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Old 01-01-2008, 06:35 PM   #21
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I spend on average about 1 hour/week on my finances, mostly making decisions. Vanguard tracks cost basis info for me. In fact they even entered cost basis into their system for the funds I brought over in-kind from another brokerage, although they seem to have made some mistakes in the cost basis records... it looks like they used OCR blindly.

Recordkeeping is definitely not a good reason to pay 1%... websites are getting better and better about keeping records seemlessly behind the scenes.
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Old 01-01-2008, 06:43 PM   #22
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Does posting here count as time spent managing your finances?
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Old 01-02-2008, 12:04 AM   #23
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Does posting here count as time spent managing your finances?
Yes. Its an 'education.'

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Old 01-02-2008, 01:00 AM   #24
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As for the bookkeeping I don't really do much. Most of my investments have been in ROTH or 401K or IRA so I didn't have to track gains and losses. In my taxable account I only invest in even 10K amounts and don't reinvest dividends or gains. So I could keep a fund years then when I sell I know my basis is 10K even if I lost track of the income over the years.
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Old 01-02-2008, 01:13 AM   #25
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All of my financial assets except for my house (Vanguard mutual funds in my Vanguard account) are in tax-protected accounts (IRAs and 401Ks) so it doesn't matter what I do. None of my transactions have tax consequences except when I will take distributions when I retire.

Although I peek at the balance several times a week, I only rebalance once a year or less. This takes about 15 minutes.

I have had mutual funds outside of tax-protected accounts in the past. I simply take the annual statements and use them to do my taxes. This assumes that I do not trade during the year, just buy-and-hold. Traders and market timers create their own problems for which I have no sympathy. I would rebalance no more often than once a year, maybe every other year. It would be fairly simple. You don't usually need to sell a large amount in order to rebalance. I would have an inclination to buy a balanced fund and never touch it.

I would NEVER pay someone 1% to do my paperwork. Even if I had funds outside of tax protection and traded them, it would be cheaper to hire an accountant once a year to make sense of the Vanguard statements. For example, if I had $1MM, 1% would be $10,000/year. My accountant would do it all for about $500. I may not be very smart, but I ain't stupid.
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Old 01-02-2008, 01:13 AM   #26
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The problem with your question is not what we spend, but what we 'need' to spend....

I 'look' at my portfolio more than I need... it is quick and painless to do it while I search on the net... but I do not do that much... I can go 6 months without doing a thing except look which I could not do and no problem..

I do not keep track of spending (except I actually did do this at work the other day when I was bored)... I do not keep track of my 'gain' except what Vanguard and my 401(k) tells me...

I actually spend more time on my friends and family's portfolios as they ask me what to do....
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Old 01-02-2008, 01:25 AM   #27
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Learning about investing is a different story. When I finally woke up and took charge of my financial affairs, I spent a fair amount of time for about five years--maybe an average of 5 hours a week--educating myself. After I found out how simple it was (asset allocation and slice-and-dice with no-load index mutual funds and rebalance once every year or two), I set it up and didn't mess with it anymore. Like I said, 15 minutes every year or two to do the essential stuff. I still read about investment as I find it very interesting, but basically only for amusement.

The basics are simple. Anyone who tells you otherwise is playing you for a sucker, and as PT Barnum was alleged to say, it is immoral to let a sucker keep his money.

In that vein, have you heard about my Faith-Based Investment services? Give your money to me and PRAY you get it back.
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Old 01-02-2008, 01:40 AM   #28
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Since you asked, the more money I have, the more comfortable I am handling all details on my own.

