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Old 03-02-2012, 12:30 PM   #21
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So even after you showed her where she would have been if she had stayed in the single high ER fund compared to what you recommended she was still upset?
Don't try to bring rational thought into this discussion.
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Old 03-02-2012, 12:31 PM   #22
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Don't try to bring rational thought into this discussion.
Oh, right - I forgot - it was a MIL.

Everyone knows that SIL's can't do anything right.
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Old 03-02-2012, 12:31 PM   #23
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So even after you showed her where she would have been if she had stayed in the single high ER fund compared to what you recommended she was still upset?
Unfortunately, yes.
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Old 03-02-2012, 12:37 PM   #24
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Same experience as FIREd. A friend asked where to invest his money and gave him general diversified funds advice. He followed it but, when the market tanked, he blamed me. Since then, I'm much more careful with giving advice. I still do but mainly in LBYM talk.
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Old 03-02-2012, 12:41 PM   #25
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I've helped a SIL, managing her IRA, and will be going over the benefits of a friend because we're both in the same retirement system.

After being asked, I couldn't stand by knowing my SIL's broker had robbed her blind by buying her front-load mutual funds with >1% expense fees. Her husband retired on a medical disability and she was burnt out from job stress. I told her she could retire early, after they refinanced their 7.25% mortgage (meant working 3 months longer than she planned). They could have paid off the mortgage, but they wanted to hold onto the funds in case of an emergency.

My wife offered my help to our friend, since I've thoroughly researched our benefits. The plan is to go over her income sources and expenses and see if she's good to retire or not. I have no plans to invest her funds, other than giving her options to research and maybe a book or two to read.

Family and a few friends are about all I'd feel comfortable providing financial advice. Even then, it would be more bout giving them a direction versus them wandering around, not knowing where to start. Oh, and no investment tips, other than some index funds.
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Old 03-02-2012, 01:16 PM   #26
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I am a bit nicer, I offer to give the same level of advice that I give on the forum.
Which funds are better than others, the importance of asset allocation, and suggested books to read.

The way I figure it is if I have a question about subject which I am pretty ignorant say auto repair, or home improvement. I'll ask somebody who is knowledgeable for advice. They typically give me some pretty generic advice, mostly about things to watch out for. Sometimes a very specific advice get product A not B.

I never expect to come back and sue them if the advice isn't great, I just don't ask again.
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If someone asks for help & I think I have some help, I try to help.

I'm with you guys. I'm kind of shocked at some of the responses, don't friends try to help friends? If I knew that a friend of mine had specific expertise in an area, and he refused to even talk about some problem I was having in that area, I would question that 'friendship' (although the OP referred to these as 'colleagues', so maybe they are not 'friends'?).


I understand the reluctance of giving specific advice and then being (even if irrationally) held 'accountable'. But that isn't how I handle it. Much as clifp said, you lay out the basics - it's up to them to decide. You are just providing information, resources. If people talk about a 'hot fund' or a 'hot stock', you can mention how things go in cycles, and often what is hot today is cold tomorrow, then lead into basic AA, diversification, rebalancing, etc.


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Before I retired, I found that 100% of co-workers asking for financial advice wanted a stock tip that would act as a "magic bullet", allowing them to retire without making much effort. ....

Yep, that seems to be the way most people think, so problem solved!

-ERD50
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Old 03-02-2012, 01:41 PM   #27
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I'm with you guys. I'm kind of shocked at some of the responses, don't friends try to help friends? If I knew that a friend of mine had specific expertise in an area, and he refused to even talk about some problem I was having in that area, I would question that 'friendship' (although the OP referred to these as 'colleagues', so maybe they are not 'friends'?).


I understand the reluctance of giving specific advice and then being (even if irrationally) held 'accountable'. But that isn't how I handle it. Much as clifp said, you lay out the basics - it's up to them to decide. You are just providing information, resources. If people talk about a 'hot fund' or a 'hot stock', you can mention how things go in cycles, and often what is hot today is cold tomorrow, then lead into basic AA, diversification, rebalancing, etc.

-ERD50
The question was about giving financial advice to colleagues, and that is how I suspect most responded.


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So, a few colleagues have got wind of my imminent E(S)R departure here at MegaOrg. I'm mostly getting sympathy; presumably any jealousy is being kept under wraps.

What I'm also getting (2 cases so far) is veiled suggestions that people would like me to help them look at their finances and see if they can do the same.
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Old 03-02-2012, 01:41 PM   #28
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I used to offer friends/coworkers advice when asked. But they always asked for more. It was not only financial - it was everything that they needed advice on that they thought I knew something about. It got to the point where I didn't want to give advice anymore. Now I act confused when they question me, and the requests have stopped.
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Old 03-02-2012, 02:15 PM   #29
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+1.

I'm going to do my best to try to help people I like if they ask for my help. Obviously, it makes sense to be careful about expectations so that you don't end up getting blamed when the market goes down.


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Originally Posted by ERD50 View Post
I'm with you guys. I'm kind of shocked at some of the responses, don't friends try to help friends? If I knew that a friend of mine had specific expertise in an area, and he refused to even talk about some problem I was having in that area, I would question that 'friendship' (although the OP referred to these as 'colleagues', so maybe they are not 'friends'?).


I understand the reluctance of giving specific advice and then being (even if irrationally) held 'accountable'. But that isn't how I handle it. Much as clifp said, you lay out the basics - it's up to them to decide. You are just providing information, resources. If people talk about a 'hot fund' or a 'hot stock', you can mention how things go in cycles, and often what is hot today is cold tomorrow, then lead into basic AA, diversification, rebalancing, etc.

