on the fence and can't decide when to get off

[midwestguy]

The guy from Edward jones has me buying individual bonds. Laddered short, medium and some long term. Lots of small bonds like 1-5k each. I bought some bond funds myself through Fidelity. Maybe 100k

My differed income is insured by a second insurance company should the company go broke so I feel its pretty safe.

[Another Reader]

Please consider getting out of Edward Jones. That guy is making a fortune off of you through fees and commissions. You are the first person I have ever encountered that has managed to accumulate a substantial amount of money using EJ. You can do much better with Fidelity, Vanguard and/or Schwab.

[BeachOrCity]

Considering your asset base 1-5K each sounds really small. When you buy individual bonds (or sell) they usually have a mark up and the brokers love to NOT tell you what the mark-up is.
I don't know, but suspect, you may be paying alot more in markup than you realize. There are a few brokers who don't hide the markup and just charge a commission. Vanguard is one.

You should ask your broker what the markup WAS on a few bonds he purchased for you. Double that for the round trip cost of owning the bond. COnsidering the yield of the bond, how much of your income is going to markup / AUM / commission? Its much higher for bonds than ETF's granted, but if the fees are eating too much of the yield you either need someone else who is cheaper, or do it yourself. Your broker rightly diversified your bonds, but 1K per bond? That sounds crazy to me.

[midwestguy]

yea Fisher guy scares me. My wife likes him but I think I can convince her that we need to stay away. He also told us that we have way to many mutual funds and they are all overlapping which is probably true.

[midwestguy]

Yea the bonds are individual ones mostly small amounts 1k to 5k. I think they mostly short and medium term type.

The Fisher guy scares me but my wife likes him. I think I can convince her to stay away.

thanks

[pb4uski]

I agree... stay away from Fisher.... for one thing to say that your portfolio is too large for mutual funds/ETFs is stupid.... but also stay away from Eddie. You can easily do this yourself and save a bundle... it is not rocket science.

On the bonds, one interesting bond alternative that is in-between a bond fund and individual bonds are target maturity ETFs. Basically, you are buying a share of a diversified bond portfolio that matures in a given year. Blackrock and Guggenheim both offer corporate, high-yield and muni versions that mature in 1-10 years. A good portion of my bond allocation is in these.

https://www.ishares.com/us/strategies/ibonds
https://www.guggenheiminvestments.co...#u_ProductList

[midwestguy]

I'm sure the Ed Jones guy marks up the bonds. The Fisher guy pointed that out. I have $1700k in various Jones accounts but I believe I only pay a commission when I purchase stocks or bonds. I don't think I pay a yearly fee? At the time I needed help (before finding this forum) and they did help me diversify my portfolio somewhat.

Fisher charges something like 1.25% for all money they manage. No trade fees. but like I said I am staying away from these guys.

I believe I can purchase individual bonds in my Fidelity account as well. I have not heard of the target maturity ETFs for bonds. I will have to look into this.

[MRG]

Quote:

Originally Posted by midwestguy I'm sure the Ed Jones guy marks up the bonds. The Fisher guy pointed that out. I have $1700k in various Jones accounts but I believe I only pay a commission when I purchase stocks or bonds. I don't think I pay a yearly fee? At the time I needed help (before finding this forum) and they did help me diversify my portfolio somewhat. Fisher charges something like 1.25% for all money they manage. No trade fees. but like I said I am staying away from these guys. I believe I can purchase individual bonds in my Fidelity account as well. I have not heard of the target maturity ETFs for bonds. I will have to look into this.

You know you can have Vanguard do all that for .3%?

They'd be acting as a fiduciary for you, instead of the ones from fisher and jones being a fiduciary for themselves.

[Luck_Club]

Quote:

Originally Posted by midwestguy Hobbies. Mostly working. Most of my friends are at work. Outside of work, mostly working on my properties. Questions 1. Can I retire with the current spending habits (15k/month)? I also would like to leave my children money, ideally $2000k each ($6000k total) What would my spending need to get to in order to accomplish the this or is it unrealistic? 2. Should I retire? I seem to get board being on vacation for more than a week. All of our friends are working. Most of them will move out of the area when they retire. I am thinking either after May bonus or possibly in 18 months. 3. Do we have the appropriate asset mix? 4. When should we take social security? Will the differed income of approximately 75K/year affect this? Thanks in advance for any help. I know there is a lot of knowledge in this forum.

You got the bucks to quit no question. It is really really hard to walk away from easy money of that level.

With the family longevity and lack of outside work interests, there isn't much incentive to leave. Then if you look at the money they are paying you; you would be giving up a nearly 5% return on your portfolio on the table. 400K divided by 7.5 million.

