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Old 06-26-2013, 10:28 PM   #21
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Thanks pb4uski! This sounds perfect! I love the funds Vanguard offers, but don't know how we should blend them. It's great we can get that service from them for free, or pay them 0.7% for constant hand holding should she prefer to start with that. Free or low cost advice directing the money to low expense, high quality funds is exactly what I was hoping to find... and getting me off the hook for a market downturn is an added bonus Thanks everyone, I'll continue to watch any responses and do my research, but this has already been hugely helpful.
Given the amount involved she could probably get a free annual fp session if she wants and avoid any fp fees at all. Once she decides what to put it in an annual checkup should be sufficient.
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Old 06-26-2013, 10:37 PM   #22
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So it's clear where you stand. Not many people are going to find it easy to align with you on this. Just imagine it in a movie.

But if she has no family or girl friends, maybe she won't find out how others see this.

You can hope anyway.

Ha
Your point certainly isn't lost on me. I try to remind myself constantly it's not my money, and that I have to be careful here. Her family is a difficult situation, and she doesn't talk to them much. I am quite sure she will get advice from her trust officer, and he has already expressed his happiness in her willingness to invest this time around. To be quite honest, I would be ok with her not drawing a dime of money for 10 years from an investment, but she has already made it clear she wants to use some of this money to ease our living situation. I really do understand and appreciate where you're coming from. She's expressed how, generally, she wants to use the investment, and I'm just trying to give her the tools to make the right decision. That's why I suggested EJ, and will now probably track back to advisers at Vanguard/Fidelity. I have definitely suggested she talk to her officer about this too, but will be reiterating that one now. Appreciate the input.
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Old 06-26-2013, 11:44 PM   #23
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Your point certainly isn't lost on me. I try to remind myself constantly it's not my money, and that I have to be careful here. Her family is a difficult situation, and she doesn't talk to them much. I am quite sure she will get advice from her trust officer, and he has already expressed his happiness in her willingness to invest this time around. To be quite honest, I would be ok with her not drawing a dime of money for 10 years from an investment, but she has already made it clear she wants to use some of this money to ease our living situation. I really do understand and appreciate where you're coming from. She's expressed how, generally, she wants to use the investment, and I'm just trying to give her the tools to make the right decision. That's why I suggested EJ, and will now probably track back to advisers at Vanguard/Fidelity. I have definitely suggested she talk to her officer about this too, but will be reiterating that one now. Appreciate the input.
It's great that you want to assist her. You mentioned that she wants to pay cash for the house "just in case". I think too that "just in case" you need to protect yourself as well. Se can afford to share expenses, and that is what you should consider so that you can maximize your retirement savings. You really do not know if your job will be 10 months or 10 years in duration. And if she were to die before marriage, unless she has a will, where does at leave you? Prenup is another matter that may come up down the road.

The advice to go slow, and use vanguard is well advised.
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Old 06-27-2013, 12:44 AM   #24
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Your point certainly isn't lost on me. I try to remind myself constantly it's not my money, and that I have to be careful here. Her family is a difficult situation, and she doesn't talk to them much. I am quite sure she will get advice from her trust officer, and he has already expressed his happiness in her willingness to invest this time around. To be quite honest, I would be ok with her not drawing a dime of money for 10 years from an investment, but she has already made it clear she wants to use some of this money to ease our living situation. I really do understand and appreciate where you're coming from. She's expressed how, generally, she wants to use the investment, and I'm just trying to give her the tools to make the right decision. That's why I suggested EJ, and will now probably track back to advisers at Vanguard/Fidelity. I have definitely suggested she talk to her officer about this too, but will be reiterating that one now. Appreciate the input.

I would be careful with the trust officer.... they are employees of a bank and their job is to get new money... and they CAN be more expensive and worse investors than Edward Jones.....



I do not see where you helping out is bad... heck, are you not supposed to help out people you love Now, if you come across as money grubbing, that is another story....


The suggestions of a Vanguard rep or Fidelity rep is good... but they might not make a decision based on the facts given... this is not money that is needed for retirement... so it should be used to make current living conditions better... I would invest it differently today knowing that another big chunk is coming years from now....


As for your retirement account... yes, I should have said that in my earlier post... you always have to plan for a bad outcome.... if you two split for any reason, you need to have something set aside for your retirement... with her money there to support current spending, it should not be a big issue...
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Old 06-27-2013, 03:32 AM   #25
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With her money managing skills I would think at house + 5 digit emergency fund + immediate annuity. It would provide app. 3K/month and cannot be spent in a whirlwind.
That + mortgage free living space + small salary is not too bad to have.
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Old 06-27-2013, 09:22 AM   #26
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Dealing with the 800K of assets is one thing (is this in addition to the paid for house?) but if her history is to "blow" all her money, and the trust officer isn't anxious to advise (babysit?) her and earn fees it sounds like the real work is on the spend side versus the invest side.

I am sure as the boyfriend the last thing you want to do is become the police officer on the budget, but if she wants to master her finances, then addressing the spend side will give her a MUCH clearer picture of how much income she will need from the 800K, and how to invest it.

Depending on her nature, I might suggest to her that the satisfaction of getting her "stuff" together in terms of finances would be probably more gratifying to her than just about anything else.

