Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Vanguard Personal Financial Planning Services
Old 08-29-2003, 05:43 AM   #21
Recycles dryer sheets
newellcr's Avatar
 
Join Date: Aug 2003
Posts: 187
Re: Vanguard Personal Financial Planning Services

GDER, Laura, and John,

Duly noted - 3 votes against. The $50 in Costco cash arived yesterday. Our AMEX rep didn't push a thing other than a plan.

Cheers,

Chris
__________________

__________________
newellcr is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Vanguard Personal Financial Planning Services
Old 08-29-2003, 07:07 AM   #22
Recycles dryer sheets
 
Join Date: Nov 2002
Posts: 398
Re: Vanguard Personal Financial Planning Services

As I mentioned in previous posts, I'm planning to set myself up as an investment advisor. *I'm not participating in this forum to solicit business, but it is useful for me to learn about people's needs for advice and experience with other "financial professionals."

The big dilemma that a person faces in deciding how to manage their assets is this:
1. *They can deal with a "professional," but even if the "professional" is legitimate (and most are), there is the liklihood that a significant portion of their investment returns will be "milked away" in commissions and management fees. *And companies (probably including Vanguard) that offer relatively inexpensive advice, probably have it being provided by somebody in a distant office who is fresh out of college.
2. *People can become educated about investing by reading books, attending classes, etc. *The problem with that is that it requires time and effort, and some of the published information is contradictory, so which advice does a person believe?
3. *People can just "wing it," relying on their own instincts -- which is what most people seem to do. *From what I have seen, however, most people who do this inadvertently end up paying a lot more in management fees and taxes than they need to. *They might realize that they are paying a few percent here and a few percent there, but don't realize the long-term cumulative effect of that, in terms of drastically reducing their potential gains.

My concept of providing investment advice is to (a) look at the person's assets and then (b) quote them a fixed fee for discussing their preferences, and then providing specific written recommendations as to how to change their investments to achieve their preferences, with minimal future costs. *This generally would involve the type of investments that I have mentioned favorably in various posts, such as Vanguard and TIAA-CREF mutual funds and U.S. Treasury securities, which they would purchase directly or through a broker of their choice.

If you are looking for an investment advisor, see if you can't find one who will offer that sort of an arrangement.
By law, whomever you hire must provide a written statement describing their services and fees. *You should certainly obtain that from them before committing to anything.
__________________

__________________
Ted is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-29-2003, 06:13 PM   #23
Recycles dryer sheets
newellcr's Avatar
 
Join Date: Aug 2003
Posts: 187
Re: Vanguard Personal Financial Planning Services

Ted,

Good luck with the future career. There is certainly a need for the skill. You wrote "2. People can become educated about investing by reading books, attending classes, etc. The problem with that is that it requires time and effort, and some of the published information is contradictory, so which advice does a person believe?"

I agree, it can take hundreds of hours to ferret out the answer to just one portion of a financial plan. That's why I was talking to AMEX. I probably would have hired the job out to AMEX but the saleswoman wanted another $350 each and every year to answer current questions and to meet with us 3 times a year. Depending on the difficulty of questions, I would expect some of the follow on advise to be included in the original fee. There was also potential for a commission for her in addition to the up front plan cost. Also, it's a financial plan, why do I need to see her 150 times before I croak? How many times does the plan need to be updated?

Now that I've found this site, I can probably slice my research time by a fair percentage.

Cheers,

Chris
__________________
newellcr is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-29-2003, 08:19 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Vanguard Personal Financial Planning Services

A. You don't need a plan.
B. You need a plan.
I am a die hard Bogle-head and 100% VAnguard fund owner except for my hobby stocks. Having read a lot and used many a planner over the years, I don't need to pay Vanguard extra for what I already know.
I've been investing and reading since 1965 (instead of reading and then investing )- my investment mistakes over the years would pay many times over the most expensive plan mentioned to date.
Each ER, I would suspect falls some where between A. and B.
__________________
unclemick is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-30-2003, 06:24 AM   #25
Recycles dryer sheets
 
Join Date: Nov 2002
Posts: 398
Re: Vanguard Personal Financial Planning Services

In general, I think that the "plan" for anyone should be to get their money invested in a way that is (1) diversified, (2) has low initial and annual costs, and (3) has minimal taxes. In these three respects, most people's investment mix has lots of room for improvement.

Once a person establishes a portfolio that meets the above criteria, however, they should be capable of managing it themselves, by periodically re-balancing among assets to maintain approximately the same asset allocation. An honest investment advisor should explain to them how to do that. It might still be in their interest to have an advisor periodically perform a "financial check-up" on their investments, which should cost only a few hundred dollars.

