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Like Lemmings over a cliff...
Old 08-22-2007, 09:25 AM   #1
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Like Lemmings over a cliff...

Hi folks, I'm Andy, a financial advisor. I've spent considerable time reading posts herein and finally decided to join in. So here's my introduction: I'm passionate about getting people ahead in life, but I don't invite unnecessary risk. What I believe to be true is that most people when evaluating their finances, confuse CONSERVATIVE with CONVENTIONAL.

I offer the story of the lemming. A small rodent-like creature with a peculiar migration habit. Evidently at some point every year these little guys start running in enormous numbers...the stampede eventually concludes as they leap over a cliff into the ocean. A few of them swim back to shore, most die. CONSERVATIVE? or CONVENTIONAL? See the difference? Heck yes, it's conventional...they do it every year, but I wouldn't exactly call leaping off a cliff to your death a conservative act!

All too often as we evaluate financial situations, we make our decisions based on what we believe is CONSERVATIVE thought when in fact what we're doing is evaluating opportunity based on what we've always done. What we've always done has gotten us into more consumer debt than ever in our history, more frequent bankruptcies, less home equity, underfunded retirement accounts, etc etc.

I encourage all to break out of the chains of "what we've always done" and accept that different doesn't always mean RISKY!

If you need an opinion, I'll probably have one! Thanks for letting me chime in!
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Old 08-22-2007, 09:31 AM   #2
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Hi Andy,

Welcome to the site. As a financial advisor you might take a little heat from some of the regulars here. We try to keep a fairly loose leash on most of these discussions but one thing we don't allow is cruising for clients by any profession. I am not saying that is why you are here but consider this a friendly note to set the stage for future postings.
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Thanks Steve
Old 08-22-2007, 09:36 AM   #3
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Thanks Steve

Smiling ear to ear...let me assure, I can take the heat, and also note the relative anonimity herein...no website, no phone number...I'm not here for clients, just thought I'd be fair about my background and thus, perspective.

I look forward to participating! Andy
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Old 08-22-2007, 09:54 AM   #4
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So Andy, are you a fee or commision based financial advisor?
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Old 08-22-2007, 10:07 AM   #5
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I can be both and can argue both sides of that equation.
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Old 08-22-2007, 10:21 AM   #6
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I can be both and can argue both sides of that equation.
Me too - being a 'professional' ER (with a Curmudgeon Certificate) - I can take straight cash or auto deduct a percent from my portfolio.

heh heh heh
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Old 08-22-2007, 10:24 AM   #7
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Good luck with that, Andy. Seriously, this is not the crowd to argue that commission based advisory services are a good thing. You'll find that many of us in financial services keep a very low profile on our respective "day jobs", well, with the exception of "teflon finance dude", who good-naturedly takes on some tough subjects. These folks are not like anything you might see in your practice.

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Old 08-22-2007, 10:40 AM   #8
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Again, with a chuckle; Thanks Sarah. Thick skin comes with the package here. And I really don't want to defend my profession on this site, only wished to disclose for perspective sake. I understand entirely the resistance to "commission" guys, but the reality is that far too many middle Americans need help but think fee-based advisors are only for the wealthy. I hope this site has a few advisors who can simply share a perspective without any underlying motivation or ax to grind. I'll accept the attack if I deserve it when it comes, but until then, I'm just a self-proclaimed qualified opinion. Again, thanks for your thoughts!
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Old 08-22-2007, 10:47 AM   #9
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Welcome Andy.

I would love to know how you manage your own money. Please share if you don't mind. I am not interested in numbers, just methods, concepts, and the thinking behind them.