You have to understand why inflation risk is more important than investment risk and find out what your comfort with paper losses is. Or put another way, what are you REALLY afraid of? Remember, it isn't a loss until you sell it. Buy income streams cheap and let the day-by-day 'value' go up and down. Remember, there were only 3 ten-year-in-a-row periods in the last 100 years where 'the market' (historical equivalent to the S&P 500) was 'underwater'--and it was still producing dividends all that time. If ten years in a row scares you, diversify to include small caps, value stocks, and 50/50 US/foreign for equities and 60/40 equities/fixed income assets (bonds, or rather bond funds). All this will reduce the number of years it takes to recover from a down market--or a crash.
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Old 01-02-2008, 11:37 AM   #29
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Target retirement funds, and/or Lifestyle funds, may make sense for you if you do not have the inclination or perhaps abilities to spend the time managing things. They are "simple" and they make things simple", and you sound like a candidate fior the KISS school of personal finance management.

Go with a low cost provider such as T Rowe Price or Vanguard. That way you get professional management at substantially less than 1% fee. Once set up with such fund or funds, they would also ease things for a surviving spouse should something happen to you (if you are married).

I myself manage my own affairs, and I enjoy it. Spend perhaps 5-10 hours a month directly at most.

As a matter of course, I am always reading investment/personal finance/retirement publications and websites anyway, as I enjoy such. These hours would be in addition to the 5-10 hours mentioned above, as would annual tax preparation.

Recommended Reading:
Vanguard's newsletters
Money Magazine
Kiplinger's Magazine
The Battle for Investment Survival, book by Loeb
Anything you can find on the subject of "Asset Allocation"
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Old 01-02-2008, 01:12 PM   #30
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Remember, it isn't a loss until you sell it.

Sorry Ed... but very bad advice and is just not true... it is a LOSS, just not a recognized loss...

An example.... you have bought $1 million of stock... and it has dropped to $500K.... go to the bank and say "I want to put up my $1 million of stock as collateral on a $1 million loan"... you have not sold it, so it is not a 'loss', so they should be willing to do it.... but hey, they look and say 'your stock is only WORTH $500K, so that is all we are willing to do'...
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Old 01-02-2008, 03:37 PM   #31
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I guess this calls for a revisit of the 5 year rate of returns thread. Unless someone sold the securities, nobody has made any money at all, ever...
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Old 01-02-2008, 07:55 PM   #32
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I own a minimal set of funds, and spend less than 2 hrs/month actually managing them. I certainly wouldn't pay money to an advisor.
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Old 01-02-2008, 08:05 PM   #33
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I spend very little time actually doing anything -- 30 minutes/month?

Just remembered I have to rebalance and send in my 2008 HSA contribution.

I rebalance to 1% less stocks each year (e.g. 58%, then 57%, etc), but I can't remember where I was. I think 2007 was 58%.

Edit: Yeah, I figured it out based on a post I made last March:

http://www.early-retirement.org/foru...-up-26096.html
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Old 01-02-2008, 09:53 PM   #34
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....... but I can't remember where I was. I think 2007 was 58%.
I heard a great chat up line the other day .....

Hi there, I've just taken an experimental drug to improve my memory. Tell me, "Do I come here often?"
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Old 01-03-2008, 09:42 AM   #35
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I guess this calls for a revisit of the 5 year rate of returns thread. Unless someone sold the securities, nobody has made any money at all, ever...
When I compute returns, I alway use current market value for current and period market value for prior periods.

Is this common practice (i.e. in computing 5-year returns)?
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Old 01-03-2008, 10:01 AM   #36
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If you rebalance more than once a year, you probably need to get a life.

To me it's a big headache. The biggest problem I have is trying to determine what assets some of these funds actually have. If all you care about is maintaining a certain % stock-to-bonds, then it's easy, particularly if you put your money in basic index funds like many on this board. But as soon as you start getting a little creative with where you put the money, it can get pretty confusing, i.e. domestic vs foreign in pure stock funds; domestic stock vs foreign stock vs bonds vs cash in a balanced fund. And if you have a pension, will you consider it like a bond fund or cash.

You can pay someone 1% to do it for you, but how do you know if they're doing a good job of AA, their additional cost nowithstanding? Going through all this more than once a year would make me suicidal.
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Old 01-03-2008, 11:04 AM   #37
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Last month I was dragged to a series of 3 financial seminars that ended up with a "personal" evaluation session where the planner did his best to tell us why we desperately needed his services. While it was interesting and I did learn a few small things at the seminars, they were essentially for folks in their 30's with many years to go, not the near retirement group that was there. I could never get him to actually explain what would be delivered for the 1% fee of managed money.

