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Old 08-26-2008, 01:18 PM   #21
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Imagine how awful it must be for some rock stars and some basketball players and such - - all that money, and sometimes no mathematical inclinations. They would be low hanging fruit for greedy, unscrupulous FP's.
They usually listen to their agent, who knows less than ANYONE on this board about personal finances...........

I had a Major League pitcher as a client once. I don't know WHERE those guys get their ideas from. He once paid $750,000 for a WATERFALL in his backyard. He transferred his accounts out because I wasn't aggressive enough for him. Last I heard he was a mortage broker out East somewhere..............
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Old 08-26-2008, 01:23 PM   #22
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Sorry.........man, I am having "one of those days". CFP is not on the table for 2008, too many personal distractions with the family..........
Sorry to hear, Dude. Didn't really mean to give you such a hard time.
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Old 08-26-2008, 01:23 PM   #23
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They usually listen to their agent, who knows less than ANYONE on this board about personal finances...........

I had a Major League pitcher as a client once. I don't know WHERE those guys get their ideas from. He once paid $750,000 for a WATERFALL in his backyard. He transferred his accounts out because I wasn't aggressive enough for him. Last I heard he was a mortage broker out East somewhere..............
$750K for a waterfall? Yikes! That is a man who REALLY wants a waterfall. You definitely had a "problem child" on your hands.
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Old 08-26-2008, 01:36 PM   #24
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Hmm...I took a trip down to san simeon to tour the Hearst Castle about 15 years ago. That was the first time it really occurred to me what it was like to be truly, ridiculously rich.

Around the back we got to look at a 'fountain' that would have qualified as a full blown major pool in the average homes back yard. Story was that Hearst saw it somewhere in europe and liked it, so bought it, had it disassembled and transported to his place and reassembled. Further story was that he rarely even looked at it or spent any time near it.

Just to reinforce this, the only way to bring stuff like this to his estate at the time was to bring it in by boat to the shore and haul it up a series of cliffs.

IIRC it cost something like $5M to deconstruct, move and reconstruct it. And that was in the early 1900's.

So perhaps a $750k fountain is really a pretty LBYM item.
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Old 08-26-2008, 01:36 PM   #25
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$750K for a waterfall? Yikes! That is a man who REALLY wants a waterfall. You definitely had a "problem child" on your hands.
Yeah, but it was a NICE waterfall. Professional athletes are some of the WORST investors I have ever seen. His agent kept calling me and asking for "stock tips", but never gave me any money to invest...........
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Old 08-26-2008, 01:37 PM   #26
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Well let's see - after forty years as an investor, thirty as a rocket scientist and reading a lot of stinking books - when the light bulb came on as to how screamingly stone simple it all was - it's a little embrassing and ticks me off that I wasted all that time:

Pssst - Wellesley or if you'd really rather have a Buick with chrome trim - Target Retirement.

As for all the rest - like duh! Spend less than you make.

heh heh heh - And don't read no stinking books!

Do or do not - there is no try (Yoda).
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Old 08-26-2008, 01:38 PM   #27
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Hmm...I took a trip down to san simeon to tour the Hearst Castle about 15 years ago. That was the first time it really occurred to me what it was like to be truly, ridiculously rich.

Around the back we got to look at a 'fountain' that would have qualified as a full blown major pool in the average homes back yard. Story was that Hearst saw it somewhere in europe and liked it, so bought it, had it disassembled and transported to his place and reassembled. Further story was that he rarely even looked at it or spent any time near it.

Just to reinforce this, the only way to bring stuff like this to his estate at the time was to bring it in by boat to the shore and haul it up a series of cliffs.

IIRC it cost something like $5M to deconstruct, move and reconstruct it. And that was in the early 1900's.

So perhaps a $750k fountain is really a pretty LBYM item.
My dude wasn't a Hearst, Rockefeller, or anything like that. Rumor has it that Warren Sapp had a 5-day party that cost him $1.15 million, now THAT's a party.........
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Old 08-26-2008, 01:58 PM   #28
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CFP is not on the table for 2008, too many personal distractions with the family..........
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You mean you're not even CERTIFIED?

Oh dear, and I was thinking you had a modicum of credibility!

Ooops! I think the bunny is going to make you pay for that revelation.
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Old 08-26-2008, 02:11 PM   #29
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I think that she is right, but has reached the wrong conclusions. This is inevitable given what she does for a living, which is study complicated financial products.

The reality is that many financial products are so convoluted that no normal person has a realistic chance of understanding them. Derivatives are a classic example, as are some of the exotic mortgage securities currently causing so many problems. Some types of futures contracts, private equity, hedge funds and many annuities would also fall into this category IMHO.

However, consider where these product originate: In a substantially fruitless search for alpha or in a search for higher fees (I suspect the actual impetus is split about 50-50 between the two). The risk is not worth the return.

I think what consumers need to be taught is that if they cannot understand it, they should not be investing in it. The actual chance of gaining any alpha is small or zero (I personally believe it is larger than zero for specific products, but below zero for the group. Good luck finding the one that is greater than zero.) Additionally, the vast majority of financial planners (using the broadest definition) do not understand these product either.

Thus, I think that consumers need to be taught KISS (Keep it Simple, Stupid), and to avoid these products like the plague that they are. Am I wrong?
"Employees and retires all over the land:
Don't invest in what you can't understand.
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Old 08-26-2008, 02:20 PM   #30
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You mean you're not even CERTIFIED?

