Undereducated and misdirected in life. Help.

[travelover]

...........I thought I'm paying someone for a service like if I hire a mechanic or a painter that's the job they do for you...........

Here is the epiphany I had. Financial advisers are not necessarily "professionals" and they do not necessarily have your best interests in mind. They need to make money to live and they do it by manipulating your money. Sometimes it is to your advantage, sometimes it is to their advantage. If you haven't made any money in this booming market, I suspect the latter.

Here is the other epiphany I had. It is advantageous to financial advisers to make it sound complicated, but in reality, they are flying blind as the rest of us. If they knew how to make shrewd investments and make money grow quickly, they would be investors not cube rats at EJ. You can do better than average by simply buying a balanced target date index fund and just holding it. Why better than average? Because most people lack the discipline to leave it alone and they try to time the market and jump into gold or chase "hot" stocks. It really is that simple, though I admit it took me too long to figure it out.

 

[WestUniversity]

I would also add an endorsement for the Bogleheads site. Look up a post by Taylor Larimore on the “Three Fund Portfolio”. It’s dead solid simple.

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=88005

Also check out a small book by John Bogle, the founder of Vanguard Investments. The book is called “The Little Book of Common Sense Investing”. It’s a quick read and a solid base of knowledge.

https://www.amazon.com/Little-Book-...ting&qid=1612036948&sprefix=john+bogle&sr=8-3

 

[ut2sua]

Thank you all I really appreciate the advice, I'm trying to learn fast as I can I don't understand why this is an issue for me considering I'm able to figure out trends I know when to invest in things I really just don't know how like I told the investor I wanted to get into gold right before the crash and you told me it's not something we do.

I thought I'm paying someone for a service like if I hire a mechanic or a painter that's the job they do for you

the whole thing confuses me I don't understand why it's an issue for me but I'm just not getting the picture of investing I have most of the tools I have some money and I can't figure it out it's very frustrating.

I'll try to learn what I can and get away from these people but it's like looking at math when you're a kid and you don't understand the problem I don't know how else to explain it it's very bizarre.

I'm sure over the last 6 years with a couple hundred thousand or more I should have been able to figure something out or somebody working for me could have used the money to make me some money.

Plenty of rich people can make money out of a few hundred thousand I'm sure..

The problem is actually very easy (that is why it is hard to implement)
1- Buy the 3 funds (or 1 targeted retirement fund) and hold (see the bogleheads site as someone mentioned earlier)
2- Read a few books recommended by the Bogleheads site (as recommended earlier)
3- The reason to read the recommended books is so one understands why we do #1 above
4- It is easier said than done to do #1 above. So in this case, the answer was given, but it was so simple, we human has problem believing in it. And that is why it is hard to follow.
5- BTW, ignore all the news. Again, this is so you can stay with #1. Good luck

 

[Kamei]

I'd second increasing your Finance IQ on Bogleheads >



"Or get on Bogleheads and look up the lazy man's portfolio.

https://www.bogleheads.org/wiki/Lazy_portfolios"

 

[BoodaGazelle]

It might be worth checking out two things:

1. Boglehead-style investing, which many here do, and
2. Read the book "The Millionaire Next Door"..

Good luck!

 

[target2019]

In case anyone is interested, there is a very similar thread by the OP at:
https://www.early-retirement.org/forums/f44/investing-101-help-107630.html

 

[Graysand]

This is what I don't understand is how to get away from them. Where do I put the last 401K we have with them currently so I'm not paying them fees anymore?

We don't know where to take her 401k that is just sitting out there. I told her to roll it into her current 401k.

But I would like to take our finances to one place and get it figured out I can't seem to do that.

In your place, what I'd do is have ALL the old 401k's (and any investments) moved over to Fidelity rollovers. I like Fido because their website is easy to use, everything is free, and they always help out if you phone them.

Definitely follow the Lazy Portfolio, and use low or zero fee index funds only!. The Fidelity version of the 3-fund Lazy Portfolio is: 40% FSTVX (US stocks), 40% FTIPX (International Stocks), 20% FSITX (Bonds).

ps: I'm not a fan of Edward Jones. Their business plan is to take 1-2% of your money every year, in addition to the fund fees. They are using your money to buy their nice cars and boats.
pps: An annuity is a nice way for you to buy your insurance agent a very nice house in 20 years, while you subsist under the bridge with your cat food.