-ERD50
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Old 03-02-2012, 02:29 PM   #30
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Just go out and get yourself some E&O insurance for $2200 a year like I do and get licensed and you're set............
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Old 03-02-2012, 02:35 PM   #31
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I figure I can judge a person I know quickly as to whether they have the capacity to understand basic stuff like "spend less than you make, save the difference, and one day you will be wealthy". If the person is unlikely to be able to understand a concept like that, then it is not worthwhile getting involved in explaining incomprehensible concepts to them.

For those that have the capacity to understand, I can be vague enough to talk about what I do without really providing concrete advise as to what they should do. If they are really interested in drinking from my fount of knowledge I can let the waters flow more freely if they are receptive. I never make decisions for others, but rather say "you might want to develop a spreadsheet to calculate that and figure out which is a better option for yourself". Of course there are general things like Whole Life Insurance that can usually be dismissed as inappropriate without a lot of thought, but advice is presented as "accepted wisdom is that whole life is usually a worse deal than buying the term life you need and investing the rest. Keep your insurance and investments separate."
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Old 03-02-2012, 02:38 PM   #32
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Generalities for most, replacing budget costs with interest earned and expect an "event" annually (health, home repair, car replacement).

If I give anything, I usually just tell the ones who want to know what investments I make and I'll try to temper my success with a "loser" choice I make. Usually these are good friends who really understand the loss you may have with investing or retiring.

I also focus on staying debt free to take some pressure off in case of the "events". If you tell them you've been saving for 5-10 years AFTER becoming debt free, that throws water on 99% of their fires.
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Old 03-02-2012, 02:44 PM   #33
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Quote:
Originally Posted by W2R View Post
Before I retired, I found that 100% of co-workers asking for financial advice wanted a stock tip that would act as a "magic bullet", allowing them to retire without making much effort. They did not want to hear anything about LBYM, and would shut off their ears and mind if cutting back on spending was suggested.
In addition to my earlier response, my experience was like W2R's. Sadly they didn't want to learn anything, they just wanted a silver bullet, 'what's the trick.' Investing isn't rocket science, but it's definitely an area where (too) little information can be very dangerous. I watched employees do all the wrong things with their 401k's and then be beside themselves when the market tanked. Their knowledge was based on annual 401k lectures with Schwab trainers and earlier providers, and casual discussions with peers - which clearly proved to be too little information. As much as I would have liked to help them, I limited myself to nudging them in the right direction as my earlier post stated.

Bad advice on car repairs isn't in the same league as bad or incomplete investing advice. The first time someone sees their nest egg drop 25-50% can be pretty alarming to a newbie investor.

No good deed goes unpunished...
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Old 03-02-2012, 02:55 PM   #34
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Just go out and get yourself some E&O insurance for $2200 a year like I do and get licensed and you're set............
FD, is that about what E&O costs? Can you get it as a sole proprietor/small shop? I always figured it would be prohibitively expensive and unavailable, so I had mentally wiped the idea of hanging out a shingle away.
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Old 03-02-2012, 03:00 PM   #35
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when I have been asked I have recited the following:

read (from the library of course)
for living below your means and the real value of wage:
Your money or your life
The millionaire next door
Dave Ramsey if you are religious as he can turn people off
various money saving books such as Tightwad Gazette etc. for ideas

for investing:
the books mentioned here, ie. Bogle, Bernstein
I got my first education reading Money magazine

I also advise them to write down every dollar they spent so they knew how much eating out and clothing for example cost, and save up for stuff so you don't pay interest (we even saved up for cars) and negotiate the best deals. We often get free shipping and take away on appliances thrown in when we offer cash on the spot after doing our research.

That by far is the best advice I can give anybody as we all have different tolerances for stock/bond/cash ratios and some people won't invest in utilities that have Nukes for example. To each his own.

Of course their eyes glaze over before I get past the first round of books but they don't ask anymore.

What, no magic stock tip, no way to pick the winning lottery numbers? What good am I.

and don't laugh about the lottery numbers. I know quite a few people whose plan is to win the lottery to retire.
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Old 03-02-2012, 03:06 PM   #36
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Before I retired, I found that 100% of co-workers asking for financial advice wanted a stock tip that would act as a "magic bullet", allowing them to retire without making much effort. They did not want to hear anything about LBYM, and would shut off their ears and mind if cutting back on spending was suggested.

So, I usually just pushed the TSP and contributing the max if possible. They probably would have passed out had I mentioned that contributing to the TSP wasn't all they might have to do.
+1. I think many get fixated on if you are able to retire, it's mainly you got lucky in stocks, a big inheritance, or something else that made a big payday.

When explaining the concepts of LBYM, the need to budget, slow and steady (maxing out retirement accouts, Index and rebalance, start young, DCA) they almost get a look of disappointment on their faces.
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Old 03-02-2012, 03:18 PM   #37
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I do remember one conversation about retirement I had with a friend; however, I was the one who was picking her brain as she is an MBA and also the smartest, most financially pragmatic I have ever known.

Her advice was short and to the point. She referred me to a certain website .
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Old 03-02-2012, 03:27 PM   #38
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Her advice was short and to the point. She referred me to a certain website .
So what's the URL?
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Old 03-02-2012, 04:14 PM   #39
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When explaining the concepts of LBYM, the need to budget, slow and steady (maxing out retirement accouts, Index and rebalance, start young, DCA) they almost get a look of disappointment on their faces.
The only folks who questioned how we were able to plan for an early retirement were my DW's relations.

However, the suggestions you stated (which we followed) will not work for her relatives, who are the same age as us. They don't have enough time left to "catch up".

As for their kids (who are younger?) They have no interest.
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Old 03-02-2012, 04:51 PM   #40
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I mentioned a mutual fund to a friend once..than 10 years later she tells me how bad it is doing...but i had got out of the fund 8 year earlier.

So i with you it is not worth the responsability.
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