financial manager

[photoguy]

Quote:

Originally Posted by Svensk Anga Yes, 0.25% is a large chunk of a 3% withdrawal rate. But how many of us are making 0.5%, 1%, or worse mistakes most years by not sticking to the plan? I am a firm believer in educating myself to where I can DIY. I do not see myself relinquishing control to an adviser. But I have to wonder if I might not be better off doing so, if just to get dispassionate execution of the plan.

I don't disagree with you and probably there are many people who make mistakes that cost much more than 0.25%. But I personally could never turn over control of my portfolio.

[smjsl]

If you want to try doing it yourself with minimal overhead, here is something simpler than even the 3-fund portfolio:

(1) If most of your money is in taxable, or if most of your money is in tax deferred account, use on of four Vanguard Life-Strategy funds (if you want a particular bond/stock split) or Target retirement fund (if you want it adjusted over time for you)

(2) If there are significant chunks in both taxable and tax-advantaged accounts, choose Life-Strategy (or Target Retirement) funds in each, such that they have higher bond percentage in tax-advantaged account and lower bond percentage in tax-deferred, and so that their average stock/bond split (weighted based on amounts in taxable vs tax-advantaged) approximates what you are comfortable with.

Then, you'll be set with 1 fund per account and can set it and forget it (except for any changes once every 10-20 years to adjust your bond allocation higher).

If you have tax advantages accounts without possibility of access to funds like above, try to approximate with what you have...

I like others suggestions for fee-only adviser, if you feel you would still benefit from it.

[serie1926]

wrichards58, my wife and I signed up with Bill Schultheis and his team at Soundmark Wealth Management a year ago and are very pleased with their efforts and results.

Please PM me if you'd like to discuss.

[Tyro]

Quote:

Originally Posted by smjsl (2) If there are significant chunks in both taxable and tax-advantaged accounts, choose Life-Strategy (or Target Retirement) funds in each, such that they have higher bond percentage in tax-advantaged account and lower bond percentage in tax-deferred, and so that their average stock/bond split (weighted based on amounts in taxable vs tax-advantaged) approximates what you are comfortable with.

I kind of like the idea of this strategy using Wellington (67/33) for tax-deferred and Wellesley (33/67) for taxable accts.

Does this make sense, or am I missing something?

Tyro

[REWahoo]

You might consider reversing the two for better tax efficiency.

[Tyro]

Quote:

Originally Posted by REWahoo You might consider reversing the two for better tax efficiency.

Ok, thanks -- I got that backwards. I was thinking the higher stock weighting would be in tax-deferred to grow over time (weathering market swings) and the higher income weighting would help current expenses while still being low enough not to trigger tax threshholds.

[MichaelB]

Wellington QDI is 59.2% vs Wellesley at 38.6%. I would have expected a bit greater difference. Still, if your marginal tax rate is 25%, keeping them as REW suggests would add about 0.5% (of income) per year to the bottom line. Not a bad outcome, considering the cost.

[smjsl]

Quote:

Originally Posted by Tyro I kind of like the idea of this strategy using Wellington (67/33) for tax-deferred and Wellesley (33/67) for taxable accts. Does this make sense, or am I missing something? Tyro

It makes sense (modulo reversal) if you like / believe in these funds and/or their managers. I avoid any actively managed ones.

[Hermit]

Quote:

Originally Posted by wrichards58 I really do not feel confident in managing my money so I am looking at financial manager.... does anyone know anything of fisher investor group

I have a couple of small IRA accounts at Vanguard and paid them about $200.00 to review my situation and all my accounts including my 401k accounts. They provided a plan that I thought was as good as a plan prepared for me by a broker several years ago. The plan identified asset allocations along with specific funds and amounts to invest in each fund including specific funds available in my 401k. If you want I think they can help you implement it for the Vanguard accounts. It was pretty easy to move the money around in my 401k and that was all I had to do by myself get the allocations right. I'm pretty sure Fidelity and other discount brokerages have the same kind of service.

[Don46]

About four years ago I decided to go with one of the Charles Schwab Advisor Network investment managers. I've been happy. I considered going it alone and just using index funds on automatic pilot. But I have a little over $2.3 million with Schwab and I want something more than mutual funds can provide. The commission varies from one manager to the next, but the one I went with charges 1 percent for the first million and .75 percent for the remainder. In my case it comes out to about .85 percent of the total. This is usually about $20k, a lot of money, but tax deductible as an investment expense and this brings the effective rate down to about .5 percent which is close to index fund commission rates.

