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Hi from jennyincorp - clueless & want to be more proactive
Old 06-29-2011, 02:45 PM   #1
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Hi from jennyincorp - clueless & want to be more proactive

So I'm 28 and I pretty much think myself as clueless when it comes to investing . Maybe not as clueless as I think...but pretty close. Sure I have an MBA and majored in econ for undergrad...but I'm not too confident that really makes me any more investing savvy.

My father used to do all the managing for me...but not the case anymore. I want to be more proactive and manage my portfolio better, rather than what I do today, deposit money into the account, buy a fund/stock and then leave it. But once I start trying to figure out what type of products I should be buying in my stock and roth IRA fund...acronym's and all...I feel like I'm in a sea of things beyond my comprehension. The general rule of subtract 100 from your age, I get. Now the question is...what do you buy to get to that breakdown?

Between my roth, trading acct, bene ira, bene roth...I have about $155k
I own my current condo, bought it for $525k, lucky if I can get that amount now. Mortgage paid.
Single, planning to get married in the future. Kids in the future? Most likely. 2 max.
I currently make $90k a year + bonus if I have a good year. I don't foresee that amount increasing by much in the future. I spend about $35k a year...to high ball it.
About $50k in the 401k. I deposit 8% and company matches 10% up to 5%. I have an 80%/20% split.

I'm not sure if any of that was relevant or not....
I don't know when I want to retire. I had always assumed I would work till 65....who knows if that really is the case. I guess my question is are there any recommendations on good investment books to read or a good starting point?

I understand the basic concepts of the market...from what school had taught. I had come across recommendations of Suze Orman's young and broke book...but don't think that'd be the right resource. Understand that retirement age is a big factor, but would love to lay the groundwork of sound investing knowledge so that when i finally do decide what the appropriate retirement age for me is....I'll have a better understanding of what I'll need and can figure out if I'll be able to live off that amount.

Sorry for the loong post. This all started b/c my mom recommended a family friend's son as someone who could help manage...he's an FA at ameriprise. Though he's my age and that makes me kinda nervous.
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Old 06-29-2011, 03:04 PM   #2
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You seem to be in very good shape for 28.

I think others will chime in with nasty comments about Ameriprise. I have no experience with them. I use Vanguard and TIAA CREF.

Before going to an FA I highly recommend reading:
1. The Four Pillars of Investing
2. The Bogleheads Guide to Investing

Both describe a low cost indexing method of investing. They'll give you a good grounding in terminology, and might make you think twice about needing an FA.

I also suggest playing around with the FIREcalc this site links to. I found it very illuminating.
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Old 06-29-2011, 03:12 PM   #3
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jennyCorp:

You are doing well for someone your age.

The 80/20 split (I assume 80 % stock) is just about right for you.

Watch those fees in your accounts they can rob you blind over long periods of time. Ameriprise has the reputation for robbing their unknowing customers with their high fees and structured products. If you need an advisor get one from Vanguard or even Fidelity.

If you need a recommendation for funds, I would recommend equal mixes of the following low cost funds.

Vanguard Star fund - a world-wide stock/bond balanced fund
vanguard Total Stock Market Index fund.

really - A portfolio like this (or something kind of like this) is all you need.

Others will chime in here I am sure.
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Old 06-29-2011, 08:36 PM   #4
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Welcome Jenny. Please feel free to use the google function on this website to find a lot of useful information.
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Old 06-29-2011, 08:41 PM   #5
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Hi Jenny:

You might also take a look at the Early Retirement FAQ subforum, located here Early Retirement FAQs - Early Retirement & Financial Independence Community

It will point you to other resources that will be useful.
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Old 06-29-2011, 08:47 PM   #6
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Ameriprise does NOT get high marks in my good. Run away from them as fast as you can, friend of the family or not.
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Old 06-29-2011, 08:47 PM   #7
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Hello Jenny

When I first started investing, I read every book I could get my hands on, mostly about mutual funds. I knew I would not have the interest or guts to be a stock picker. Some folks here do that very well. It all depends on your stomach for risk.

Morningstar has good articles about asset allocations for given age groups. Registration is free for basic information. Look under the Real Life Finance tab (right side of the page) at
www.morningstar.com
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Old 06-29-2011, 08:56 PM   #8
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Welcome Jenny!

Here's an article that addresses your question,, just published today:

Don't let friendship steer your choice of investing advice - The Globe and Mail

For all the stated reasons, I would avoid getting involved with a financial advisor who is a friend.
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Old 06-29-2011, 09:06 PM   #9
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Quote:
Originally Posted by jennyincorp View Post
This all started b/c my mom recommended a family friend's son as someone who could help manage...he's an FA at ameriprise. Though he's my age and that makes me kinda nervous.
It's not the age that should make you nervous, it's the company. Do some serious homework before relying on any FA, especially one associated with that particular financial services provider.
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Old 06-29-2011, 09:07 PM   #10
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Quote:
I guess my question is are there any recommendations on good investment books to read or a good starting point?
Here: An updated FIRE recommended reading list (with a military twist)

And here: Books: Recommendations and Reviews - Bogleheads

Both lists overlap a lot. You don't need to read them all!