The lemming story is interesting, but it does not tell me anything about investment, financial independence, or early retirement.
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Old 08-22-2007, 10:55 AM   #10
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Actually, the lemming story made me think of a line of books with purple covers and yellow lettering, "Rich Dad Poor Dad", which is why I asked about fee vs. commission.
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Old 08-22-2007, 10:58 AM   #11
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Thanks for the welcome, Sam. Let me stay 50k foot view with this: diversification in investment (sectors/types/guarantees/risk), diversification on tax implication (pre/post/long-term-cap gains/ordinary) {tax consideration seems to be an area missed by a lot of individuals planning for retirement}, elimination of debt. The overriding principal, however, and don't take this lightly, "Sleep at night". That said, personally, I sleep well when I have a bit of risk, so there's part of my "portfolio" that you could call "start-up" potential. Hey, this isn't practice...you only live once. I try to commit to LIVING before I die!
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Old 08-22-2007, 11:02 AM   #12
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Laurencewill: Robert K. is a wealth of good knowledge properly applied. I bought his Rich Kid Smart Kid book for my oldest son...then had to fight the battle of making sure he still understood the value of an education. If only it were so easy as to "invent" the velcro wallet!
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Old 08-22-2007, 11:07 AM   #13
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So the moral of the story is...

Don't do the conventional thing - you'll die plunging off a cliff ! Do the conservative thing - The smart thing that I will now tell you about...

That isn't quite what will happen. It's not like everything is fine and then all of a sudden the bottom falls out. There is plenty of warning before that happens. It's more like the smart fish know to swim away from the work/consume/credit maelstrom. Those that just do the easy thing (the conventional thing in your terms) will have to swim harder and harder and harder to keep their heads above water.
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Old 08-22-2007, 11:12 AM   #14
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OK, this forum is a hoot! Master Blaster...GREAT ANALOGY! Pictures speak a thousand words and you draw a great hard working fish. Thanks
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Old 08-22-2007, 11:48 AM   #15
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Laurencewill: Robert K. is a wealth of good knowledge properly applied. I bought his Rich Kid Smart Kid book for my oldest son...then had to fight the battle of making sure he still understood the value of an education. If only it were so easy as to "invent" the velcro wallet!
Well, glad to know your opinion on him, I think I'm clear on where you are coming from.
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Old 08-22-2007, 11:59 AM   #16
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Old 08-22-2007, 12:09 PM   #17
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Robert K. is a wealth of good knowledge properly applied.
Excellent! Thanks for the warning.
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Old 08-22-2007, 12:10 PM   #18
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I see the analogy is one a fear of the unknown. We all have whole areas of our lives that remain a mystery and we are happy leaving the details to others. Sometime we pay a premium for our ignorance and delegation, e.g. car mechanics, but the people in this financial DIY crowd have chosen to take on some of the responsibility for their own financial decisions, i.e. Vanguard/ETFs might be like changing a tire, whereas running a bond ladder or an active stock-picking portfolio might be akin to changing the oil and filters. Many choose not to do it because they perceive that it is not worth the bother.

Like any other endeavour, confidence comes from practice and experience.
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Old 08-22-2007, 01:09 PM   #19
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Andy, welcome to the board. I think you'll be a nice addition.

The lemming mass suicide story, though, is apocryphal: Snopes on Lemmings.

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Old 08-22-2007, 01:18 PM   #20
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I just had to make a trip to wiki:

Lemming - Wikipedia, the free encyclopedia
Quote:
Myths and Misconceptions

While many people believe that lemmings commit mass suicide when they migrate, this is not actually the case. Lemmings will often migrate in large groups and as a result some lemmings will occasionally be pushed off cliffs or drowned in bodies of water simply by the press of their compatriots, or by the dimension of the body of water. The myth of lemming mass suicide is long-standing and has been popularized by a number of factors. It is usually stated that the main source of the belief in the suicide myth was propagated by The Walt Disney Company documentary White Wilderness which includes footage of lemmings running head-long over a ledge. The filmmakers contrived this scene by forcing a number of lemmings off a cliff.[6]
Maybe they started that disclaimer ' No <fill in the blank> were harmed in the filming of this scene' AFTER 'White Wilderness' was released?

-ERD50


oops, sorry coach - we REALLY need that 'replies were posted while you blinked' feature back!
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