The Unspoken Reality

[QT]

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?

What books, websites, or software helps you understand and deal with these chores? Do they seem like chores, or is it easy once a methodology is established?

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

Does it feel like the more money you have, the less comfortable you are with handling these details?

Thanks for your thoughts!

4 years and counting down!!

QT

 

[SecondCor521]

Probably an average of 25-30 hours per month, but most of that I find enjoyable so I don't care. I could easily spend as little as 1 hour per week if I weren't addicted.

Websites I use are this one, Online Coupons | Cash Back, simpleliving.net, vanguard.com, irs.gov. I use Quicken and Excel on a Wintel laptop PC. It's an easy chore ;-).

I wouldn't pay a fee; I'm a cheapskate.

Nope.

2Cor521

 

[dex]

Second post - I feel a troll coming on!

 

[Spanky]

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

Simply no.

 

[QT]

No, not a troll at all.

I'm just someone who feels like it is all a lot of work, that I don't have the skill set or time to deal with doing it properly, and feeling even less so as I accumulate more $$.

But at the same time, I'm a cheapskate and I'm torn about paying big bucks to have someone else do the thinking and work for me.

QT

 

[REWahoo]

Can you please comment on how much time per month you spend on research, tax angling, monitoring, bookkeeping, rebalancing, etc?

As in anything you take on in life, you can make it as difficult as you want or as simple as possible. I opted for the simplicity track and probably spend 3-4 hours a month on average.

What books, websites, or software helps you understand and deal with these chores? Do they seem like chores, or is it easy once a methodology is established?

No books, at least not once I entered into retirement. Websites are primarily this one and Vanguard.com. The only software I use is Excel to track spending. I don't look at any of this as a chore since it is managing the financial success of my retirement, something very near and dear to me.

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

Only if I became mentally incapacitated. (Think about that one...)

Does it feel like the more money you have, the less comfortable you are with handling these details?

Just the opposite. As my nest egg grew I became even more convinced that it should be managed by someone who cared more about nurturing and growing it than anyone else on the planet...me.

 

[QT]

And I think I'm totally confused about how to keep track of hundreds or thousands of purchase prices, gains, etc. years after I've bought various funds, and thus and also confused about how to deal with selling them at the lowest tax consequence.

Thanks,
QT

 

[M Paquette]

Can you please comment on how much time per month you spend on research, tax angling, monitoring, bookkeeping, rebalancing, etc?

What books, websites, or software helps you understand and deal with these chores? Do they seem like chores, or is it easy once a methodology is established?

Maybe 2 hours a week, including tracking all expenses, updating a very passive portfolio (mostly stock index and bond funds). I put everything into Quicken, and periodically generate a paper statement and backup CD. Rebalancing is done once a year, using a spreadsheet. Updating the spreadsheet takes maybe 10 minutes, and typing in the orders to rebalance takes maybe 5 minutes.

Preparing a tax return takes a few days once a year, but that's a tax return. I'd have to do that no matter what.

There are lots of good references on how to manage a portfolio over at the Bogleheads web site, Bogleheads :: Index Check out the reading lists.

Paul Merriman's FundAdvice.com web site at FundAdvice.com - Retirement also has some good articles on managing a retirement portfolio.

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

No. I feel that in order to be comfortable with something done by myself or by someone I hire, I need to understand it, and once I understood what was needed to manage a portfolio I was perfectly comfortable doing it myself. Even if I hired someone, I'd want to understand what they were doing and what the best practices are just to avoid being snookered. Besides, at a 4% safe annual withdrawal rate, giving up that 1% for a planner cuts my take down to 3%, a substantial pay cut. No sir, I don't like it.

Does it feel like the more money you have, the less comfortable you are with handling these details?

No, it is just numbers. Once I was comfortable with managing my portfolio, seeing it grow over the years didn't make me nervous.

 

[audreyh1]

VERY LITTLE - less than an hour per month.

I'd say no more than 10 hours a YEAR.

The thing is, Quicken does most of the work. And then I have a couple of automated spreadsheets. That's one major why so little time is required.

Now, if you are talking about initially figuring out your investment plan and choosing funds, etc. That's considerably more time consuming for the first couple of years.

No, the more money I had, the more I became determined to learn how to manage it myself.

Audrey

 

[audreyh1]

And I think I'm totally confused about how to keep track of hundreds or thousands of purchase prices, gains, etc. years after I've bought various funds, and thus and also confused about how to deal with selling them at the lowest tax consequence.

Thanks,
QT

Quicken, or equivalent.

Also, your brokerage should be able to provide everything you need here as well. Fidelity does a spectacular job of this.

Audrey

 

[growing_older]

I think I would need to spend as much or more time checking up on the "professional" to make sure I wasn't being taken advantage of. Until I'm too old to make good decisions, I cannot see this being a viable option for me.

 

[unclemick]

No, not a troll at all.

I'm just someone who feels like it is all a lot of work, that I don't have the skill set or time to deal with doing it properly, and feeling even less so as I accumulate more $$.

But at the same time, I'm a cheapskate and I'm torn about paying big bucks to have someone else do the thinking and work for me.

