How many DIY Investors Do You Know

[youbet]

My son is the only one I know other than myself for certain. I have two cousins I've pointed toward Vanguard to lower their expenses since they asked after receiving an inheritance, so maybe I know two more.


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Although Vanguard is now[-] pushing[/-] offering FA services. Your cousins could be with Vanguard and getting advise from Vanguard.

 

[FUEGO]

I don't know hardly anyone other than my parents that uses a financial adviser. Of course most people I know just stick money in a 401k/457/403b and call it a day. Pretty much anyone I talk to also knows about low cost index funds too.

Maybe it's an age thing (I'm 35; most peers are similar), or maybe I have a positive effect on educating friends and associates on investing. I have extricated at least one person from a 2%/yr fee Ameriprise leech and got them into 0.1x% vanguard ETFs/funds.

 

[Senator]

About half of the people I know use a FA. Most think the FA is some sort of 'expert'. Even some of the stocks they have told me they are in, are no better than the S&P.

It's OK that a portfolio doesn't beat the S&P on the way up, as long as it doesn't beat it on the way down. But when the good stocks don't beat it, it's bad. They even had smaller dividends that the S&P.

 

[rodi]

I know two former coworkers who for sure are DYI - even by Frayne's more rigid definition.... When our division was sold off - I had long discussions with them about the pros/cons/expense ratios/etc of the new 401k plan we were shoved into. You could tell they, like me, were already researching and making decisions - as soon as the info came out - a few weeks before we could start selecting investments...

I know most of my coworkers chose *not* to do the managed investing offered with this 401k... but many did come talk to me about the analysis I'd done on ERs. (I'd marked up the info with ERs, AA's of funds, etc... ) If they asked my advice I gave them canned answers - go with a target fund or split between the vanguard total stock (the only fund offered that had super low ER) and the stable value fund in some AA that made them feel good. (For must I suggested 60/40).

Of my family non-worktype friends... My sister and cousins use FAs. My 2 in laws that have assets to speak of use FAs (and one has bought too many annuities). Another has everything in CDs at the bank.

One friend was totally DIY - but when he got a large settlement (mega million?) he decided to go with a FI at that point.

 

[razztazz]

I'm the only one I know

 

[Which Roger]

We will agree to disagree or on a scale of 1-10, 10 being a true DIYer I would give the 401K crowd a 5. Unless they could meet the criteria above, knowing fund name, exp. ratio, managed or index.

I have seen too many people only contribute to a 401K because it was encouraged by their HR department and were absolutely clueless as to what they owned.

By these criteria, I think most of us were once 5s, and are now 10s or close to it. For years, I contributed a lot of money to my 401k, but it was not until I was about 40 years old that I took an interest in investing and learned about concepts that now seem very basic to me like asset allocation, risk tolerance, fees, and rebalancing.

What I'm getting out of this thread is that we don't know very many informed DIYers, but we know a lot of uninformed DIYers and a lot of people who pay financial advisors. Personally, I have no idea how the vast majority of my acquintances handle their investments. I can occasionally infer something when somebody makes an offhand comment, but I never have deep discussions with one or two exceptions.

 

[jguild2120]

We grow our own, always have. We B&H. We started buying stocks in 1975. We held, held and held some more. Through ups and downs. Never sold until after retirement when we started taking out small amounts to supplement a pension and SS. Our very hard work through the years and our buy and hold approach to investment turned this poor couple, from the wrong side of the tracks, into multi millionaires. Anything we needed to know about managing money, investments and taxes we learned from books ourselfs. And, we are very proud of it thank you.

 

[hnzw_rui]

We actually have fairly decent risk-based asset allocation fund options in our 457 (Conservative, Moderate, Aggressive; ER 0.3-0.4%). Those are pretty much what most of my co-workers invest in.

 

[DrRoy]

I had a FA for part of my investments for 10 years. The money that I managed did better than what he did so I took it all back myself.

 

[Whisper66]

Virtually everyone I know uses a FA. Generally they are smart folks that either know very little about finances or just prefer to spend time doing other things and are happy to pay someone to handle their finances.

I'm the odd one out since I don't use one. But I like fiddling around with finances as well as saving the money for fees so DIY makes sense to me.

Different strokes for different folks.

 

[Dawg52]

I don't know any in person, just a bunch here anonymously. Thank goodness for this place!

Same here. I don't talk to my friends about investing. Well except for one and he's an early retiree as well. But that's it.

 

[harley]

Only if they know the name of the fund, exp. ratio and if it is an actively managed fund or and index fund.

Hell, I don't know my fund names or expense ratios, and especially not the ticker symbols, and I'm definitely a DIYer. I can look them up if I want the exact name or ratio, just like I look up anything else I want to know. I have too few working memory cells to waste them on things like that. Luckily I can still remember the passwords to sign on and look them up. Of course I have a password keeper for when those cells give up the ghost.

 

[pb4uski]

I'm not sure because the subject doesn't come up very often.

Little sis and BIL recently sold their business and I was encouraging them to DIY or at least avoid a bad FA but they ultimately went with an FA they claim is good. I have a friend who was considering retiring who I was talking with and I recall her mentioning having an FA as do a couple of my golf buddies for whom it came up in conversation.

Other than DD because I steered her that way, DS and DM because I do it, no DIYers come to mind but there but i just don't know one way or the other. Actually, I think my uncle is DIY as well, so there is at least 1.

 

[donheff]

Pretty much everybody at every megacorp. They pick something for their 401k funds and let it ride. Wouldn't that count?