 

[habelsgtb]

It looks like your expenses are nice and low. To prep for retirement my wife and I looked at our spending and slowly cut back on things to see what we missed doing. No more cable, only Netflix. Going out for dinner or meals is reduced to once a month or less. The rest all home cooked (fun!) Magazine subscriptions cut back to 2. Car purchase was one with 40mpg. No loans etc of course. Groceries- healthy but not expensive. Mostly off the grid (solar is near 100%. Stopped watering and fertilizing my lawn (less mowing!). Kept our 1,700 ft home (30+ years vs upsizing). More being happy and content with what we have. More connecting with family and friends. Making new friends. Good luck!

 

[Jeffman52]

Honestly, the above is painful to read. Six years into one of the biggest bull markets in our lives and you have made no money?!?!?!?! I need to take slow deep breaths, do some calming yoga, and have a few shots of whiskey. Thank goodness my physical isn't today. My doctor would probably call the EMTs and order them to take me to the nearest emergency room. GASP!

I was thinking the same thing as I read this thread. The last 6 years have been crazy in terms of gains in the market.

I use Fidelity and use some of their basic mutual funds to invest in and have done very well with those. I have plans to retire next year.

Education? Don't let that worry you. I never finished HS (got a GED) and my other education is some tech school classes for a couple of years.

 

[Ramen]

@cloud9nd, my assets were very similar to yours when I was your age, about a decade ago. Now they are triple. Your spending is much lower than mine and your SS and pension will be much higher, so you are doing better than I was at 42.

As for saving, as you are planning to do, I socked away $40K+ annually for those 10+ years. For investing, I went with the laziest portfolio of all, a single 60/40 balanced fund. You can do this with the Vanguard Balanced Index Fund (VBIAX). If you go with Schwab, there's the Schwab Balanced Fund (SWOBX, not indexed but with reasonable fees). Or if you go with Fidelity, there's the Fidelity Balanced Fund (FBALX). This approach might seem too simple for some people, but it has worked for me. It's all autopilot, no user rebalancing.

I second the reading recommendations above: John Bogle, bogleheads.org, Millionaire Next Door, etc. My favorite is Your Money or Your Life (YMOYL). Sounds like you have your spending under control, but for anyone who needs help with this, YMOYL can be a life changer. Also for anyone who needs help grasping the concept of money. It includes some basic investing info near the end, which I don't remember now. It's all just a place to start.

 

[Finance Dave]

Did I read it right that you cashed out your 401k and put it in the bank for now? If so, you need to act quickly to avoid triggering a tax event. If I misread that, I apologize. When you move money from a 401k, I recommend doing it via a "trustee to trustee" transfer to avoid any problems...and either Vanguard or Fidelity will help you with that.

Also, you are doing well ...don't be so hard on yourself! As a rule of thumb, take the amount you have saved and multiply by 4% and that's approximately how much you can spend without fear of running out of money in retirement. If you're at $330,000 right now, that's about $13k/year you could spend. And of course you'll be adding to that over future years.

If you've been investing for a long time and made nothing, something is wrong...the markets have been good (of course with ups and downs).

Target fund would be one option, as would a very simple 3-4 fund strategy set up by a reputable financial planner.

You said you wanted to buy gold but someone said "no"? Who said no? If it's an advisor, they can RECOMMEND you don't do something, but cannot force you. That said, gold is a very risky investment and probably not what you should be looking at.

Another suggestion would be to go to daveramsey.com and see if you can use their ELP tool to find an advisor near you that would suit your needs.

It is easy to make some terrible mistakes if you don't have someone to advise you. IMO, an advisor's main purpose is not to tell you exactly what investments to make, but rather to guide you, teach you, and keep you from making major mistakes. For example, I have a mother-in-law that between her and her husband never made more than $40,000/year in their lives.

They had $300k of Treasury Bills. When her husband died, she cashed them all at once and this triggered a large tax bill since the gains were all considered income. Talking with an advisor could have led her to a smarter strategy.

Hang in there and let us know in a few months what you've decided.