QT

That's ok - let me put on my faux troll hat (made from brand name tin foil which is actually aluminum).

1. You don't need to manage anything at all - that's the big lie. Think pssst Wellesley if you are old enough for old school or Target Retirement Series if you be modern (theorywise). Full auto works just fine. Weenies are active mangers. Those with guts and faith remember:

'God Looks After Drunkards, Fools, and The United States of America.'

2. Collecting data for Turbo Tax/Tax Cut/account/do it your self once a year(or estimated taxes) is a pain - but maybe that can be better automated(I'm all ears).

Other than weenies - there is this thing called hormones which afflicts a certain percent(usually male).

I won't bore you with my sad tale of two file cabinets of DRIP plans.

Never the less - theorywise - it only takes one, on full automatic and keep your expenses down.

heh heh heh - yours truly - less than pure theorywise - with a Curmudgeon certificate. Oh BTW - Happy New Year

 

[A854321]

1.0% of assets under management? You must be kidding. That is an enormous fee.
I could get far better service from Vanguard for 0.2%, should I decide I need a custodian to take care of me like that.

I can get some binders, a calculator, a file cabinet, and software from Office Depot. My CPA does my taxes and keeps track of those other pesky accounting issues I seem to keep overlooking.

To inquire about a fee of 1% on this board shows you are either a troll, completely oblivious to low-cost investing (Boglehead) method, or are a recently fired financial manager from a Big Splashy Brokerage.

 

[maddythebeagle]

Would you pay a 1% (or less) fee to have someone else (competent, professional, and in your corner) deal with all this stuff?

I think if you actually read some of this board, you would find a lot of DIYers not only on the financial side but in general

I agree with Dex, this thread sounds like a sales pitch....

 

[Nords]

If you're living on a 4% SWR and your financial "advisor" is getting a 1% fee, that means you'll be turning over a quarter of your annual income to someone else. I think you'd sort out your priorities rather quickly on that math.

And I think I'm totally confused about how to keep track of hundreds or thousands of purchase prices, gains, etc. years after I've bought various funds, and thus and also confused about how to deal with selling them at the lowest tax consequence.QT

Not sure I understand the problem.

Spouse and I track all our spending in Quicken, which takes about 5-10 minutes a day and maybe another hour a month looking at reports or otherwise tweaking the data. 15 years of that routine has generated over 100,000 transactions which are generally useful for questions like "What's your 5-year ROI?" or "How'd we do on the budget this year?" or "The fire is out; secure from fire & general emergency. How old was this $%&^ing dishwasher anyway?"

So unless you're daytrading like a hypercaffeinated bunny rabbit, I doubt you're gonna pile up as many transactions as family Nords. But put them into Quicken or a spreadsheet one at a time and keep backing up the data. The websites of major fund companies (Fidelity, Schwab, Vanguard) usually track this data too.

Another interesting phenomenon has been our trading activity. When we were working we were DCA'ing every two weeks (occasionally more frequently) and selling only to rebalance or make allocation changes. In ER we're not buying anymore and we're selling even less frequently. Our annual number of transactions has dropped off by at least half.

Finally if you're selling shares of funds held in a 401(k) or IRA then it's all counted as income anyway and cost basis may not be relevant.

When you're ready to sell, your software (or the fund company's data) will tell you whether you're better off selling individual shares (almost always the lowest tax) or average cost (almost always the simplest method). They may even have a trade calculator that uses your particular cost basis.

 

[CyclingInvestor]

I spend a few hours each week on investment tracking, research, and taxes. I am 49, retired,
and keep all $$ in individual stocks.

I use Excel for all tracking, and I find it relaxing. I could do it in far less time if desired.

I would not trust anyone else to do it for free, much less for 1% each year.

Having more $$ does not make me less comfortable handling it.

 

[A854321]

QT- you need to find a clientele that has much larger net worth, unrealistically ambitious investing expectations, little judgement, even less free time, and a need for ego-boosting. You will only need one or two whales to make a very plush living.

I think you should find an investment board for physicians. Many would fit that profile.

(Apologies to ER physicians on this board- but you know what your colleagues are like!)

 

[cute fuzzy bunny]

Only if I became mentally incapacitated.

Sooo...

Ohhhh...I see what you did there...

 

[waltwill8]

Can you please comment on how much time per month you spend on research, tax angling, monitoring, bookkeeping, rebalancing, etc?


Waay less than I did working

By the way, Is anyone like me - still using Managing Your Money version 12 (for DOS)? Boy am I cheap!

 

[kcowan]

Outsourcing your portfolio makes as little sense as outsourcing your budget and with the same expected results. The only thing we outsource in retirement is housecleaning and car cleaning. Yearly cost is equivalent to .5% MER on $500k and worth every penny to us.

 

[free4now]

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.

 

[cute fuzzy bunny]

Does posting here count as time spent managing your finances?

 

[Gotadimple]

Does posting here count as time spent managing your finances?

Yes. Its an 'education.'

--Rita

 

[old woman]

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.

 

[Ed_The_Gypsy]

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.