Incidentally, the financial advisors who make the really big bucks (at investors' expense) are the ones who are hired by "high net worth" individuals to manage their assets, for a fee that typically is about 1.5% per year. I'm sure that very few justify their existence by enhancing investment returns by more than their fees. And some of those who try too hard for high returns assume excessive risks that sometimes prove devastating.
__________________
Ted is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-30-2003, 01:08 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Vanguard Personal Financial Planning Services

Hey Ted - Your points are well taken- hopefully I'm doing that now. My view looking back to 1965 had I had such a plan which I understood, trusted, and struck with thru the years I be up there with Buffet - Jimmy not warren - singing along sitting in my villa. I feel I may have overpayed for my education thru the school of hard knocks.
__________________
unclemick is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-30-2003, 02:47 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: Vanguard Personal Financial Planning Services

Hey unclemick! I "overpaid" for my education also, but
it's all hindsight now, isn't it?

Interesting your reference to Jimmy Buffet as my spouse
and I refer to our eventual ER lifestyle as"Margaritaville". As I age, I get more comfortable
with life's ups and downs. After all, the grave awaits
all of us in the end, and once we are gone, even the most outstandiing will be quickly forgotten.
__________________
MRGALT2U is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-30-2003, 03:51 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Vanguard Personal Financial Planning Services

Hey Johngalt - hopefully the mistakes as well as lessons learned will be of some 'educational' value. We managed to ER successfully anyway.

I think you can do margaritaville where ever your at - my sister sends an aloha shirt ever Christmas form Kentucky and my oldest nephew(a true Buffet fan) sails Puget Sound although you got to have a creative imagination come winter.
__________________
unclemick is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-30-2003, 07:09 PM   #29
 
Posts: n/a
Re: Vanguard Personal Financial Planning Services

Just to add support to goldenx's experience, we had Vanguard do a retirement plan. For one who hasn't studied the subject it is good value. However, with a little homework one can figure it out on your own.
__________________
  Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-31-2003, 08:02 AM   #30
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 98
Send a message via Yahoo to RedOscar
Re: Vanguard Personal Financial Planning Services

Quote:
.....my sister sends an aloha shirt every Christmas from Kentucky....
I never realized we had aloha shirts here in Kentucky (must me imported). Tell her to forget the shirt, this year you want a big bottle of Maker's Mark!

Red
__________________
RedOscar is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-31-2003, 11:00 AM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Vanguard Personal Financial Planning Services

Yes - you can get all kinds of imports at the mall - even in 'greater' Paducah! They've come to visit us in New Orleans but we have yet to visit Benton, Paducah and points around there. My brother in law says there is some good fishing provided you get good tips from the locals - the guy's who know.
__________________
unclemick is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 08-31-2003, 05:01 PM   #32
Recycles dryer sheets
 
Join Date: Aug 2003
Posts: 474
Re: Vanguard Personal Financial Planning Services

Ted,

I've also played with the idea of becoming a financial planner. I haven't been able to do it at any existing firms that I've found because I couldn't see my self asking someone to pay the ridiculous fees that they charge.

I think the major flaw with your approach is that you expect people to follow through. I once heard a defense of loaded mutual funds that made some sense to me, it was basically that money invested with a 5% load is better (for the client) than money that is spent. I think that a real value of a financial planner is that they have a great incentive to get you to invest, and will hound you to do so. Many people need that or they will end up spending everything they make.

There are also a lot of people who just don't want to be bothered with it. I work in a department with financially literate people. When I found out that one of my employees was going to use an AMEX financial planner, I asked her why she would spend all that money (once I convinced her that she was really spending money -- the fees were buried, of course) for something she could to just as well herself. She said that when she got home she just didn't want to worry about that.

High-fee financial planners also make some record keeping jobs a little simpler, and can help with tax-wise investing and all that.

I'm still looking for the planner that can take care of all those things and still charge a reasonable amount. It doesn't seem like it would be that tough to do.
__________________
bongo2 is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 09-01-2003, 01:43 PM   #33
Recycles dryer sheets
 
Join Date: Nov 2002
Posts: 398
Re: Vanguard Personal Financial Planning Services

Bongo2,

Everything you say is correct about many investors, and that is why I'm sure that I won't put too many existing "financial professionals" out of business.

The type of investor that I could help is one who is (1)smarter than average, (2) willing to put a little effort into learning about investing from somebody who is not biased by trying to "sell them something," and (3) willing to do the small amount of paperwork (or e-work) required to place their investments into accounts with reputable, low cost firms like Vanguard and discount brokers. Once people get their accounts set up in this way, they can essentially run on "auto-pilot" except for re-balancing every year or so.

I too would be reluctant to work for most existing firms that do "financial planning," since the name of the game is to maximize the firm's profits by milking investors. ("Milking" is the legal process of regularly extracting a relatively small percentage of an investor's earnings over an extended period of time.)