So do what most corporations due to older workers and force them out, chances are at your level they will give a package to keep you from going to the competition.

[Doc0]

I think you have a great portfolio which is poorly managed. I see little in the way of tax planning and a pretty much hodge podge. Not to be critical of you because I've been there.

I would stay away from Fisher. What they seem to sell is "come with us and you'll be swimming with the BIG BOYS! I'm neither impressed with your nickle and dimer Edward Jones joker err broker. What I did was read some books till I found an author who matched my investment strategy. My strategy is based around efficient frontier and modern portfolio theory. I contacted the author who is an investment advisor as well and put some money with him, $1M and he invested the million according to the MPT tenents. About ten minutes after that the market blew up. But since MPT takes volatility into account that million went down about 30% less than my S&P funds over the same period and was back to zero a couple years faster than the S&P recovered. The other thing he did was to order my entire portfolio even he funds the was not managing in a aggregator (Black Diamond Reporting) so I could actually understand what my portfolio was doing. My money is warehoused at Fidelity and Vanguard. He is strictly paid a yearly percentage and is not a salesman for fund companies. I'm at Vanguard because of Admiral Bond funds for example. After a while I could see the MPT portfolio's advantage and invested the whole shootin match with him. All of the money remains in my control since he sells me advice at a fixed percent 0.5% for my particular portfolio size. He also provides me some insurance in case I kick the bucket. My retirement withdrawal plan extends well into he future and takes into account things like RMD and when to take SS and when my wife should take SS. If I go she will have continuity regarding how our future is funded, and my kids are also included in the plan. So that 0.5% buys me portfolio efficiency, tax efficiency, and continuity. He doesn't sell me marked up bonds, I go to Vanguard and buy my own damn bonds based on his allocation. If I don't like his advice I can argue my point and do what I want. Thing is he usually is right.

He also took my tax situation into account and helped me develop an effective tax plan for retirement. He wrote a book on that as well, "The Overtaxed Investor" available at Amazon. He reviews my portfolio quarterly, helps me tax loss harvest and is a phone call away if I have a question. I'm interested in some of the esoteric points of investment and he is a wealth of information of where to look and what to read, that is beyond some "money magazine" level of information.

There is plenty to do in retirement. What you buy back in retirement is your time and that's not trivial. I FIRE'd twice. Once in 2010 and again this year. In 2010 a business opportunity fell into my lap and I decided to take it, sold it out in 2014, contracted to continue running it till earlier this year. I looked at my SS earnings statement this year and realized I already made all the money and continuing working was just gilding the lily, so once I maxed out SS for his year I quit. It's very liberating and stress reducing. Pick a day make a plan and talley ho'

[midwestguy]

Thanks for the advice. I am certainly not offended and agree with your opinion . I will have to read the book. Sounds interesting. Will look it up. I pay lots in taxes and anything should help.

Agree with everyone about Fisher. They sell hard and they are very persistence.

I have no idea what I pay Jones but I pay by the trade and I’m sure they are warehousing these bonds and making money on them. The guy is very friendly and my wife trusts him. He has helped with some direction but I’m sure I can do better.

I made an appointment with Vanguards online financial advisory service which MRH suggested. They charge 0.3% of money invested with them. Their service is on the phone but I really don’t need anyone coming out to my house. Vanguard as everyone points out has good low fee ETFs and mutual funds.

Again thanks

[nwsteve]

You mention you already have a Fidelity account--with your investments it should not be hard to have a million there and get their Private Client status. In Chicago, you have several brick and mortar offices you can use if you prefer a face-to-face service. You get a dedicated advisor who is usually a CFP as well as the Fidelity amazing tools. Have you run your situation through their Retirement Income Planner? Besides FireCalc, many posters consider it their go-to retirement planning tool.
Can't speak for all Private Client advisors, but all of mine have been able to do everything and more (and at a LOT lower price) than either of the guys you are talking to. Fido has an awesome bond desk and it is easy to trade bonds on-line at little cost.
As a side thought, you may want to take some of your under utilized time at work and use it to do some comparison of the options most used here--Fido, Vanguard, Schwab come to mind.
The good news you have a lot of options you can choose from.

[Brat]

I second the recommendation of Fidelity's bond department. My Mother had a bunch of bonds retire and wanted to replace them. The local Fidelity CFP called their bond desk in Boston, spoke for a couple minutes with a gal then handed the phone to me. The representative in Boston warned us off mortgage derivatives a good year before they imploded.

Also Fidelity's fee for buying individual bonds was reasonable.