He has me in individual stocks, individual bonds, and some limited partnerships. The latter have proved lucrative and I would not have had any clue about how to get into those. Bond funds, I am warned, can be volatile and are affected by your fellow investors in the fund, the herd that might decide to bail and bring down the value of your shares. My manager has me in some higher yield but lower rated bonds and, so he tells me, by looking closely at individual bonds one can lower risk and get decent returns.

i'm 67 and planning to retire in another year. I'm a university professor and have never had high earnings, but I know how to save and, over the course of 42 years, have been heavily invested in the stock market. I got walloped in 2000, again in 2008, and after that I decided I need the expertise and discipline a hired professional investment manager can bring to this. I'm happy with the results. I thought I would miss tinkering with my investments every few weeks. I don't at all.

I wanted to note that what I'm describing is an "investment manager" not a "financial manager." I do not get advice on long term retirement planning per se. He does not look after funds in my other retirement accounts with my present employer. His job is to manage my Schwab accounts. When I retire, I will likely roll over my other accounts into my Schwab IRA and let my man manage those as well.

One additional benefit. I have gotten to know this guy. We meet once or twice a year and go out for drinks and dinner. I can contact him anytime by email or telephone. We talk about the economy, politics, history, and life plans. I trust his judgment and feel like I have a friend on my side. This is worth something to me.

I hope this is helpful.
Don

[travelover]

Quote:

Originally Posted by Don46 ......... One additional benefit. I have gotten to know this guy. We meet once or twice a year and go out for drinks and dinner. I can contact him anytime by email or telephone. We talk about the economy, politics, history, and life plans. I trust his judgment and feel like I have a friend on my side. This is worth something to me. I hope this is helpful. Don

For $20,000 I will be your friend, too.

[target2019]

Quote:

Originally Posted by travelover For $20,000 I will be your friend, too.

For $10,000 I will be twice the friend you will be.

[Don46]

What would it cost to manage 2.3 million using mutual fund managers? I suspect it is about the same and not tax deductible.

[travelover]

Quote:

Originally Posted by Don46 What would it cost to manage 2.3 million using mutual fund managers? I suspect it is about the same and not tax deductible.

You don't want to know, because it will make you cry. And Vanguard doesn't send me a birthday card.

[Hermit]

Quote:

Originally Posted by Don46 ... The commission varies from one manager to the next, but the one I went with charges 1 percent for the first million and .75 percent for the remainder. In my case it comes out to about .85 percent of the total. This is usually about $20k, a lot of money, but tax deductible as an investment expense and this brings the effective rate down to about .5 percent which is close to index fund commission rates. He has me in individual stocks, individual bonds, and some limited partnerships. The latter have proved lucrative and I would not have had any clue about how to get into those. Bond funds, I am warned, can be volatile and are affected by your fellow investors in the fund, the herd that might decide to bail and bring down the value of your shares. My manager has me in some higher yield but lower rated bonds and, so he tells me, by looking closely at individual bonds one can lower risk and get decent returns. ...

My $200 plan did not get me any individual bond recommendations. Nor did it get me any opportunities in limited partnerships. But I don't think I have the kind of resources to invest in those types of securities. I don't think I make enough money in annual income to deduct $20,000 from taxes. I may be persuaded to pay a one time expense for individual bond purchasing advice if I could be convinced I have the resources to do it. Until then, I am hoping bond funds don't track stock funds too closely in the future.

I guess an individual's management style choice has a lot to do with resources, knowledge, and investment comfort.

[REWahoo]

Quote:

Originally Posted by Don46 What would it cost to manage 2.3 million using mutual fund managers? I suspect it is about the same and not tax deductible.

Using Vanguard funds with 0.2% expense ratios your cost would be $4,600/yr - not tax deductible of course. But if, as you say, you want "something more than mutual funds can provide", you've got yourself a $15,000/yr friend - a tax deductible one to boot!

[Don46]

I did get a birthday card from my investment manager in fact! I think my point about the personal relationship is that he knows more about me and where I'm headed in life. Also, and more important, he doesn't just park the money and put it on automatic pilot; he sells assets and increases cash reserves when he sees dangers in the market, and he watches for bargains. This is not a market timing day trading program, but it is more than just placing the money with a fund and setting it on automatic pilot. I thought I was pretty smart about investing and it took me a couple of nose dives to realize I needed some help from a pro.

[photoguy]

As an academic, you might want to read what other academics have found about "professional investors". Take a look at A Random Walk Down Wall Street by Burton Malkiel (prof. economics at princeton).

[travelover]

Quote:

Originally Posted by REWahoo Using Vanguard funds with 0.2% expense ratios .......

Now see, you are going for the high expense funds. I use the Total Stock Market Admiral fund at 0.06%, but again, sadly, no birthday card.

[REWahoo]

Quote:

Originally Posted by travelover Now see, you are going for the high expense funds. I use the Total Stock Market Admiral fund at 0.06%, but again, sadly, no birthday card.

You're just trying to run up the cost of his friendship.