If I was to pick one it would be one of these. 4 pillars is longer and more academic.
Ditto on running as fast and far from financial advisor - especially from Ameriprise. With your background this stuff will be easy - Wall Street wants you to think it is hard and complicated. It is not.

Oh and welcome to the forum!

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Old 06-30-2011, 09:07 AM   #11
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Hey Jenny (my sis's name)!
I think that you are right to be cautious and interested in educating yourself about financial matters. When I was 28, I was a good saver, but didn't have any really great sense of when I wanted to retire or what I should be invested in, either.

Looking back, I think what triggered my confidence to dive into financial matters was that I never wanted to be a passive sort of person that just handed off my hard earned money to someone in the hope that they'd take care of me. Too paternalistic for words.

So, I started looking for people who were professionals in their own fields but who were also good savers and invested their own money and began asking questions.

One rather fortuitous find was the dad of a childhood friend who'd actually become a money manager in his 50s after another successful career. He offered suggestions (and no fees) to just talk to me about mutual funds, how to review track records and asset allocation, and the general mechanisms of buying and selling funds.

Long story short, I now work in the business he started, as a financial planner. I, too, am wary of you getting roped into a relationship with someone at Ameriprise, even though the friend may have the best of intentions, simply because their business model is to sell you stuff that makes good commissions for the salespeople.

Like you, I like my mentors and advisers to be older than me! I think you should keep reading and learning, always putting the "sniff test" first on any potential investment, and never forgetting that no one has your best interests at heart more than you!

And welcome!
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Old 06-30-2011, 09:24 AM   #12
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Ameriprise earned such a bad reputation, they were disowned by American Express several years ago. Changed the name of the company and everything...

My financial advisor runs an Amperiprise franchise (practice?). He's fine. I went to him for a flat fee advising, didn't give him any of my money to invest, due to the recurring yearly % based cost. It does ultimately comes down to the individual advisor.

You are doing pretty fantastic financially. Are you working in a field you enjoy? If so, you might not need to put much thought into this. Conservative, safe investments, aggressive enough to protect against inflation, and you'll be fine.
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Old 06-30-2011, 10:24 AM   #13
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You are doing a GREAT job in saving! Keep it up!

What I noticed was the 1% match that you are losing by not meeting the 10 % threshold for the full company match. That extra 3% over time WILL add up. Others have talked about lowering your service costs of Ameriprise. The lost match will run as much as the cost of active funds, in my own experience. I also prefer Vanguard. The structure of their funds makes their representatives meet legal fiduciary duties to their investors, UNLIKE other funds.

The suggested books are a good start, and with your background should not be a difficult slog.
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Old 06-30-2011, 12:09 PM   #14
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Think about staying single.
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Old 06-30-2011, 04:57 PM   #15
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It's not the age that should make you nervous, it's the company.
Dang -- beat me to the punchline...
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Old 06-30-2011, 08:11 PM   #16
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Welcome. You are off to a great start. Take time and learn about the different assest classes. i.e. stocks, bonds, mutual funds, ETF, Reits, Closed end funds, CD and even options. Max out the roth IRA. I would not do a Roth 401K. Put as muck as you can in the 401K because it nice to get 100% of your hard earned income working for you tax deferred. And usually your take home pay only goes down approx $74 for every $100 put in.

Do you have an emergency fund? Take an hour at lunch and call around to your local credit unions and ask about CD rates. Mine pays 3% for 6 yr. Buy a 1-2K CD every 3-4 months to fund your emergency account.
It is always good to know CD rates because I use it as a bench mark for a return with zero risk and zero costs. And then you have experience in the exciting world of CD ladders.
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Old 06-30-2011, 08:56 PM   #17
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Think about staying single.
Quote:
This all started b/c my mom recommended a family friend's son as someone who could help manage...he's an FA at ameriprise. Though he's my age and that makes me kinda nervous.
I am thinking your mom is trying to be a matchmaker.
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Old 07-01-2011, 08:23 AM   #18
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Welcome Jenny

I must admit I am somewhat curious about the "trading account".
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Old 07-01-2011, 08:36 PM   #19
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Hi Jenny and Welcome. You are about my daughters age and probably similar place in life. The one thing that I have alway made sure is that she had adequate insurance being health, disability, auto, home and umbrella liability.

I never thought about it until just now. She should probably be seeking some information on this forum. I have been helping make decisions on her investments, but she is more independent having recently moved out of town.

Best of Luck.
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Old 07-04-2011, 11:04 AM   #20
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You've done well. Please don't use Ameriprise. I made the mistake of using them at your age. This company will fee you to death. They target friends, friends of friends and family members which gives them instant trust and then you'll get whacked with over-priced junk that makes them money at your expense.
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