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Old 10-08-2014, 09:42 PM   #101
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However his client isn't Joe Investor. He's the forty something who has been maximizing his 401k for a decade but has chosen the cash equivalent account out of fear of a market crash. Unlike us he can Google Edelman and find a neutral Wiki page.

He can hear a radio show which while it has the hard sell for his firm it is not for some speciality product. He can see a series of books with user's reviews on Amazon.

For those who need their hands held by someone who is not just the friend of a friend he adds value and his clients are in a better place then they were on their own shaking in fear that the markets will crash
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Old 10-09-2014, 07:48 AM   #102
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For those who need their hands held by someone who is not just the friend of a friend he adds value and his clients are in a better place then they were on their own shaking in fear that the markets will crash
Yea, just like someone is better off joining a cult than being homeless, wandering the streets.
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Old 10-09-2014, 07:59 AM   #103
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Mainstream religions ask for 3.5 to 10 percent. 1.4 percent seems like a big bargain to me.
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Old 10-09-2014, 08:20 AM   #104
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Taiko.
You are still confusing his ability to market himself vs adding (net) value. He seems to be good at talking people into parking their investments with his company. That is marketing. He skims a portion off the top in fees... that is a value reducer... not a value adder. He apparently doesn't give enough advise to customers if they have to call into his show to get advise.

BTW - welcome to the forum. Please take the time post a bit about yourself in the "Hi I Am" section.
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Old 10-09-2014, 09:05 AM   #105
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Possibly this gentleman knows what he's talking about:

bogles-scary-math-shows-up-in-retirement-balances
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Old 10-09-2014, 09:12 AM   #106
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Some people need to be protected from themselves in which case having advisor helps. But I would be looking for under 1% fees.

If you are disciplined (you don't need to very smart) you will do quite well without any advisor.
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Old 10-09-2014, 12:17 PM   #107
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I think the biggest positive for Ric Edelman is that through his radio show and podcast(no commercials) he reaches millions of listeners and he MOTIVATES people too save and invest.
Not just invest with him but to just do it. NO excuses.

This website definitely motivates me even more.

He recommends low cost type investing with ETFs and low fee mutual funds and index funds.

Edelman doesn't push gold. Edelman doesn't sell crap insurance products like many annuities are. Edelman doesn't sell house flipping dreams or day trading software.Shares in oil drilling. etc.

His investing advice on his radio show seems solid and straightforward.

The BIG negative for Edelman is the 1.4% fee. Because in 2014 it is very easy now to do DIY with Fidelity or Schwab or Vanguard.

I will say these current market swings do freakout some people and they might benefit from someone else like Edelman controlling their portfolio trigger to avoid panic selling.

I will never use Edelman financial services and pay that fee. But I wouldn't mind reading one of his books or watching his PBS shows.

Edelman does seem to have a real passion to help motivate and inspire people to invest.

Thats all people. Not just his clients.
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Old 10-09-2014, 12:29 PM   #108
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Good Morning FIRE's. Always look forward to discussions and very much value people's feedback.

Planning on retiring 31 Dec 14. Somewhat scarey. High paying job, won't get back. Enjoy people, but not the stress, hrs. Impacting health. Take too much time from enjoying life. Think I can RE.

Met with Edelman associate yesterday. Actually thought our pension and SS could handle basic expenses. Their numbers not so rosey. I was counting on BIG reduction in taxes, no more retirement savings. Today re-calculating, just my post retirement living expenses not matching theirs. Hmm.

Anyway - real question here is. I l liked what I heard with regards to establishing a strategy and sticking the course thru rebalancing. We got a free copy of Lies about Money and had good portfolio guidance and how to allocate based on needs, timeline, risk amongst US Stocks, International Stocks, Bonds, and Hedge Positions.

They pushed for further diversification using large number of ETFs in different sub classes like Large Cap Value, Large Cap Growth, Small Cap, ... within US Stocks. Similar for International Stocks, Bonds, and Hedge Positions.

My question is - can a normal FIRE'er accomplish somewhat similar diversification using Vanguard mutual funds in the different classes or worth the 1.4% (approx) fee (ouch).

Appreciate anyone who has used/heard of Edelman or doing just that on their own. And did your taxes/expenses go down after retiring? Still can't figure their numbers.

Thank you FIRE'ers.

Kannon
Financial advisors tend to solve the problems they are paid for, as opposed to looking at situation comprehensively.


I would tackle your problem 3 ways, then blend the solution in the middle. Focus on core issues, then see if all combine into one solution.

Problem 1- what are your expenses. This has nothing to do with taxes, nothing to do with Pensions, SS etc.... Focus on your life- what do you want to accomplish, where will you live, and how much will it cost?

Create a budget here and focus on what you spend money on. Some things (like commuting expense and work wardrobe) might decrease. Some things, like travel or hobby expenses, might increase. Focus on how you spend money now, and what changes you would make if not working.


