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10 Things Rich People Do Better
Old 07-03-2014, 07:25 AM   #1
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10 Things Rich People Do Better

Interesting article, which I forwarded to my kids:

10 things rich people do better than you - MarketWatch

This got me thinking: Am I/we rich? Are you rich? By the standards of the rest of the US population, yes, I guess I am. But I don't feel like it. Not sure how much I'd need to consider myself rich. We now have 2x more saved that we thought we'd need, and I'm still not comfortable, even though FireCalc says we're good to go. I need to let this soak in a while, I guess.
And, this from the article was also about the only thing I sort-of took exception with:

Quote:
The best way to protect yourself and get a step up on your financial goals is to first invest in a team of financial professionals. This means hiring a qualified and experienced financial adviser, accountant and in complex cases, an estate planner. Yes, working with pros will cost you, and you can still do some DIY investing, but their objectivity, expertise, personalized guidance and ongoing monitoring can be well worth it (and relieve you of the huge burden of figuring it all out on your own).
We do have a FEE-ONLY financial adviser, who we paid <$2K for our initial consultantion and evaluation. It was well worth it. I can get a periodic tune-up for $400 - that would include rebalance suggestions, etc. The rest is up to me. To me this article seemed to imply more is better. As always, YMMV. Mine sure does.
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Old 07-03-2014, 07:46 AM   #2
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Boy is this the wrong forum to post that.

".. their objectivity, expertise, personalized guidance and ongoing monitoring can be well worth it (and relieve you of the huge burden of figuring it all out on your own)"

I'd rewrite that:

".. their warped incentives, ineptitude, off the shelf guidance and yearly statements monitoring are likely not worth it (and relieve you of the huge burden of your hard earned wealth)"

If havenot yet seen a single financial advisor worth his money, and I have seen alot of them from many different institutions. Never dealt with vanguard though.

The bar of excellence is basically getting one that is nice to you, and stops you from buying into random IPOs and dodgy stock schemes. That'll cost you 1% of your wealth please.

A personal fitness trainer can do job that for much cheaper, and get you into excellent shape as a nice side benefit.

Edit: I just saw that the article is written by a financial advisor. Well color me surprised.
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Old 07-03-2014, 07:58 AM   #3
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Edit: I just saw that the article is written by a financial advisor. Well color me surprised.
Yeah, I was just going to point that out too. The other points were pretty good, though no secret to most of us.
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Old 07-03-2014, 08:12 AM   #4
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We do have a FEE-ONLY financial adviser, who we paid <$2K for our initial consultantion and evaluation. It was well worth it.
You could have saved the $2,000 and been worth even more by using something like, for example, https://portfolio.money.cnn.com.
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Old 07-03-2014, 08:20 AM   #5
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You could have saved the $2,000 and been worth even more by using something like, for example, https://portfolio.money.cnn.com.
That is of course only your opinion and YMMV. I for one am also grateful to have used a fee only planner. There are many paths...
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Old 07-03-2014, 08:22 AM   #6
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You could have saved the $2,000 and been worth even more by using something like, for example, https://portfolio.money.cnn.com.
As I said, YMMV. To me, it was money well spent, and I've wasted that much (and more) on far worse things. We got a large lump sum when DH's plan was terminated, and at that time I really needed some unbiased advice. I get ZERO input from him, so it's nice to have someone to bounce ideas, questions, concepts, etc., off of.
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Old 07-03-2014, 09:20 AM   #7
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I think the advice in the article is mostly true but painfully obvious, like 99% of the mainstream articles on personal finance. I find it interesting that they'd post a picture of a McMansion at the beginning to represent rich, even though we all know that overspending on a house is one surefire way not to become "rich".

On the definition of rich, I'll answer it the same way I responded to my young daughter who had asked whether we are rich. I said, yes, we're rich in love and that's all that matters.
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Old 07-03-2014, 10:06 AM   #8
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These are the behaviors that got most of us (making $50K to $200K in todays dollars) to NWs of $1 to $5 million. Most of us are "comfortable", but few of us embrace the term "rich" or "wealthy." I realize a lot of this is "perspective." Still, that's my big quibble with the article. I think most people with average or above j*bs could get to this place in an average w*rking life time (or less) by LBYM and couch-potato investing.

Getting (what I would call rich) usually involves more than just managing "decent" wages over a life time. Owning a business is the most likely path to something approaching "rich". We could argue all day about this (and have spent days in the past, heh, heh.) So let's just say YMMV.
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Old 07-03-2014, 10:18 AM   #9
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Regarding having a financial adviser, I agree that it is not worth it.

