Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Inheritance
Old 02-21-2018, 12:56 PM   #41
Dryer sheet wannabe
 
Join Date: Feb 2018
Posts: 22
Inheritance

I am new to the forum but I am liking what I hear already. I have been investing in my 401k for 25 years, I am 58 yo and also looking to hang it up. I have made spectacular mistakes but through it all I have still managed to beat the market by 2% points of 25 years so at the very least I am lucky.

The common refrain here is to beware of fees. The forum members are absolutely correct. Jack Bogle is a very smart man and I remember an article I read from him many years ago that was so amazing I had to run the math myself. He said that if you have two investors who get the market return over 40 years, one of which pays a 2% fee and the other pays the low fee of an index fund, the difference in the balance of their portfolio is a staggering 60%! So fees are a killer for sure.


You have already been investing in your 401k in low cost funds so you are on the right track. Presumably this money would be outside the 401k. My recommendation is to manage it yourself. Assign a time horizon to the new money ie. how long before you actually need it. whatever portion is longer than 20 years, that should be 100% total market or 500 index. There is a zero percent chance by history that you will come up negative on that. Less than ten years I would likely dollar cost average into a total bond market fund. Yes, we are in an interest rate rising cycle and there will likely be a short term modest loss over three years. Read the fidelity bond site articles about that. The money between ten and 20 years I will defer to the forum, but probably 50%total market/50% bonds.

Warren Buffet recommends 10% bond fund, 90% total market/500 index IN RETIREMENT! I think it works well if you can live on the bonds for at least five years so you don't have to redeem your equity shares in a down market.

One last thing....read every day. "The Big Picture blog" c/o Barry Rhitholz is one of my favorites. I have read it every day for the past decade at least. Very informative. J
__________________

joel2125 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-21-2018, 01:00 PM   #42
Full time employment: Posting here.
Luck_Club's Avatar
 
Join Date: Dec 2016
Posts: 595
Quote:
Originally Posted by Happyras View Post
Just a heads up. From my experience they will put you in MF that have expenses, that include such things as marketing kick backs to the selling agent among other bogus fees. That .40% AUM fee is only a small portion of what the bank gets on your investment. Also, they will likely put you in worthless Market Neutral funds, which have fees with no returns just to maintain a cash position while making a kick back fee.
They have 5 managed services:
1) Digital adviser -Mutual Funds, etfs etc
2) Portfolio Advisory service - Mutual funds
3) Personalized Portfolios - Funds etfs
4) Separately managed accounts - INDV Stocks & Bonds (this is the one I was referring to in prior post.)
5) Wealth Management advisory -(10 Milion + entry)
__________________

__________________
2017 dry run spending: 2018 accelerate debt elimination: 2019 RV procurement & 1MY begins: 6/19 DW last month went early: 9/19 start cross country loop: 1/20 first reinforcements arrive. 6/20 sell business or shut doors. 9/20 begin globe trot: 4/26 401K reinforcement.
Luck_Club is online now   Reply With Quote
Old 02-21-2018, 02:57 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,560
Send a message via Skype™ to kcowan
Quote:
Originally Posted by gerntz View Post
Interesting approach. Keep cost of AUM advisor down by letting him/her manage a small portion of your total & then mirror his recos on your own. Good deal.
Yes. When he wanted to present his pie charts (comparing to benchmarks), I would show him the ROI in our hands from our spreadsheet...and also share how it was doing to our other components. (Usually a couple of % less but I also explained the insurance aspect.)
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 02-21-2018, 03:10 PM   #44
Thinks s/he gets paid by the post
SumDay's Avatar
 
Join Date: Aug 2012
Posts: 1,115
I came to this forum several years back, after DH was offered a lump sum from his megacorp pension. A "financial advisor" was selling us hard on an annuity, and luckily this site set me straight. Someone suggested we look here: https://www.napfa.org/ We found one who charges a flat fee. She went through everything (how much we pay for cable, groceries, phone, home insurance, etc). I'm pretty organized but she made me feel like a slug. Anyway, her first time fee was less than we'd spend on a plane ticket, and follow-up visits (which we do every few years) are less than we spend on eating out a month. Now she just reviews our asset allocation, suggests tweaks, which we make at Vanguard, and we're done.


DH has NO interest in any of this, and for me it's well worth the price to have someone to bounce ideas off and ask questions when I get stumped. I need it and it helps me sleep. Well worth it, to me anyway.