Problem 2: Income
List all your income sources. SS, Pension, Investments. Look at doing claim and suspend SS techniques, Investment techniques, Pension options. Put everything on the table. Examples"
a) Live off investments early and delay SS to age 70
b) take SS early and delay tapping into investments as long as you can
c) use a claim and suspend SS technique if possible (collect lower benefit on another person/spouse and delay larger benefit for self until age 70).
d) What Pension options exist (individual payout vs joint payout vs cash out)

Researching all these issues has nothing to do with how you spend the money, the focus is finding a high income stream with less risk, and making the money last as long as possible.

Problem 3. Retirement goals. What do you want to do with your time while you are not working?
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Old 10-09-2014, 01:10 PM   #109
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Great thread. I 've been reading books and will pick up on the suggestions here. When I was working I didn't have time or just wasn't focused on the fees. I have an Edward Jones advisor but was thinking about doing it myself.
Get away from Edward Jones as fast as possible. I am sure you have high cost funds and possibly an annuity product. If you don't I'm sure you are being worked on to buy one from them.
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Old 10-09-2014, 04:10 PM   #110
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Possibly this gentleman knows what he's talking about:

bogles-scary-math-shows-up-in-retirement-balances
A bit of bad news from that article:

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And, as Bogle explains, you can dramatically cut Wall Street's take by using index funds. About a third of investors do so now, and that number is likely to rise over time as people realize how awful a deal active management is for retirement savers.
If too many wise up and use only index funds what will happen to all those poor active managers and the people who sell their funds when they suddenly find themselves on unemployment?

And we won't see the sudden spikes and drops in the stock market. What a dull place the world would be then.

But I am confident that it won't happen. Too many people think they're smarter than the rest of the population.
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Old 10-09-2014, 05:04 PM   #111
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IMO, greed (on Edelman's part).

Geez, what happens if you end up up-side down, and need to move to keep your job? Not Ric's problem!

-ERD50
Actually, there is little difference between selling your house for less than you paid of it (cash purchase) and selling your house while you're upside down in a mortgage. In either case, you lose by the amount your selling price is less than what you paid.
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Old 10-09-2014, 05:12 PM   #112
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Actually, there is little difference between selling your house for less than you paid of it (cash purchase) and selling your house while you're upside down in a mortgage. In either case, you lose by the amount your selling price is less than what you paid.
But Edelman recommends people be maxed out on their mortgage and use the money to buy investments. I'm okay with that plan in many cases, but it is not for everyone. There can be a difference in "real life" if you have to sell (e.g. job relocation) but don't have cash to bring to closing. In that case, having a smaller mortgage could make the difference between moving and losing your job. Or, not having to borrow money for closing (at a time when you might need all your credit to buy a home in the new location).

Similar situation if all your money is in tIRAs. Or, to a far lesser degree, even in beaten-down equities.
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Old 10-09-2014, 05:23 PM   #113
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But Edelman recommends people be maxed out on their mortgage and use the money to buy investments. I'm okay with that plan in many cases, but it is not for everyone. There can be a difference in "real life" if you have to sell (e.g. job relocation) but don't have cash to bring to closing. In that case, having a smaller mortgage could make the difference between moving and losing your job. Or, not having to borrow money for closing (at a time when you might need all your credit to buy a home in the new location).

Similar situation if all your money is in tIRAs. Or, to a far lesser degree, even in beaten-down equities.
Errrr...... OK. Except I don't see the connection between your comments and mine. I was just pointing out that the perception of being "upside down in your mortgage" is usually overplayed. In terms of the real estate sale, it's no different than selling a house you paid cash for for less than you paid.

If you're dumb enough to complicate the matter by placing the money you didn't spend on the house in a postion where it's not available to pay the mortgage if necessary, then you deserve what you get. But that's an issue of being a dummy, not of having a mortgage.
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Old 10-10-2014, 04:15 AM   #114
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They pushed for further diversification using large number of ETFs in different sub classes like Large Cap Value, Large Cap Growth, Small Cap, ... within US Stocks. Similar for International Stocks, Bonds, and Hedge Positions.

My question is - can a normal FIRE'er accomplish somewhat similar diversification using Vanguard mutual funds in the different classes or worth the 1.4% (approx) fee (ouch).

Appreciate anyone who has used/heard of Edelman or doing just that on their own. And did your taxes/expenses go down after retiring? Still can't figure their numbers.
Owning THAT many ETF's starts to become a case of 6 or half a dozen. They all start to average out. Might as well own just 2 or 3 ETF's. VOO + AGG + maybe XVUS. Done! Then just rebalace.