I didn't think to say that would be 25% of what we planned to withdraw each year, but that would have been a great line. All I could get were vague inferences to help with life insuarance planning (that I did question - why would two people in their 60s with grown and gone children need life insurance??) and estate planning. As to the 401(K)s, he said they would roll them all to IRAs at ING and make sure they were fully diversified. Basically we should not worry our little heads as they would take care of everything.

Funny thing is that I thought we had been doing that for the past 25 years or so fairly well. Unfortunately, my wife is fearful that she would nto be able to handle it alone, so I guess she will get scammed once I am gone. She would not even let me ask the perennial question - if you are so good at what you do, why are you still here doing it and not on your yacht? A rephrasing of the quote "Where are all the customer's yachts??"

So, no, I don't think we will be taking on a financial planner anytime soon.
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Old 01-03-2008, 01:23 PM   #38
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Last month I was dragged to a series of 3 financial seminars that ended up with a "personal" evaluation session where the planner did his best to tell us why we desperately needed his services. While it was interesting and I did learn a few small things at the seminars, they were essentially for folks in their 30's with many years to go, not the near retirement group that was there. I could never get him to actually explain what would be delivered for the 1% fee of managed money.
Sounds like an insurance guy, not an advisor.

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All I could get were vague inferences to help with life insuarance planning (that I did question - why would two people in their 60s with grown and gone children need life insurance??) and estate planning.
Well maybe he was referring to LTC. If you don't have a large estate, you probably don't need a lot of life insurance as a wealth transfer tool........

Quote:
As to the 401(K)s, he said they would roll them all to IRAs at ING and make sure they were fully diversified. Basically we should not worry our little heads as they would take care of everything.
he would make more than 1% doing that..........

Quote:
Funny thing is that I thought we had been doing that for the past 25 years or so fairly well. Unfortunately, my wife is fearful that she would nto be able to handle it alone, so I guess she will get scammed once I am gone.
Why not teach her while you are alive?

Quote:
She would not even let me ask the perennial question - if you are so good at what you do, why are you still here doing it and not on your yacht? A rephrasing of the quote "Where are all the customer's yachts??"
Would you really want an advisor that has a yacht? Where do you think said advisor got the money to get a yacht??
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Old 01-03-2008, 02:17 PM   #39
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No one seems to ever discuss how much work it is or how much time it takes to keep track of and manage their investments leading up to and while in retirement.

Can you please comment on how much time per month you spend on research, tax angling, monitoring, bookkeeping, rebalancing, etc?
I spend anywhere from 5 minutes to 2 hours per day on ER planning and money management, depending on what I want to do. Every morning I begin this while drinking my first cup of coffee. This is part of my day that I look forward to - - it gets me out of bed in the morning.

I suppose that I COULD just ignore it all and work the rest of my life, but why? I have a plan, and it gives me great joy to see it slowly falling into place, just as planned. That is what I am doing each morning, pretty much. If there are bumps in the road, or if I feel that it's time to reassess, then sometimes I want to stay up late at night and tweak my plan.

I don't think people can fully realize their potential unless they seize control of their lives and make it happen. It is also a lot of fun! Nobody is as interested in my financial well-being as I am.
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Old 01-03-2008, 02:32 PM   #40
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Taking your question as sincere, I think you would benefit from educating yourself. For me, the more I learned, the easier it got.

I like Solin's book. You can easily get by with 3 or 4 index funds, rebalance them every year or two, and ignore them in between. Your results longterm will probably be similar to those of a good advisor. Tax consequences are not that complicated for most, and any good book can set you straight.

A fee of 1.5% of your nest egg is 38% of your annual income in many retirement scenarios. You have to decide if that is a good investment for you.
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