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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-03-2005, 11:54 PM   #21
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Re: CONFUSED BUT TRYING TO UNDERSTAND

I looked up HSSAX on msn moneycentral. It is a specialty fund, financial. They show the fund as being 99.8% in financial services stock.

1.74% Expense Ratio. But its returns in the 2000 through 2002 bear market were super! Whether that was just a one-time nicely uncorrelated performance vs. S&P 500 or not remains to be seen, but it sure looked great then. As to performance this year, this isn't much of an up year across the board for domestic stocks so far anyway.

American Funds - I think that American Funds purchased through an employers 401k plan DO NOT have an up-front sales charge.

If purchased on your own via an American Funds dealer, the sales charge % is a sliding scale inversely proportional to the amount of dollars invested. For larger stakeholders, the rights of accumulation and letter of intent pull down the %.
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-04-2005, 12:15 PM   #22
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Re: CONFUSED BUT TRYING TO UNDERSTAND

Ok, I think I am starting to slowly understand some things. But there are a few questions that I have??
1. I was told that the expense ratio was the yearly commission that was charged by the broker on the mutual funds that you have?? In my case anywhere from .45% to
1.75%! I know about the up front charge on the loaded funds, usually around 5% or so, but I was not aware that in a 401K that the fee is usuall waived. This is a good thing to know and probably saved me money that I wasn't even aware of!!!
2. Was also told that stocks that pay dividens may be a better way to go on new money??I have never dealt with stocks, although our shop guy here deals in the penny stocks and seems that he has done pretty good the past couple of years but as he says, "just by dumb luck".
As one poster has mentioned, save as much as I can between now and 8 to 10 years. I have found that if you can keep "cash" out of your hands, the better off you are. And like the 401K, if you don't see it, you don't miss it as much, and you learn to live within your current take home pay. So I need to create a budget and persuade my wife to follow it as closely as possible. She's pretty frugal until it comes to the kids and grandkids- I've had to curtail her spending - especially at Christmas time. Usually we just buy something that we both can use now instead of the multitude of clothes & stuff that ends up in a closet or the garage to collect dust.
3. So, this has given me a little spark to "get with the program". I do appreciate all the advice and help from everyone so far.
By the way, I have thought about buying and refurbishing houses. My wife is super at colors and decorating. But, I don't know if the gamble is worth it at this point. Its a little hard sometimes to get support from the "little woman", especially if things don't work out - I'm sure some of you know what I mean I can deal with ridicule with most everyone until it comes from the one you live with!! I hate the "I told you so"!! Sometimes I still can hear the ringing in my ears years later!! Anyone out there have the same dilema? Has anyone overcome this obstacle lately? She doesn't deal with the investments, she lets that up to me and won't even try to understand-unless the bottom falls out-then I'll probably hear from her!! Other than that all is well in New Castle - Fireworks Capital of America! Thats about all we're famous for I believe, other than the usual corruption of town politics.
Later.
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-04-2005, 01:07 PM   #23
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Re: CONFUSED BUT TRYING TO UNDERSTAND

Quote:
Originally Posted by AJL
I can deal with ridicule with most everyone until it comes from the one you live with!! I hate the "I told you so"!! Sometimes I still can hear the ringing in my ears years later!! Anyone out there have the same dilema? Has anyone overcome this obstacle lately? She doesn't deal with the investments, she lets that up to me and won't even try to understand-unless the bottom falls out-then I'll probably hear from her!!
Yes, it's bad enough knowing that you messed up without having your face rubbed in it.* If she say's she told you so, I suggest replying with something along the lines of "Yes, I made a mistake.* I'm only human.* How would you like it if I pointed out every mistake you made?"* I did this with my wife once.* She doesn't say she told me so anymore.
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-04-2005, 04:00 PM   #24
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Re: CONFUSED BUT TRYING TO UNDERSTAND

Quote:
Originally Posted by AJL
I hate the "I told you so"!!
If she's made the decision to have you handle everything financial, then she's given her explicit approval to whatever you do and has zero cause to complain. Not that pointing that out always helps.

Do you have a contractors license? It might be worth your time to get one, since there seems to be a shortage of them. Here in San Francisco I needed an electrician for a service upgrade, and I was able to get two guys to come out, but only got a bid from one of them. And that bid probably turned out to be one of those "I really don't want to do this so I'll quote high" deals. Even at that, it took the electrician 5 days over a period of 3 months to do the work.

If you can do quality work on time without stringing people along you'll probably become wealthy just from that.

cheers,
Michael
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-04-2005, 04:54 PM   #25
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Re: CONFUSED BUT TRYING TO UNDERSTAND

Quote:
Originally Posted by modhatter
I am not an expert by any means, but I will tell you straight that it is unlikely that you will be able to increase your current portfolio to a degree necessary to live comfortably.* Without continuing to contribute to your plan, you would probobly be lucky to double your current $70K.* No one is expecting great things from the market at this time, nor in the next 10 years.* However, if you could continue to agressively save & put in money monthly, maybe you could get it up to $300,000 by then.* That is not a whole lot to try and live off of, but it certainly would imporve your lifestyle over trying to live off social security.* *So it is very important* that you give it your best shot.*

It is also VERY important that you cut your spending down to absolute minimum and sock away every cent you can put your hands on.

Is your current portfolio growing ?* If not perhaps you should consider making some changes.* If you want to post the funds that you currently have in your portfolio, then I know some of the more experienced people on the board will comment on them and give you some good advice.

I lean towards high paying dividend stocks.* I don't know if you know what I'm talking about.* I think they are particularly good in troubled times.* So perhaps you might consider this for future contributions.* There are books on the subject.* One very easy read is by Ben Stein called "yes, you can Be a Successful Income Investor"

It touches on the best way to derive income to live on as well as grow your portfolio.

