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Opinon for Portfolio
Old 11-13-2008, 06:19 AM   #1
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Opinon for Portfolio

Ok..if you would? Give me your opinions on this one..
I do Financial volunteer work at my Local VA ( Veterans) center and in my small Town's VFW/AM Legion...of just the Basics and for More Indepth planning refer them to a Investment Firm that also does it Free..

I use several differnet Financial Planning Sites..from Vanguards to others..

Here is This latest Case:

1. Self Employed Guy had to retired due to Disability at age 55
2. No IRA/Roths/Pensions
3. Gets SSD only fixed income of $15,000 yr
4. Lost his Wife..Died Cancer, kids all grown up on their own doing well
5. Gets VA Health Care with $25 ded. for Drugs- Spend ave of $1,000/yr and had Medicare coverage
6. Downsized to a Smaller Cottage home and had $500k leftover for savings.> Taxable Account with Vanguard
7. Financial Planning says will need an avearge of $30,000 yr Net after tax for next 20 yrs... $20k and then +$5k every 5 yrs .
8. Thus needs a Min. of $15k yr from the $500k + est. Fed and state Taxes = $18,000 yr = 3.5% apy
9. Adding another $15,000/yr net aft tax to go back into the $500k for Inflation ( Gross 3.5% = $18k - 18% est. taxes = $15k net )
10. Total Min. % needed from the $500k Investment Port = 7% apy
11. He would also like to make as much as he can to leave as much as he can to his Kids..
12. Been a Risk Taker his whole life, thus has no problem investing in Equities with -25%-50% downsides at times, just as along as it makes it up in 2-3 yrs afterwards..and then some.. Has gone thru Bankruptcy 2 times in his life, Once in his business and once after wife died of cancer..from hospital/med. bills..
13. Plan B: If loose too much , can go live with his Kids, all are doing very well and have Very Big Homes and/or have offerred to Give him $ anytime he needs it to tie him over and stay in his Own little 2 bedrm home.
14. Has already taken out 3 yrs of COH in a MMkt Fund for his Bills.
15. The $500k is the Bal. to invest..

> One Suggested Port Mix is a 40/60 Port ( like Mine is)
> Apprently would be saitsfied with a 8-10% apy as Minimum Goal..
> Which tells me he best have a 60/40 or even a 70/30 Port?

Have Reviewed and gotten opinions from several Pro's:
> Fund Advice/Paul Merriman, Scott Burns/Asset Builder, Paul Ferrell's Index Ports, Bob Brinker's Ports and 2 Investment Firms recommended Ports..

> Not a Big fan of using Indexes.. since have a Limited Upside to them or have to own more in higher Risk Int'l to get a higher Rtn.. and eventhen, the past 10 yrs of a 70/30 Index port has only done about 7% apy..(8% ending 2007')

so far, at the Top of the Pile of Ports?
A Couple of Balanced Fundsof: OAKBX and FPACX.( Have ck'd out over 25 of them )
+ 5% in each of Growth Funds: FAIRX,CGMRX,CGMFX

Is ready to start buying in while market is way down in 25% increments to hopefully take advantage of current and future markets..and hopefully get portfolio off to a good start it's first few yrs..

So, What kind of a Taxable Portfolio would you put together for him and recommend?

Thank you
Dennis
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Old 11-13-2008, 07:35 AM   #2
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i can't help much with the detailed FA, but i wanted to tell you HOORAY FOR YOU for your volunteer work.
i am a volunteer driver with the DAV/VA Transportation Network at my local VA outpatient clinic. it is the highlight of my week.
anything we can do for our veterans is always a good thing and always appreciated.
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Old 11-13-2008, 10:09 AM   #3
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Quote:
Originally Posted by Dennis View Post
11. He would also like to make as much as he can to leave as much as he can to his Kids..
Quote:
13. Plan B: If loose too much , can go live with his Kids, all are doing very well and have Very Big Homes and/or have offerred to Give him $ anytime he needs it to tie him over and stay in his Own little 2 bedrm home.
I'm struggling with reconciling these two statements. If the kids are all doing well, and he is struggling along on on SSD, why not go with a more conservative investment scheme? Even, dare I say it, a SPIA annuity? Or a Vanguard payout fund?
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Old 11-13-2008, 10:35 AM   #4
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He should not have dismissed index funds. Just that alone says that he doesn't think rationally or look at the real returns of those balanced funds.
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