Tuesday, October 16, 2007

A Better-Than-Free Lunch

A couple of weeks ago, I dropped my business card in a fishbowl that boasted "Free Lunches!" hoping I would get lucky. Shortly thereafter, I received a phone call from Charles at Ameriprise, telling me my card had been drawn. I hadn't realized that the free lunch came with a consultation, but hey, I can endure 5 minutes of blab for some free eats. I booked the lunch for today.

My husband, 2 coworkers and I met at the restaurant at 1pm. It was held at a 4 star restaurant about 15 minutes from my house. We sat down, ordered drinks and our meals. Then Charles came in.

I wasn't really expecting too much. The first thing he did was ask what the #1 cause for house foreclosures is. I replied medical debt, which he said is correct - that and disability. (I haven't checked if this is accurate, so don't quote me.) Then he started talking about goals and how to ensure that they weren't inhibited before they could be met. He touched upon 401(k)'s, IRA's, 529b's etc, etc, etc. Then we filled out a questionnaire about our current finances (Are you saving for retirement? Do you know what age you want to retire?), paid for our food, and went on his merry way.

Nothing he said during our meeting was revolutionary, at least to me. I read a lot of personal finance books, and, while I'm no expert, feel as though I have a pretty decent handle on things. I know at this point in our lives, our focus is on debt payoff, and we're pretty much ignoring retirement, savings and investing until then. This is a temporary plan, which we will alter once all the credit card debt is gone. I think it's the right idea, but maybe a second opinion wouldn't be so bad.

So I'm considering setting up a meeting with Charles, if nothing more than to go over our current course of action and get his input. He did say that we could have a free consultation. I'm going back and forth with myself about it. Does anyone use a financail planner currently? Is it worthless to see one when you're still getting out of debt?

My husband was smarter than I was, though, and ordered a pizza for his free lunch - so we have plenty of leftovers for lunches.


marsman57 said...

I don't know much about financial planners, but I think that saving for retirement as early as possible is a good thing. Here are a couple quick reasons:

1. If your employer does matching 401k contributions, you're missing out on free money by not putting money into your 401k.

2. 401k contributions are pre-tax

3. If you don't think a 401k is right before you are debt-free, you should still consider a Roth. The contribution limits are low enough each year that you may miss the fact that you will never be able to add that money you missed adding.

4. This is just my personal opinion, but even in the debt reduction stage, I think it is important to build a savings nest egg so that you have something to go to besides credit cards if something comes up. My good friend and I have had a lengthly debate on the merits of this though because the numbers technically show that it is slightly more efficient to pay down debt wholeheartedly first and then just put any other expenses on the credit. I think the psychological benefits are worth it though.

Anyway, I think if the consultation is free and you have time to do it, go for it!

JvW said...

marsman - I know, I know. Logically you're completely right. I'm afraid that we'll pass the income limit for a Roth in the next few years and miss our opportunity. (Stupid thing to be afraid of, right?) I am missing out on the 401k contributions, but my husband owns his business and they have no retirement plans offered.

At this point, I just want to be done with the credit card debt, and we're aiming for April 2008. I want to open a Roth before then for each of us, and then approach the 401k. You do make valid points, you're quite possibly in a better mindset than I am, I just choose to be stubborn :)

Anonymous said...

I have some friends who were clients with Ameriprise and they did not have a good experience - the advisors push certain products etc, service was not good. Dont think Ameriprise is thought of highly among the advisor world also. Just a FYI from what I know. Possibly you may want to look into them in more detail.

Btw: They use the fishbowl technique to get new clients - everyone who drops their card in the bowl gets an invite :-)

I live in Canada and they are not up north. So no personal experience with them.

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