Oh dear, and I was thinking you had a modicum of credibility!

Well, we ALL KNOW about the following:

Certified used GM car
Certified ground beef
Certified produce from foreign countries
Certified mail (who wants to get that usually?)

Are you sure I should be certified? Maybe it's the kiss of death.

Don't worry, I have my MD, phD, MBA, and MS from The Central College of Easter Island all hanging on my office walls.........

I'm thinking about giving back that Finance degree though, since I am obviously underemployed...........
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Old 08-26-2008, 02:21 PM   #31
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Ooops! I think the bunny is going to make you pay for that revelation.
Either PAY the bunny, or the bunny will MAKE you PAY.........

20 lbs of COSTCO bacon sent off to him today, it's a small price to pay...........
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Old 08-26-2008, 03:27 PM   #32
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I hope theres a little ice in the box

BTW, my vanguard funds just fooled around with your american funds girlfriend.
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Old 08-26-2008, 05:55 PM   #33
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Q. But aren't basics such as budgeting always applicable?
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Old 08-27-2008, 11:42 AM   #34
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"Employees and retires all over the land:
Don't invest in what you can't understand."
For finances and money are beyond your command
Your money they're rapidly losin'
Get out of the way if you can't comprehend
For the FAs they are a boozin'

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Old 08-27-2008, 12:27 PM   #35
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Consider the source -- Money Magazine.

I really liked this:

Financial literacy classes give people the illusion that they can successfully manage their finances. So rather than seek help, they end up making worse decisions.
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Old 08-28-2008, 07:13 AM   #36
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Big idea: Why you can't teach money - Aug. 26, 2008

Is she on something? She is basically saying that finances nowadays is too complicated, so we should all just hire a financial planner - but not trust the FP.

To me, that's like saying that too many things I eat can cause cancer, so I am just not going to eat.

Anyone else feel the same as me?
Wow, I'm really rolling my eyes here. On some things I totally agree with her, like this statement...
"try to get everyone to understand that the people selling you financial products often don't have your best interests at heart."

But on other things I totally disagree, such as getting regulators involved. Sorry, but thinking that Congress can solve our problems just makes me angry...look at what they've done with so many other things in our country, such as the way they run our budget on a deficit every year...if I did that with my personal accounts I'd be called a deadbeat and be forced to file bankruptcy.

I think if people understand that the agencies/people you are working with are NOT in it for your best interest, but rather their own...it gives you a place from which to analyze their motivations and therefore ask the right questions.

I agree that not everyone can be a financial planner or tax advisor, it's too complex. But I think we can all learn 20% of the knowledge that will apply 80% of the time...then we must know when to ask for help from those experts for the other 20%. And when you do get help, trust but verify everything they say and do. Get two opinions and compare them. Check to see if your planner/agent is certified or whether they have lawsuits pending. Ask friends who they've used and if they are happy. If an agent promises you something, ask them to put it in writing and sign it.

Dave
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Old 08-28-2008, 07:16 AM   #37
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Yeah, but it was a NICE waterfall. Professional athletes are some of the WORST investors I have ever seen. His agent kept calling me and asking for "stock tips", but never gave me any money to invest...........
Was he a good player? Charge him by the RBI.
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Old 08-28-2008, 07:21 AM   #38
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Well, we ALL KNOW about the following:

Certified used GM car
Certified ground beef
Certified produce from foreign countries
Certified mail (who wants to get that usually?)

Are you sure I should be certified? Maybe it's the kiss of death.

Don't worry, I have my MD, phD, MBA, and MS from The Central College of Easter Island all hanging on my office walls.........

I'm thinking about giving back that Finance degree though, since I am obviously underemployed...........
I see certification as nice, but not foolproof. I'm certified in accounting, and I guarantee you that no one could just walk into those tests (4 of them) with no accounting training and pass them. I've seen the CFP test (considered taking it), and there's no way IMO that someone with no knowledge of personal finance could pass it.

I was also at one time ASE certified to work on cars, same thoughts as above.

Now on the other hand, just having a CFP does not make you a great advisor.

I guess what I'm saying is that certification is ONE indicator of knowledge and dedication to the field.
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Old 08-28-2008, 08:35 AM   #39
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I see certification as nice, but not foolproof. I'm certified in accounting, and I guarantee you that no one could just walk into those tests (4 of them) with no accounting training and pass them. I've seen the CFP test (considered taking it), and there's no way IMO that someone with no knowledge of personal finance could pass it.
My wife sat for the CMA exam, that wasn't a piece of cake either.......

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Now on the other hand, just having a CFP does not make you a great advisor.

I guess what I'm saying is that certification is ONE indicator of knowledge and dedication to the field.
I would agree. A know a fair number of advisors that have college degrees in history, or education, even philosophy. A certification like the CFP would force them to learn finance concepts they would need to advise clients.

I have a degree in finance, and a concentration in risk management and insurance. The CFP Board allows you to "test out" of up to 2 modules of the CFP exam if you have the coursework background to support it, which I qualified for. So for me, it's now the commitment to learn a bunch of facts, some useful, some inane, and take the test. I plan on taking it in 2009.
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Old 08-28-2008, 08:37 AM   #40
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Was he a good player? Charge him by the RBI.
I think innings pitched or strikeouts would have been better........

I'd go into more details, but you guys would figure it out, so I'll leave it at that........
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