Second, I agree with the above poster.* You can also call your Social Security office and request a Soc. Sec. income statement that will show you what you might receive from Soc. Sec. if your present income remains the same until you reach retirement age.

I would not even consider retireing at 62.* You will lose quite a bit of your social security income.* You should probobly wait until your 66 yrs. old or what ever it is for your current birth date.* Second, I'd start thinking about possibly relocating to somewhere that it is cheaper to live.* We don't know where you live, so it is hard to comment on this.* Do you own a home or do you rent?* I'm talking about moving if you retire, depending on where you live now.* Whey don't you go ahead and post the finds you currently have, and let the others give their two cents.
This is a good post, but I would suggest taking the SS at 62
and starting now to plan for it, using 62 as a target. You can do a lot in 5 years, and by moving/downsizing should be just fine. A disclaimer:
I am heavily biased toward "doing it now". Waiting until 66 just is not
in my bag of tricks. 66 may never come (62 either for that matter).
This morning I called a couple of old business associates just to chat
and catch up.
One just had major surgery and is going back in for more. Another
was dead. I would be retired at 62 even if I was starting with
-0- at age 57. But, that's just me.

JG
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-04-2005, 08:47 PM   #26
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Re: CONFUSED BUT TRYING TO UNDERSTAND

Seems to me, about 10 years ago that statistics were stated that approx. 35% of americans do not reach the retirement age?? Good point then trying to retire before either death sneaks up on you or your health gives way. Being the son of a coal miner (hand loaded for 25+ years), I saw the man I always thought invincible, muscle on muscle with hands of steel, slowly turn into a fragile shell of a person. The only saving grace was that he was eligible for black lung benefits along with social security!! Some others were not so lucky, striving to exist every day on next to nothing, making $300 dollars last the whole month (remember the hard cheese that you used to get from surplus food?, and the powdered milk?) The good old days - haven't yet figured out why they called them "good"?. I really don't mind working for a living, its just the fact that I think when one wakes up in the morning that it would be nice to "choose" not to go in to work if you don't want to!! And - not to "have" to listen to someone tell you "what to do"!! Some days its all I can do to curb by tongue or walk out, but I usually regain my senses and tell myself that I must keep a positive attitude. By the way, I did come across an article where a woman posted a message for people to send her money so she could retire. Most people responded in the negative and told her to "get a job you lazy bum"!! But you know, there were a bunch of people that actually sent her money on that scam!!!! Only in America!!
ummmmmh! If 5000 persons sent me $100 dollars each, I could retire tomorrow and I would send you all postcards from Mexico!! Oh, that was last night's dream I had!! Sorry.
Anyway, back to reality. I'm going to take a little advice from everyone and put some of these ideas to work this week!!
ps: I told Greg, our shop guy about this web site and when I mentioned early retirement he replied-"I like the sound of this already!!!" So I think I may have him hooked also. He's 53 and the "penny stock king" here!! And thanks for reinforcing my mutual fund picks so far, I hope they continue doing well and hope that all of you are doing well also. Right now I have my nose to the glass watching all of you "living the good life" on the other side. Thanks again.
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Re: CONFUSED BUT TRYING TO UNDERSTAND
Old 10-07-2005, 01:57 PM   #27
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Re: CONFUSED BUT TRYING TO UNDERSTAND

AJL,

The majority of my portfolio is in American Funds such as those you mentioned: agthx, awshx, anwpx. They all look pretty good. The biggest thing you should look at when evaluating a mutual fund is the expense ratio, sometimes abbreviated ER. You can find these ER's for these funds at finance.yahoo.com or morningstar.com or at the fund's own website (americanfunds.com). For example, agthx has an ER of 0.70%. That means for a $10,000 investment in agthx, the fund will pay $70 per year in fees. The 12b-1 fee is a part of the ER, and is 0.25% for agthx. The 12b-1 fee compensates your financial adviser each year. On that $10,000 investment, your adviser gets $25/yr. American Funds also has a front end load of up to 5.75% when you buy their funds. Your advisor has a vested interest in recommending funds that will compensate him. A company like Vanguard (highly admired here) charges no front end sales load and does not charge a 12b-1 fee. The usual expense ratio at Vanguard is more like 0.2-0.4% for many of their funds.

I can't recall whether it was John Bogle or William Bernstein (both highly admired here) that said American Funds was a good fund company if you're going to go with actively managed load funds.

After reading a number of books on investment strategy by Bernstein and Bogle, I decided it was time to switch to Vanguard. They have been easy to work with.

I'd recommend reading up - I'd recommend Four Pillars of Investing and the more complicated Intelligent Asset Allocator both by William Bernstein. Common Sense on Mutual Funds by John Bogle is also a good read. You'll see some overlap in those three books, so skimming may be appropriate for some parts. I checked all three out from the library or through the library's interlibrary loan program. Or buy them at Amazon.com or somewhere online. I'd say the $50 you'd spend on all three would be a great investment if you can't get them free from the library.

The Millionaire Next Door by Thomas J. Stanley and William D. Danko will give you some insight and motivation into getting wealthier. It may also provide for interesting material to discuss with your wife regarding saving money and budgeting.

It looks like you know some about the stock market and investing. And you have accumulating a significant amount, and you are continuing to fund your IRA's on an ongoing basis. That is a great start.

Other than that, I'd second many of the earlier posters here. Good luck, and remember you still have a number of years to invest. Between social security, odd jobs, and investment income, you should do ok during retirement. It won't be "early" necessarily, but better late than never, as they say.
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