how their financial lives might play out, e.g. if we don't have LTC, how much should I sequester for that eventuality, what's the impact on discretionary spending if we continue to rent or buy another house or condominium;  how is the probability of success (not outliving one's assets) impacted by risk profile; what are standard deviations given each profile...

 

I know your programs are tops and I don't work on my own motorcycles (except the ones I buy already damaged), but having a degree in economics and finance and having co-owned a very successful business for the last 20 years, I think I can muddle along with Maxifi.

 

https://financialanalystinsider.com/maxifi-planner-review/

[realshelby]

21 minutes ago, John Ranalletta said:

 

 Nobody's software knows the future.  That's why all system are  modeled on the past.  That's why your firm and all the others put the warning at the bottom of all your documents, "...this is not a guarantee of future performance".

 

Monte carlo is monte carlo.  I trust the algorithms in Maxifi and it allows the users to account for life decisions to the extent they can be predicted.  My CFA has modeling software and it predicts a 99% chance of success based on the info it contains.  I wanted more data and more control.

 

https://financialanalystinsider.com/maxifi-planner-review/

I agree, as long as you can be responsible and take time to research.

I have a very well known financial planner working for my wife and I. 

Not absolutely sure he would do more for us than my wife could. Especially when you figure in commissions and fees. 

But that is the chance you take and at least he listened ( unlike a couple others ) to us when we said we wanted certain changes and directions. And you have to have someone that is able or licensed to buy into these products you want. That is how the Financial business is set up. Just like the Real Estate industry. Both are changing.

The biggest reason we use this person is that he agreed to personally oversee our account. Office visits to go over plans with him, not his staff. 

Because it is one thing to have a manager tell you what they know and can do, it is another thing when that manager passes on your work to someone who started last month. That applies to service work too. 

 

[John Ranalletta]

I’ve had very successful advisory firm clients for years.  Ability to sell and create relationships with clients valued more highly than analytical prowess.  They get client data and feed it to the computer at headquarters that spits out a plan. 

[John Ranalletta]

9 hours ago, realshelby said:

I agree, as long as you can be responsible and take time to research.

I have a very well known financial planner working for my wife and I. 

Not absolutely sure he would do more for us than my wife could. Especially when you figure in commissions and fees. 

But that is the chance you take and at least he listened ( unlike a couple others ) to us when we said we wanted certain changes and directions. And you have to have someone that is able or licensed to buy into these products you want. That is how the Financial business is set up. Just like the Real Estate industry. Both are changing.

The biggest reason we use this person is that he agreed to personally oversee our account. Office visits to go over plans with him, not his staff. 

Because it is one thing to have a manager tell you what they know and can do, it is another thing when that manager passes on your work to someone who started last month. That applies to service work too. 

 

 

Too often, clients don't grasp the inherent conflict in the advisor/client relationship.  An advisor has to "be in the market", e.g. in stocks today, but that may not be the best place for the client to be.  I had a few friends whose advisors put them in stocks heavily prior to 2007/2008.  Some of them had to extend their working years to make up the difference.  Have they "healed up" since?  Sure. But I remember their disappointment when their life plans were so severely damaged or delayed.  I read and hear too many stories about young investors who are "making a killing" in the market who were not yet in high school when the market crashed last.

 

How many advisors have their senior clients in stocks without hedging strategies today?  Likely, many.

 

Just today, Jim Cramer, (I think I just threw up in my mouth a little) said seniors should be mostly in stocks.  I'd rather hew to Nicholas Taleb's counsel:  Invest the bulk of one's money in the most secure instruments and gamble with a small percentage.   Today, many are doing the exact opposite because trees grow to the sky and the fed will continue with QE4 indefinitely.

