Edelman vs Do It Alone

[purplesky]

Good point. Think how many heroin addicts there are. Must be a good product.

Think how many Americans don't save for retirement.

25,000 investors save with Edelman.
You can rip on Edelman all you want. I don't care.

I am just happy that these 25,000 people are saving for retirement and probably not doing heroin.

 

[World Traveler]

Think how many Americans don't save for retirement.

25,000 investors save with Edelman.
You can rip on Edelman all you want. I don't care.

I am just happy that these 25,000 people are saving for retirement and probably not doing heroin.

That's the bad thing about today's environment. I hope I can convince my kids they have to save and invest.

 

[ripper1]

1.4%!!! Holy dogfarts! Run. They are trying to scare you into paying TEN TIMES what a low cost index portfolio will cost you. This stuff is not rocket science. If you were able to accumulate that kind of money through your own efforts, you will be able to figure out the 4th grade math necessary to manage it yourself.

The guy has a regular radio show on the weekend and his advice is solid as far as I am concerned but his fees are a bit high. I agree with Brewer here though and you can find a low cost portfolio with index funds at a Vanguard.

 

[travelover]

Think how many Americans don't save for retirement.

25,000 investors save with Edelman.
You can rip on Edelman all you want. I don't care. ...........

We get it. You drank the Kool Aid and liked it. I'm not buying it.

 

[Walt34]

I know several married couples that stress over saving and investing because they dont agree on how to invest it. So they use a FA at Fidelity.

I'll concede that's probably cheaper than a divorce.

 

[samclem]

Those pirates over at USPA/IRA (then "First Command", and maybe rebranded as something else by now) preyed on military personnel for years with high cost products and tremendous front end loads and fees. There were plenty of retired senior NCOs and retired officers who participated in the fleecing of junior folks. It was an outrage, but there were some people who at least did get the idea of saving as a result of this, and they are probably better off than if this outfit had never existed. That doesn't mean that it is an honorable business or a net "plus" to society.
I think Edelman is better than that crew (which isn't saying much), and provides the handholding that some people need. But it comes at a tremendous cost, and others do provide the same thing at much lower rates.
I'd list Rick Ferri among the "good guys," too. He's written lots of books on how to do your own investing, and he shares his knowledge and reserch online for use by DIYs. If you want, he'll do it for you for a fee of .37% per year, but he never pretends he's doing anything that clients can't do for themselves.
On the positive side--Edelman runs a long radio show on the AM news station in my town, so I guess he's helping to keep that radio station in business, which is good for me.

 

[Ronstar]

His radio show is carried in my area also. I stopped listening to him when he advised listeners to have a large mortgage. May be ok for some but not for me.


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[World Traveler]

Those pirates over at USPA/IRA (then "First Command", and maybe rebranded as something else by now) preyed on military personnel for years with high cost products and tremendous front end loads and fees. There were plenty of retired senior NCOs and retired officers who participated in the fleecing of junior folks. It was an outrage, but there were some people who at least did get the idea of saving as a result of this, and they are probably better off than if this outfit had never existed. That doesn't mean that it is an honorable business or a net "plus" to society.
I think Edelman is better than that crew (which isn't saying much), and provides the handholding that some people need. But it comes at a tremendous cost, and others do provide the same thing at much lower rates.
I'd list Rick Ferri among the "good guys," too. He's written lots of books on how to do your own investing, and he shares his knowledge and reserch online for use by DIYs. If you want, he'll do it for you for a fee of .37% per year, but he never pretends he's doing anything that clients can't do for themselves.
On the positive side--Edelman runs a long radio show on the AM news station in my town, so I guess he's helping to keep that radio station in business, which is good for me.

Yeah I remember the USPA seminar I didn't buy into it. I didn't have a problem with it but it was definitely a sell job. What I didn't like was the "lets get our families together" only to get the Amway pitch.

 

[purplesky]

We get it. You drank the Kool Aid and liked it. I'm not buying it.

Ric Edelman has a good radio show. He gives solid advice and often tells his listeners that investing is not hard. He encourages DIY for people who want to go that route.

So why do you have such a problem with him. He helps people invest and save for retirement. Thats a good thing.

His investors are still going to build wealth even with that fee.

 

[brewer12345]

1.4%. That is reason enough to start throwing poop.

 

[purplesky]

His radio show is carried in my area also. I stopped listening to him when he advised listeners to have a large mortgage. May be ok for some but not for me.


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What was Edelman's reasoning for having a large mortgage.

 

[purplesky]

1.4%. That is reason enough to start throwing poop.

Not saving anything for retirement is more of a reason to throw poop than paying Edelman 1.4% to build a nice portfolio.

 

[ERD50]

What was Edelman's reasoning for having a large mortgage.