1.4% is too much to simply rebalance and be your "behavioral coach" (just don't panic and abandon your allocation ratio). According to Vanguard this is what an adviser does. Once you're done picking low cost ETF's, a spending strategy and a ratio of bond VS stocks, you're basically done. What are you going to get for 1.4% each year??

I would use Rik for a ONE-time consultation only if you need help. Rik is definitely better than non-fiduciary product pushing salesmen. Avoid those guys like the plague!

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But Edelman recommends people be maxed out on their mortgage and use the money to buy investments. I'm okay with that plan in many cases, but it is not for everyone.
But he earns 1.4% per year BASED ON the value of your account! This is why you can never be certain of the advice you get from a fee-BASED adviser. I always say go to a fee-ONLY adviser if you want to be sure that conflict of interest has not polluted the advice that you are getting.
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Old 10-10-2014, 10:52 PM   #115
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He recommends low cost type investing with ETFs and low fee mutual funds and index funds.

Edelman doesn't push gold. Edelman doesn't sell crap insurance products like many annuities are. Edelman doesn't sell house flipping dreams or day trading software.Shares in oil drilling. etc.

His investing advice on his radio show seems solid and straightforward.
My biggest problem with his advice is the way he completely reversed himself after the 2008 unpleasantness. If you read his early books, he's all about managed funds with loads, and totally against passive investing. Then around 2008 he becomes a DFA FA, and suddenly it's all about low cost index investing. Although he does remain consistent on his message about finances being too complicated, time consuming, and important to be left to the individual. But if you read his "Truth About Money" books, then his "Lies About Money" books, you would never know it was the same guy.
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Old 10-10-2014, 11:06 PM   #116
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My biggest problem with his advice is the way he completely reversed himself after the 2008 unpleasantness. If you read his early books, he's all about managed funds with loads, and totally against passive investing. Then around 2008 he becomes a DFA FA, and suddenly it's all about low cost index investing. Although he does remain consistent on his message about finances being too complicated, time consuming, and important to be left to the individual. But if you read his "Truth About Money" books, then his "Lies About Money" books, you would never know it was the same guy.
Basically he is really good at marketing and building a business in the personal finance industry -- really good.

I won't mention any of the other big companies, but it's shocking how some of them build a name for themselves and draw an audience with do-it-yourself passive index investing strategies and then change their tune over time. Personal finance and wealth management is a very profitable business and the allure of it is too powerful for some.
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Old 10-11-2014, 01:27 AM   #117
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My biggest problem with his advice is the way he completely reversed himself after the 2008 unpleasantness. If you read his early books, he's all about managed funds with loads, and totally against passive investing. Then around 2008 he becomes a DFA FA, and suddenly it's all about low cost index investing. Although he does remain consistent on his message about finances being too complicated, time consuming, and important to be left to the individual. But if you read his "Truth About Money" books, then his "Lies About Money" books, you would never know it was the same guy.
Many investors have changed their investment style in the last 10 to 15 years.
I owned expensive Janus and Fidelity funds in the 90s and 2000s.

So Edelman isn't allowed to guide his clients to low cost ETFs and index funds because 10 years ago he used mutual funds like many other FAs did also.

The fact that Edelman has changed with the times is actually a reason to use him. He deserves credit for offering his clients what people use in this thread.

Hasn't Fidelity changed their investment products with the times also.

The whole brokerage industry has changed big time over the last 10 years.

I don't agree about Edelman saying investing is complicated. He says it is easy and encourages people to save in their 401ks or in a IRA.

I have never heard Edelman tell his radio listeners to call Edelman Financial because investing and saving is too difficult for the avg. person.
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Old 10-11-2014, 07:36 AM   #118
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Personal finance and wealth management is a very profitable business
Maybe, but don't forget that these folks have very high expenses that eat into their profit significantly. Below is a chart showing the typical annual budget for many financial advisers.
Attached Images
File Type: png smokemirrors.png (66.2 KB, 21 views)
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Old 10-13-2014, 03:45 AM   #119
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Although he does remain consistent on his message about finances being too complicated, time consuming, and important to be left to the individual.
On his radio show he says that "investing is easy, but if you need help call us."

As far as it being complicated, I think that part of his portfolio designing is intentionally complicated when it doesn't have to be. He'll have a large cap growth, a large cap value, a mid-cap growth, a mid-cap value, a small-cap growth, a small-cap value, etc. The average idiot gets confused by so many funds. But if Ric selected a simple Vanguard type 4-fund allocation then people would stop paying him 1 or 2 percent per year or whatever he charges. They'd realize that investing is easy.
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Old 10-15-2014, 03:57 PM   #120
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Edelman's books got me into investing but I've graduated to Vanguard DIY investing. Edelman intentionally obfuscates things to make you reliant on him and he unfairly attacks index funds. I strongly suggest taking three hours to read Bogle's "Common Sense on Mutual Funds" and hopefully you'll conclude that you don't need Edelman's very expensive help.


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