[Patallaire]

Taleb has perfect 20/20 vision backwards.  His predictions are like a broken clock, right twice a day.  He may again be right, it is the when, that is unknown.  I like his books, but would not subscribe to his investment advise, especially in this Bond market.  As to all Monte Carlo stimulations being the same, on the surface that is true, the outcomes differ depending on the tail risks as well as the number of simulations factored into the analysis. Therein lies a major difference.  The more the merrier! By the nature of the business there can be conflicts, depending on how we are hired.  Is there bias, of course.  If we are hired just as a Planner, and you care about doing your own thing then there can't be a inherent conflict, just a bias as you are paying us just for advise or hourly, not engaging us as portfolio managers.  The fact of the matter, and this is harder to accept for a d0-it-yourselfer, is that we are really in the Behavior Finance business.  We help you by being a sounding board to your spending, to crashing markets, to rising markets, to longevity planning to asset allocation, to Divorce planning, asset protection,  Long Term Care Planning, to college planning and to help when your parents are on their way to the Nursing Home and we get the call as to how to protect assets, not for them but for you masked as a call to help them, or when you have wealth and you don't want your kids to inherit it in one lump, and you have no Will or Trusts in place, or we help interpret the Secure Act, etc.   Our crystal balls, and don't tell anyone I said this, are no different then any of the talking heads on TV! We have no absolute knowledge.  But here is a freebe, I guarantee that the markets will go up and that they will go down!  I just don't know the sequence or timing of either of those events, and frankly no one else does.  When someone generalizes about advisors and no hedging strategies, oftentimes the other side of the conversation with the client is very different then that broad brush.  The client may have a higher risk profile, they may have a strong cash flow, and they feel that a fixed income stream is not sufficient, they may have strong convictions or unrealistic expectations that need to be directed, but there are always two sides to the conversation.  We are all, or should be, product agnostic, it is and should be "what is getting you to fulfill your goal based on the parameters you gave us and we agreed to with you."  Trying to make gains make up for a lack of accumulation discipline is a fools errand, the clients sometimes believe it can be done.   We always discourage it, but we are competing with the talking heads and the do-it yourselfer friends at the Christmas party who are bragging about the rates of return they are getting, vs a conservative portfolio that we may have designed.  Goals and outcomes are dictated by discipline, a plan and the execution of the plan.  It is easy to be a critic, much more challenging to be in the trenches of misinformation.  John, you have a Bias, in that you stated that stocks may not be the best place to be and that you "threw up in your mouth a little when Cramer suggested seniors be in stock."  the implication of those statements are that you are right on your risk assessment and that everyone else is not.  You see how it works, even subconsciously. Bias shows through.  It also implies that we would mange portfolios statically, not dynamically.  It also implies that all hindsight is the judgement that should be used to measure Financial Planners.  That 2008 was predictable and that, while 2 people called it 100% right, that all should have known this vision is a false narrative.  I don't think, anyone's forward looking crystal ball saw that coming.  Fear and greed move markets.  Greed drove it up, Fear drove it down. Those of my clients, and I was following my own advise, who invested into that market came out of the other side with smiles on our faces.  Those who bailed had to be right twice, once to get out and once, when to get back in.  So, John, generalizations are just that, either a hindsight bias or a predictive bias, both carry their own weight, and that weight is a weight of righteousness.

[John Ranalletta]

8 hours ago, Patallaire said:

Taleb has perfect 20/20 vision backwards.  His predictions are like a broken clock, right twice a day.  He may again be right, it is the when, that is unknown.  I like his books, but would not subscribe to his investment advise, especially in this Bond market.  As to all Monte Carlo stimulations being the same, on the surface that is true, the outcomes differ depending on the tail risks as well as the number of simulations factored into the analysis. Therein lies a major difference.  The more the merrier! By the nature of the business there can be conflicts, depending on how we are hired.  Is there bias, of course.  If we are hired just as a Planner, and you care about doing your own thing then there can't be a inherent conflict, just a bias as you are paying us just for advise or hourly, not engaging us as portfolio managers.  The fact of the matter, and this is harder to accept for a d0-it-yourselfer, is that we are really in the Behavior Finance business.  We help you by being a sounding board to your spending, to crashing markets, to rising markets, to longevity planning to asset allocation, to Divorce planning, asset protection,  Long Term Care Planning, to college planning and to help when your parents are on their way to the Nursing Home and we get the call as to how to protect assets, not for them but for you masked as a call to help them, or when you have wealth and you don't want your kids to inherit it in one lump, and you have no Will or Trusts in place, or we help interpret the Secure Act, etc.   Our crystal balls, and don't tell anyone I said this, are no different then any of the talking heads on TV! We have no absolute knowledge.  But here is a freebe, I guarantee that the markets will go up and that they will go down!  I just don't know the sequence or timing of either of those events, and frankly no one else does.  When someone generalizes about advisors and no hedging strategies, oftentimes the other side of the conversation with the client is very different then that broad brush.  The client may have a higher risk profile, they may have a strong cash flow, and they feel that a fixed income stream is not sufficient, they may have strong convictions or unrealistic expectations that need to be directed, but there are always two sides to the conversation.  We are all, or should be, product agnostic, it is and should be "what is getting you to fulfill your goal based on the parameters you gave us and we agreed to with you."  Trying to make gains make up for a lack of accumulation discipline is a fools errand, the clients sometimes believe it can be done.   We always discourage it, but we are competing with the talking heads and the do-it yourselfer friends at the Christmas party who are bragging about the rates of return they are getting, vs a conservative portfolio that we may have designed.  Goals and outcomes are dictated by discipline, a plan and the execution of the plan.  It is easy to be a critic, much more challenging to be in the trenches of misinformation.  John, you have a Bias, in that you stated that stocks may not be the best place to be and that you "threw up in your mouth a little when Cramer suggested seniors be in stock."  the implication of those statements are that you are right on your risk assessment and that everyone else is not.  You see how it works, even subconsciously. Bias shows through.  It also implies that we would mange portfolios statically, not dynamically.  It also implies that all hindsight is the judgement that should be used to measure Financial Planners.  That 2008 was predictable and that, while 2 people called it 100% right, that all should have known this vision is a false narrative.  I don't think, anyone's forward looking crystal ball saw that coming.  Fear and greed move markets.  Greed drove it up, Fear drove it down. Those of my clients, and I was following my own advise, who invested into that market came out of the other side with smiles on our faces.  Those who bailed had to be right twice, once to get out and once, when to get back in.  So, John, generalizations are just that, either a hindsight bias or a predictive bias, both carry their own weight, and that weight is a weight of righteousness

Edited December 24, 2019 by John Ranalletta
Merry Christmas

[Jake]

I see around here that the maxim of no good deed going unpunished remains true. 

 

John, thanks for the tip.  I think I will check it out, because being able to run this on my own at any time I please without having to engage in a lengthy meeting with my Financial Advisor would be very liberating.  And I'm married to her.

[Sonor]

If you are looking for a software to just track your expenses and show you where you are spending the most etc. I use a FREE software called HomeBank.  Yes, it is FREE - no ads.  It is very good and can be found at http://homebank.free.fr/en/

 

Another thing I like about it is that it DOES NOT tie into your bank accounts like Quicken.  You enter everything.

[Patallaire]

On ‎12‎/‎24‎/‎2019 at 10:40 AM, John Ranalletta said:

 

Merry Christmas to you also. 

 

[elkroeger]

On 12/23/2019 at 5:21 AM, Patallaire said:

....Game, set point. I have never done anything on my bike now but change the fluids....

 

Wow, that is really a sad story.  So he's better at it.  So what?  Everywhere you look, there is someone better at it than you are, and has made a career out of it.  So you should stay home, and stay in bed?  Hell no.

 

Reminds me of my grandmother.  When she was young, a music teacher told her she was tone deaf and to never sing.  She lived to be 100, and NEVER once made a noise in church on Sundays.  When everyone else was rejoicing in the hymnals, she was lip syncing it.  It's really disturbing if you think about it.

 

Couple of books for you to read:

Zen

Shop Class

[Patallaire]

Man's gota know his limitations!  I did all the work prior to that including greasing the splines in the Tranny.  Took the entire assembly apart.  The mechanics know what they know, and I know what I know.  He had made a great point, my career is not a motorcycle mechanic, his is, his career is not a financial planner, mine is.  Now I may believe as people believe, that they can do what I do and I can do what they do, and perhaps we can, but the reality is,  that I and the mechanic know our respective fields more insightfully. We bring a value and that value is knowledge and a feel for it from doing it 12 hours a day, and the professional training that comes with that responsibility.  Hobbyists enjoy what they do, but they are not professionals. So, having gained that insight, I choose to not be a hobbyist, rather I leave the professionals to do what they do.