Good luck to you and congrats on your new found wealth. And sorry for your loss.
SumDay is offline   Reply With Quote
Old 02-21-2018, 08:32 PM   #45
Recycles dryer sheets
 
Join Date: Apr 2016
Posts: 224
As the posts on this thread demonstrate, I am in a very small minority on this Board who use a financial advisor. (But, of course, many people in the world use financial advisors -- otherwise, the profession would have ceased to exist). So, this Board is not a representative sample -- it is very heavily weighted in the DIY direction.

I negotiated the rate scale so that I pay around 50 bps. It is a sliding scale, but that is, more or less, what it works out to.

I find that I get good value. The fee, even at 50 bps, is not cheap. But they have helped me do planning, given me the benefit of a couple of generations of perspective and insight into what has -- and has not -- worked well for comparably situated people, done projections that I find useful and that have given me confidence about my retirement plans, done a bunch of mechanical work that I don't have time for, given me tax advice that has saved me money, helped me think through asset allocation issues and withdrawal strategies, kept the portfolio reasonably well balanced, done some tax loss harvesting, and helped me avoid mistakes that could have been costly. So, I am fully satisfied and I think it has been money well spent.

I am a big fan of expertise, generally. I get medical advice from doctors (even though I am capable of doing medical research and making medical decisions on my own), i let mechanics repair by car rather than DIY, hire plumbers and electricians, painters, etc. They know how to do their trades better than I do. The same is true with my FA.

Sometimes, one reads on this Board comments about dishonest FAs who put their own interests above their clients' interests, or even steal money or whatever. And I am certain that dishonest FAs exist. I am also certain that dishonest ministers, and doctors, and accountants, and lawyers, and electricians, and undertakers exist. So it is important, if you use an FA, to get references and do appropriate diligence.

I am NOT saying that you should use an FA. It is perfectly fine to invest on your own and manage your own money. Whatever you want. Many people have done that very well. Some have done it very badly. Just like those who fix their own cars.

But I did not want you to think that EVERYONE believes that FAs are a dumb idea. Because that is not the case.
medved is offline   Reply With Quote
Old 02-21-2018, 09:55 PM   #46
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,673
Quote:
Originally Posted by medved View Post
As the posts on this thread demonstrate, I am in a very small minority on this Board who use a financial advisor. (But, of course, many people in the world use financial advisors -- otherwise, the profession would have ceased to exist). So, this Board is not a representative sample -- it is very heavily weighted in the DIY direction.

I negotiated the rate scale so that I pay around 50 bps. It is a sliding scale, but that is, more or less, what it works out to.

I find that I get good value. The fee, even at 50 bps, is not cheap. But they have helped me do planning, given me the benefit of a couple of generations of perspective and insight into what has -- and has not -- worked well for comparably situated people, done projections that I find useful and that have given me confidence about my retirement plans, done a bunch of mechanical work that I don't have time for, given me tax advice that has saved me money, helped me think through asset allocation issues and withdrawal strategies, kept the portfolio reasonably well balanced, done some tax loss harvesting, and helped me avoid mistakes that could have been costly. So, I am fully satisfied and I think it has been money well spent.

I am a big fan of expertise, generally. I get medical advice from doctors (even though I am capable of doing medical research and making medical decisions on my own), i let mechanics repair by car rather than DIY, hire plumbers and electricians, painters, etc. They know how to do their trades better than I do. The same is true with my FA.

Sometimes, one reads on this Board comments about dishonest FAs who put their own interests above their clients' interests, or even steal money or whatever. And I am certain that dishonest FAs exist. I am also certain that dishonest ministers, and doctors, and accountants, and lawyers, and electricians, and undertakers exist. So it is important, if you use an FA, to get references and do appropriate diligence.

I am NOT saying that you should use an FA. It is perfectly fine to invest on your own and manage your own money. Whatever you want. Many people have done that very well. Some have done it very badly. Just like those who fix their own cars.

But I did not want you to think that EVERYONE believes that FAs are a dumb idea. Because that is not the case.
I echo every point that you made. Your post is such a breath of fresh air in this forum.