IMO, greed (on Edelman's part).

If you took out a large mortgage, you had more money to invest with him, and he made 1.4% on that extra amount. Good for him, risky for you - but he didn't appear to care about that. At least not as much as his 1.4%.

And this is coming from someone who has no problem holding a low rate mortgage in retirement, but Edelman was talking big mortgage, and refinancing every time your equity increased. Geez, what happens if you end up up-side down, and need to move to keep your job? Not Ric's problem!

-ERD50

 

[Animorph]

Not saving anything for retirement is more of a reason to throw poop than paying Edelman 1.4% to build a nice portfolio.

Someone who charges 1.4% does not have the client's best interest in mind. They're just lining their own pocket, unless they're sending out really nice birthday cards. 1% is common, and you can easily find much cheaper services.

On the other hand if someone introduced themselves by saying they had no pension, no retirement savings, and wanted to retire in 10 years but hadn't really started thinking about how to do it yet, I think they'd be receiving the poop also. Some things just cross the line.

 

[RetireAge50]

It is scary that so many people (25,000?) just give away so much money year after year. When they open their statement and see it is merely invested in regular mutual funds why wouldn't they cut out the middleman going forward? I'm glad we have a group of people here on this forum to help people come to their senses.

 

[scrabbler1]

+1 on that 1.4% "fee" being way too high. And as has been pointed out, that is not includng the expenses any funds your advisor puts your money into charge. So, even if you pay around 0.6% on the fund's ERs, you will now be paying around 2% overall. That's a huge bite from your portfolio over time.

You don't have to work hard to find funds other than index funds which charge reasonably low ERs, always under 1% and usually around 0.5%. You can easily create a portfolio which has a combination of index funds and other, low-ER funds. Stay away from FAs, especially those which charge anything close to or north of 1.0%.

 

[Ronstar]

What was Edelman's reasoning for having a large mortgage.

I don't remember him explaining what his reasoning was for carrying a big mortgage in the time that I listened to his show. Maybe I should have continued listening to see what his explanation was, but I lost interest after hearing the big mortgage advice. That said, I did enjoy the show somewhat.


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[samclem]

What was Edelman's reasoning for having a large mortgage.

There's no way to know, and that's a problem, isn't it? Since he benefited when people invested more money (regardless of where they got it), we just can't tell what his reasoning was--regardless of what he might have said.

 

[ERD50]

What was Edelman's reasoning for having a large mortgage.

This was sounding all Deja-vu-eee to me, here you go, from a year ago:

http://www.early-retirement.org/forums/f27/have-to-love-this-mortgage-advice-68839.html#post1369598

and my reply back then...

Now, I've been vocal about not being afraid of low cost mortgage debt, and to look at the numbers, but IMO, this was SCARY!

So he thinks nothing of putting just 10% down (doesn't that incur PMI payments?). And he says his clients were glad they followed his advice to pull the equity out of their houses (refinance to the max) when housing was at its peak! Isn't that what gets people in trouble if they need to sell and they are underwater? Whoah!

I hear ads from this guy on the radio all the time. I got the impression he probably had a reasonable approach for people who need some hand-holding - but this video changed that. Run!

edit/add - and he cheerfully assumes an 8% return on investments, no dips, just a straight 8%. Nice!

-ERD50

-ERD50

 

[Taiko]

What was Edelman's reasoning for having a large mortgage.

So that you won't have so much tied down in a nonfluid asset. He figures it is best to have it in hand should an emergency hit rather than trying to sell a house or get a loan under stress. Secondarily because of the tax breaks government provides

 

[brewer12345]

So that you won't have so much tied down in a nonfluid asset. He figures it is best to have it in hand should an emergency hit rather than trying to sell a house or get a loan under stress. Secondarily because of the tax breaks government provides

The real reason: 1.4%.

 

[Lakewood90712]

Oh Brewer , your'e so judgmental

 

[wolf]

OP: Run don't walk. 1.4% bad. Is that a one time fee or annual?

Don't assume, if you use a FA, you will earn more our lose less
than a DIY.

Keep things simple. Vanguard/Fidelity index funds. Proper asset
allocation. Investing is simple, but gets complicated when the
FA talking heads get going.

Just because Edleman has a lot of clients does not make him
right. He is just a super salesman.

Rental Properties, CD's, some Equities. Served me well.

 

[travelover]

I've posted this before, but I found out that my nephew (a big city fireman) was paying over 3% within his 401(k) investment program. So, I guess only a 1.4% take is almost charity.

 

[racy]

...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)....

Hi Kannon,
Here's a list of lazy portfolios with varying levels of complexity but all made up of Vanguard funds: Invest Simple with Lazy Portfolios - MarketWatch.com