[elkroeger]

What I'm hearing is that you just don't want to.  And that's okay too.  But I think your mechanic just gave you a line to drum up business.  Hell, they probably had that sales pitch all worked out ahead of time, in their team meetings.  I'd find a different mechanic.

[John Ranalletta]

1 hour ago, elkroeger said:

What I'm hearing is that you just don't want to.  And that's okay too.  But I think your mechanic just gave you a line to drum up business.  Hell, they probably had that sales pitch all worked out ahead of time, in their team meetings.  I'd find a different mechanic.

becoming proficient enough to do anything other than minor repairs on new bikes requires an investment of time & energy. If one derives  satisfaction from the investment and the work, cool. Go for it. OTOH, I can invest the same time and energy to produce enough incremental income to support another hobby or add another bike to the stable. 
 

YMMV

[Patallaire]

Quote

But I think your mechanic just gave you a line to drum up business

Possible, but unlikely.  It was a pure response and in fact all the work I did was close but not perfect.  Compound a plethora of not perfect with a number of repairs and you have created a problem.  When I raced cars I discovered that close enough wasn't good enough.  If it wasn't right before I left the pits or the shop it was going to create a problem under stress.  So. yes, I do not want to, his logic was irrefutable, I only worked on my bike a few hours every year, he works on them, as I work at my craft 12 hours a day, he clearly knows more and has more experience then I would ever have.  So as John said, proficiency and being able to do something are not the same, wanting to and believing you are truly proficient are more often then not delusional. When I read the posts by Dirt Rider, it only re-enforces to me that I don't know what I don't know.  So, again, it's not that I can't or don't want to, I know my limitations, and like John, if I put a dollar amount on my time, working on my bike  is not profitable or rewarding enough to continue.   Close enough is only good in horseshoes and hand grenades. You obviously enjoy it, and actually believe that you are proficient at it as well as having a different value on your time, or don't value it at all and just consider time spent to be part of your hobby, and not a real cost, so, by all means, go for it. Logic won when the mechanic said what he said, I am fine with the outcome.

[elkroeger]

On 12/27/2019 at 5:16 AM, Patallaire said:

...You obviously enjoy it, and actually believe that you are proficient at it as well as having a different value on your time, or don't value it at all and just consider time spent to be part of your hobby...

 

I never said anything of the sort.  I'm all thumbs.  Generally, it can be rewarding, and I will sometimes take on auto/moto projects that expand my box.  But the vast majority of the time, the fastest and most cost effective thing for me to do is to take it to a guy, so I can get on the road again.  But I'm not doing that because some "pro" told me I was incompetent, and not to try.

 

I think the way your mechanic put it is actually offensive.  It comes across as condescending and pompous.  And what you're telling us is that you stopped playing mechanic at home because of it, specifically.

 

Let me ask you this:  Do you tell your customers that?  "Money is complicated, and I'm superior, so don't try this at home."  Or do you tell them "I'm here to HELP YOU realize a financially secure future."  Those are two different messages.  What your mechanic should have said was "I'm here to see that you have as reliable a bike as you can get, so that you don't have needless, unexpected failures in remote places."  Perhaps adding "I can do that for you, but you're working against me here...."

 

[Patallaire]

He did paint a safety issue portrait of me riding with my wife on the back.  The 'Pro" made a logical argument, I accepted it.  As to what I tell clients, I encourage them to do whatever makes them comfortable.  If they have the same research I have and spend the time I do then have at it.  I also tell them I can lose money with the best of them, generally I don't and our model isn't centered on just rates of returns, while we feel it is important we are a resource for many areas of someone's life and we deliver a different experience.  I really wasn't offended by the mechanic, I thought he made his point and it was a logical conclusion.  I don't work on bikes and when I did it was maybe 4 hours a year.  What he said had an impact, it wasn't complicated nor did it offend my ego, it was pure logic. He is a mechanic, not a word smith, he made his point, I internalized it, it made and makes sense.  So I am actually grateful, it is one less thing I need to concern myself with and I have a great paper trail for the next keeper of the ignition key.