Not an easy thing to approach from the balancing power, respect, privacy and so on in the context of a relationship. From one Dave to another, good luck.

I'd echo the comments to stay focused on your career too.

PS - 1/3 Index 500 or total stock market; 1/3 broad bond index; 1/3 cash and cd's would be a conservative starting point. Or half cash, half wellington.

I'd do the budget by pulling two years bank and credit cards and build the budget based on actual spend, not wished spend.
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Old 06-27-2013, 10:07 AM   #27
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I would be careful with the trust officer.... they are employees of a bank and their job is to get new money... and they CAN be more expensive and worse investors than Edward Jones.....



...
This is very true. I once did an HR audit of a bank and looked at the trust officer position. The bank rewarded the job based on the money they brought in for management, not the quality of the management. Their investments were very 'conservative', as in bonds and CDs. They were very concerned about preserving principal, not growth.

If the GF doesn't want to learn about investing right now then she should choose Wellington and leave it to folks who have been doing that for years. Once she has a plan she can redirect it as meets her needs.
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Old 06-27-2013, 10:20 AM   #28
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Please read the book Sudden Money by Susan Bradley.
And try very hard to get her to read it as well.
It may seem simplistic at first, but the advice given is very sound.
There is also a website that I've used as a resource in the past,
SuddenMoney | Financial Transition Planning ExpertsSudden Money | Financial Transition Planning Experts We make financial transitions less stressful, more productive and frequently enjoyable.
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Old 06-27-2013, 10:20 AM   #29
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Yeah, I definitely will be contributing to my 401k. I will probably also increase that amount or open a separate personal account now that I will be able to afford to do so. Sesq, the 800 is after the paid for house and furnishings and plenty for spending on "whatever". I see it as fairly conservative and could be higher. And definitely the spending part is what scares me more than anything. If she gets that money invested and receives checks as part of annuities/dividends/whatever that isn't necessarily eating into principal then that will be a huge relief. Thankfully she seems want to go down that road. I'm definitely taking note of the common suggestion for wellington as well. Thanks all, the struggle to find that line between advice and "too much" advice is very real
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Old 06-27-2013, 12:02 PM   #30
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I suggest reading the Millionaire Next Door. Your GF sounds like she is from a super wealthy family that didn't have to watch the pennies, but her net worth, at least for now and at her age, is more along the lines of small business owners / two income professional households / doctors with good savings habits. These types of households often still do watch the pennies and shop at Costco. IIRC, in one chapter they authors poke fun at bank trust officers for having caviar tastes when their target clients were more beer and sandwich types.

Talking to Fidelity or Vanguard isn't a bad start, but in my experience they will discourage you from making investments in products that are commission free, like TIPS and I bonds. So really in the long term there is no substitute for asking questions on forums like this as you know more and more about investing, and doing your own research.
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Old 06-27-2013, 03:58 PM   #31
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To get an idea on spending, you could do a firecalc set for twenty five years with zero final balance.
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Old 06-27-2013, 10:43 PM   #32
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Reading the comments I noticed most "Bogleheads" and "Vanguard".

One is the best place to get unbiased financial information, and the other is the best place to invest your money.

29 is young. There's a lot to learn. Reading about finance will pay real "dividends" the rest of your life.
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Old 06-30-2013, 07:27 AM   #33
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Yeah, I definitely will be contributing to my 401k. I will probably also increase that amount or open a separate personal account now that I will be able to afford to do so. Sesq, the 800 is after the paid for house and furnishings and plenty for spending on "whatever". I see it as fairly conservative and could be higher. And definitely the spending part is what scares me more than anything. If she gets that money invested and receives checks as part of annuities/dividends/whatever that isn't necessarily eating into principal then that will be a huge relief. Thankfully she seems want to go down that road. I'm definitely taking note of the common suggestion for wellington as well. Thanks all, the struggle to find that line between advice and "too much" advice is very real
I'm really boring, I'd just split the money 50/50 between Vanguard Wellington and Wellesley Fund, invest it directly with Vanguard, and have them reinvest gains and send dividends. It would give around $1650/mo to start and the amount it pays out will grow every year.

Good luck with the advice line, just try to make sure she wants a recurring monthly income and then everything else is easy. There are hundreds of way to accomplish the recurring income, but no way to replace the money if its all spent.
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Old 06-30-2013, 02:36 PM   #34
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Stick with Vanguard, much cheaper than anyone else, have them do a free financial analysis and see if her entire trust could be moved there. Their rates go down to 20 basis points after the 1st million and that is cheap. Trusts can be complicated, however, and you have possible federal, state and inheritance taxes to look at.

Remember it's her money, however. I'd also look for a certified financial planner that would work on an hourly basis, spend a couple of hours with a good estate lawyer or CPA and tell your girl friend that your 1st responsibility is to find her good advisors but the last thing you should do is attempt to be that advisor.

I've had close friends in very similar trust fund situations. Whenever the significat other or spouse got involved as an "advisor" a conflict arose. Don't get too involved in advice.......you may be sorry, regardless of your good intentions, if you do.

The very best of luck, I really hope the two of you have a good life together.
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