After all, I don't need a financial adviser so why should anybody else? And if having the FA works for somebody else then it must be because they are stupid or morally deficient in some way. Gosh Dang It! Do it my way because my way works for me. Why is that so hard to understand?

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Old 07-03-2014, 10:26 AM   #10
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Regarding having a financial adviser, I agree that it is not worth it.

After all, I don't need a financial adviser so why should anybody else? And if having the FA works for somebody else then it must be because they are stupid or morally deficient in some way. Gosh Dang It! Do it my way because my way works for me. Why is that so hard to understand?

Heresy.
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Old 07-03-2014, 10:33 AM   #11
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Heresy.
Note: if this word had been invented by a man it would have been "hisesy".
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Old 07-03-2014, 10:39 AM   #12
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The ten things rich people do better are listed as,
1. Start early
2. Automate
3. Maximize contributions
4. Never carry credit card balances
5. Live like you’re poor
6. Avoid temptation
7. Be goal-oriented
8. Get educated
9. Diversify your portfolio
10. Spend money to make money

All of these are only in relation to LBYM or investing practices. For example, "Get educated" was described as getting educated about investing.

I guess this list proves that I am not rich. I knew it! That makes sense to me. I need to acquire a lower class New Orleans "yat" accent, I suppose, to be consistent.

I admit it - - numbers 1 and 10 do not apply to me at all. I started late and lived off less than 25% of my earnings to make up for it, and also invested heavily right after two market crashes. I am a DIY investor.
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Old 07-03-2014, 10:45 AM   #13
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With the vast amount of information available today I fail to see the need for a FA. However there are also a lot of people that would not want to spend the amount of time I have researching the subject. As largely a passive indexer I spend way more time than required to manage my investments. However it's fun for me. But I don't believe the majority of the population feels this way.
Furthermore I have friends who state that they can make more money in their profession per hour than what they could save by taking the DIY route. Probably true but I'm not in that boat. As I'm firmly committed to my ER glidepath, my salary is steady as my hours of work decline. I feel it is important to give my younger colleagues a chance to shine while I slip into the shadows. That leaves plenty of time to manage the other aspects of my life, including improving my health and financial security.
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Old 07-03-2014, 03:16 PM   #14
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I currently use a FA and pay .75% which was negotiated down from the standard 1% rate. DW and I retired last year and I have been working towards switching to DIY in short order now that the dust has settled from having RE'd, sold our home and moved out of the country. Now that I'm almost ready to pull the trigger I read this article today.

Fidelity Bans U.S. Investors Overseas From Buying Mutual Funds

And in reading the article, it's not just Fidelity either.

Looks like some of us may have to keep our FA after all.
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Old 07-03-2014, 04:19 PM   #15
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I currently use a FA and pay .75% which was negotiated down from the standard 1% rate. DW and I retired last year and I have been working towards switching to DIY in short order now that the dust has settled from having RE'd, sold our home and moved out of the country. Now that I'm almost ready to pull the trigger I read this article today.

Fidelity Bans U.S. Investors Overseas From Buying Mutual Funds

And in reading the article, it's not just Fidelity either.

Looks like some of us may have to keep our FA after all.
Thanks for posting the link. I am going to have to digest what that means for our future plans. It is interesting that big businesses have many free trade agreements and yet the small American investor who lives overseas has a hard time even finding a bank or brokerage house to work with.
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Old 07-04-2014, 07:27 AM   #16
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The one thing I found necessary was to pay a lawyer to help develop and write a trust that included a will and how I wanted to be cared for in my last days.

After a few years of LBYM and investing I did use a free service to develop a plan with suggested investment options from a FA that was associated with a well known radio personality. However, he said I was in great shape already and the alternative investments suggested carried loads and high fees. He was honest enough to not push me to become a client.

Early on I did make a few bad investment choices but not too devastating so I figure that was my tuition for a life lesson.

Instead of hiring a FA etc. a better choice might be to take a class or two on personal finance and investing in a nearby adult education class at a local high school, community college, college, or university. In my area a state supported community college offers 3 credit college classes for about $325. For anyone over 60 the classes are free.

Cheers!
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Old 07-04-2014, 07:56 AM   #17
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I saw a "Free" FA yesterday @brokerage house and got the standard 5 pie charts on type of portfolio and "Jelly Bean" chart of which investment did the best through the worst in each year that they show everyone. It seem they are still using the same strategies year after year. Only good thing is that they ran their MC and standard planning calculators and told me I was fine with a fully funded retirement.

As for the OP post, I did some, but started late, but maxed out investments, and never gave into the panic selling when I decided to RE.
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