It seems that the general population here believes that 1% AUM is the minimum management fee charged in managed accounts, which is very incorrect -- in some cases by a lot. Of course there is the self-fulfilling prophecy in which, for example, one might pay 3% or 4% management fees which would be a losing proposition in the long run -- just don't do that. Just about anything can be messed up, and if someone voluntarily pays a high management fee then they have messed up and it is probably their fault. We also hear about 12b-1 fees (that really aren't that high) and those 12b-1 fees are usually waived in managed accounts. I would suggest that most DIY'ers here do not fully understand how managed accounts work. We even had one poster who insisted that wrap fees for a 401K or IRA were required to be paid from separate after-tax money, which is totally false -- those wrap fees are paid from the 401K or IRA account and are not treated as a retirement fund distribution for tax purposes. Nobody (except me) stepped up to correct this person's very incorrect post. This says something about the group -- the forum. Wrap accounts generally use institutional class funds for which there is no front-end load and lower expense ratios than retail fund classes - facts that are frequently glossed over by most of the DIY posters here.

To be objective, there is a lot of really good information in this forum, and there is also a lot of misinformation.

So please be objective with your posts and comments, and do your research before posting.
Rustward is offline   Reply With Quote
Old 02-22-2018, 07:14 AM   #47
Full time employment: Posting here.
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 792
Quote:
Originally Posted by medved View Post
As the posts on this thread demonstrate, I am in a very small minority on this Board who use a financial advisor. (But, of course, many people in the world use financial advisors -- otherwise, the profession would have ceased to exist). So, this Board is not a representative sample -- it is very heavily weighted in the DIY direction.

I negotiated the rate scale so that I pay around 50 bps. It is a sliding scale, but that is, more or less, what it works out to.

I find that I get good value. The fee, even at 50 bps, is not cheap. But they have helped me do planning, given me the benefit of a couple of generations of perspective and insight into what has -- and has not -- worked well for comparably situated people, done projections that I find useful and that have given me confidence about my retirement plans, done a bunch of mechanical work that I don't have time for, given me tax advice that has saved me money, helped me think through asset allocation issues and withdrawal strategies, kept the portfolio reasonably well balanced, done some tax loss harvesting, and helped me avoid mistakes that could have been costly. So, I am fully satisfied and I think it has been money well spent.

I am a big fan of expertise, generally. I get medical advice from doctors (even though I am capable of doing medical research and making medical decisions on my own), i let mechanics repair by car rather than DIY, hire plumbers and electricians, painters, etc. They know how to do their trades better than I do. The same is true with my FA.

Sometimes, one reads on this Board comments about dishonest FAs who put their own interests above their clients' interests, or even steal money or whatever. And I am certain that dishonest FAs exist. I am also certain that dishonest ministers, and doctors, and accountants, and lawyers, and electricians, and undertakers exist. So it is important, if you use an FA, to get references and do appropriate diligence.

I am NOT saying that you should use an FA. It is perfectly fine to invest on your own and manage your own money. Whatever you want. Many people have done that very well. Some have done it very badly. Just like those who fix their own cars.

But I did not want you to think that EVERYONE believes that FAs are a dumb idea. Because that is not the case.
As a DIY type, I agree with your statement 100% Not everyone has the time or inclination to educate themselves on all the required information to make decisions on their future income. Even if they do learn everything, they lack the experience of some FAs that have been there before.

Great post!!
__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 02-22-2018, 10:13 AM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,560
Send a message via Skype™ to kcowan
Also a good financial plan can help making life decisions. That has little to do with portfolio selection.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 02-22-2018, 10:56 AM   #49
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,278
Quote:
Originally Posted by kcowan View Post
Also a good financial plan can help making life decisions. That has little to do with portfolio selection.
Yes, as has been mentioned, many discussions around here conflate "investment advisor" with "financial planner." Few, if any, of the rants, cheap shots, or impassioned arguments around here pertain to actual financial planners. You don't find real financial planners at investment companies, whether Vanguard or Morgan Stanley. What those guys do is a subset of what financial planning encompasses.
__________________

OldShooter is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
advisor or no advisor frank FIRE and Money 10 04-29-2014 07:58 AM
Ditching your Financial Advisor?? AJL FIRE and Money 22 11-14-2005 02:18 PM
Poll: Would you want to be a financial advisor? just_hatched Other topics 5 09-16-2005 06:16 PM
Financial Advisor (CFP) Horror Story intercst FIRE and Money 7 07-28-2005 05:55 PM
terminating Financial Advisor (DFA) oldcrowcall FIRE and Money 4 05-02-2004 03:43 PM

» Quick Links

 
All times are GMT -6. The time now is 09:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.