It is interesting to note that, in order to get various "professional" certifications like CFP, it is necessary to have a certain number of years of experience working for an "established" firm. Fortunately, meeting the legal requirements of registration as an investment advisor (with state securities agencies) does not require this type of "experience" at milking people. I'm confident that my MA degree in economics and investment experience will allow me to give more cost-effective investment advice than people would get from "established" "financial professionals." Fortunately, I'm sufficiently well-off financially that I won't need to charge high fees or milk people.
__________________
Ted is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 09-01-2003, 07:43 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Vanguard Personal Financial Planning Services

Hey Ted
I don't think your MA degree will help as much as brushing up on human psychology and developing the patient ears of a bartender.

My sister(55) has asked me over years about investing - bounces off like a tennis ball from a cement wall. My nephew her oldest borrwed my 1994 Common Sense on Mutual Funds and took to DCA and index funds like a duck to water.

In 1957 a maiden aunt died and left her nephew(my father) enough mutual funds to buy a new house and send her remains back to a family plot in finland. She was a maid all her life and never made probably 1/4 of his lumber mill job. He grew up in the depression and knew stocks were 'risky' so he sold anything left over. I was in the 7th grade and got a book on mutual funds from the public library to see how she did it.

Some 'get it' some don't.

Your postings show a lot of thought and may you only have to deal with people like my nephew. I gave being a financial planner some thought in 1994 until I realized - I'm not patient.
__________________
unclemick is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 09-02-2003, 05:33 AM   #35
Recycles dryer sheets
newellcr's Avatar
 
Join Date: Aug 2003
Posts: 187
Re: Vanguard Personal Financial Planning Services

I spoke with a Primerica rep some years ago. They try to convert you to work for them if you show any interest. I asked the rep what was the worst part of working in the financial business. He said that anyone who knows that you might make a buck, or portions thereof, from financial products will start treating you differently. He said they no longer treat you like a "good guy". This I remember, just about everything else he said, I forgot. Interesting.

Cheers,

Chris
__________________
newellcr is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 09-03-2003, 07:09 AM   #36
Recycles dryer sheets
 
Join Date: Nov 2002
Posts: 398
Re: Vanguard Personal Financial Planning Services

Quote:
Hey Ted
I don't think your MA degree will help as much as brushing up on human psychology and developing the patient ears of a bartender.
I'm thinking of establishing a financial planning service in partnership with a psychologist. Our motto will be "You may lose money, but you won't care."

The problem with most "financial professionals" is that they excel at the psychology of sales, and have only a middling understanding (at best) of the economic principles that underlie markets. One of the most basic of these is the "efficient markets principle," which basically contradicts the image that salesmen attempt to convey -- that they are so "professional" that their investment recommendations are "special" and will thus "beat the market." They can't legally say this, so the strategy is to imply it as strongly as possible without stepping over the legal limitation on false advertising.

I'm not at all naive about the psychology of investors, but I differ from typical salesmen in that I'm not trying to use it against them to "milk" them.

One observation is that women are generally less knowledgeable about investing than men are. This relates to women generally having less interest in mathematics, and to the "man of the family" generally being the primary wage earner. In fact, some of the most lucrative "targets" for "financial professionals" are women who have recently become widowed and are suddenly faced with managing their financial assets.

With a little honest advice, however, women can actually be better investors than men. That is because they are more willing to simply "buy and hold" investments. Men are more inclined to actively manage investments in an effort to "beat the market," and usually end up doing much worse financially as the result. I'm "guilty" of that myself, but limit my high-risk investing to a small portion of my overall portfolio.
__________________
Ted is offline   Reply With Quote
Re: Vanguard Personal Financial Planning Services
Old 09-03-2003, 12:13 PM   #37
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: Vanguard Personal Financial Planning Services

Hi Ted! I know I sound sexist, but by and large the
women I have known fall far short of men in
investing knowledge//financial management. Could be a lot of reasons for this. You touched on a couple.
__________________

__________________
MRGALT2U is offline   Reply With Quote
Reply

Tags
vanguard


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Optimism for Planning Your Personal Budget wog777 FIRE and Money 0 01-23-2007 01:41 PM
Ph.D in Financial Planning mickeyd FIRE and Money 11 11-21-2006 07:18 PM
Free Financial Planning? bongo2 FIRE and Money 11 05-01-2006 09:19 AM
Financial Planning on the Side bongo2 FIRE and Money 10 04-11-2006 09:32 AM
My Vanguard Financial Plan Results km4hr FIRE and Money 19 01-28-2006 01:35 PM

 

 
All times are GMT -6. The time now is 04:13 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.