+1. That is the reality of it. Most people just go with some early suggestions and wake up in their mid 50s when retirement looms. That is why we could use some much better defaults on these plans, opt out full participation, coupled with lifestyle funds are possible defaults that could help. There may be better approaches.

As to the original question, like several others the only conscious DIYers I know are on this forum. The rest are either unthinking 401Kers or woke up at some point and went with an FA -- maybe that would be more accurately half woke up. I did the later in my 40s and the full DIY after stumbling on this forum.

 

[Fedup]

All of my brothers and sister do not use FA. They all did very well.


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[littleb]

Pretty much everybody at every megacorp. They pick something for their 401k funds and let it ride. Wouldn't that count?

When I worked for a megacorp everyone (including me) would hear about a fund or two and invest money there. No knowledge of investing at all. Word of mouth. Fidelity Magellan was the king back then.

Nobody in my family nor friends are involved in investing. Most of them are not interested in learning where to put their money.

I was told by a family member that I am obsessed with money. Maybe that is how DIY's are viewed by people who are not interested in saving or investing money wisely.

 

[Midpack]

I said I don't know any personally. I probably should have said - I am sure some of my friends/acquaintances are FI, but since I/we never talk money-investing, we'd never know...

 

[RunningBum]

At least some of my former co-workers were DIY. I didn't know of any that used an FA, though it's harder to tell. Those of us that were DIY (core group of 4 or 5 in my work group) tended to find each other and discuss investments in hall talk. I don't know if others had an FA, didn't have money to invest, didn't want to be influenced by us, or just weren't interested in buying individual stocks like we mostly were.

From what I gather of ski friends and neighbors, I can think of at least 2 right off the bat who "have a guy", and 3 who seem to be DIY. Now I'm the guy who's not investing in individual stocks so I'm not really involved in their talks, but I do hear them talking about stocks. Could be they have an FA but they seem to be evaluating a lot rather than just talking about what they own. I seem to have brought one over to VG index funds.

 

[youbet]

I seem to have brought one over to VG index funds.

I respect the strength of the Boglehead cult. But it seems many of the followers attach an importance to exclusively using the Vanguard brokerage that surpasses my common sense test. But that's just me.......

Do you think a DIYer can do OK using no load, low cost index funds while keeping his/her money at some other broker or does it have to be VG out of reverence for Bogle?

 

[gerntz]

I'm familiar with the FA status of 5 retired co-workers + me. It's 3 & 3.

 

[RunningBum]

I respect the strength of the Boglehead cult. But it seems many of the followers attach an importance to exclusively using the Vanguard brokerage that surpasses my common sense test. But that's just me.......

Do you think a DIYer can do OK using no load, low cost index funds while keeping his/her money at some other broker or does it have to be VG out of reverence for Bogle?

Oh, I don't care, VG isn't the only game in town as far as I'm concerned, even though that's where I am with just about everything. I can't even recall if I said it was VG that I'm using. I just remember saying that I tracked my individual stocks against my index funds and found over a pretty good time period that I couldn't beat them, so I stopped trying and over time got out of all my stocks. He must've taken a look at his own returns and found the same because he told me a year or two later that he was pretty much doing the same.

 

[Walt34]

Other than people here I can't say I know of any for sure. One BIL (the brighter one) mentioned once that he invested in a target date fund so I don't know if that qualifies as "DIY". But at least he's not going to make any horribly bad mistakes that way. And he's retired federal CSRS so it's almost certainly in TSP and very low fees.

My younger sister I think handles it herself but we haven't discussed it so I don't know for sure. She's about the same as me on the frugalness scale and is pretty independent-minded so if I had to bet I'd think she handles it herself.

 

[rodi]

+1. That is the reality of it. Most people just go with some early suggestions and wake up in their mid 50s when retirement looms. That is why we could use some much better defaults on these plans, opt out full participation, coupled with lifestyle funds are possible defaults that could help. There may be better approaches.

I was impressed that when we were forced to roll our 401k funds from former employer to new employer (after an acquisition) the default fund was a target age fund based on your birth year. This turned out to be a decent default.


Unfortunately, not all 401(k)s are the same. DH's final employer had one of the crappiest I'd ever seen... Not only high ER's on the funds - but front and back loads. Not an index fund in sight. He contributed enough for the match - and that was it. I wrote about it here: http://www.early-retirement.org/forums/f28/wwyd-husbands-craptastic-401k-plan-63390.html

 

[harley]

I respect the strength of the Boglehead cult. But it seems many of the followers attach an importance to exclusively using the Vanguard brokerage that surpasses my common sense test. But that's just me.......

Do you think a DIYer can do OK using no load, low cost index funds while keeping his/her money at some other broker or does it have to be VG out of reverence for Bogle?

I think the reason for the Bogle cult is that not that long ago there weren't really any comparable low cost index funds. Twenty years ago Fidelity had fairly high costs, although definitely lower than EJ and LPL and others like that. VG was the firstest with the bestest, and developed quite a strong following.

Of course there are other options now, and anyone can choose to use whichever brokerage works best for them. But I don't think VG and the bogleheads can be dissed for being true believers. It's like all the denominations of the Protestant church. Pick your brand, but be aware that they wouldn't be there without the Catholics.

 

[MRG]

I think the reason for the Bogle cult is that not that long ago there weren't really any comparable low cost index funds. Twenty years ago Fidelity had fairly high costs, although definitely lower than EJ and LPL and others like that. VG was the firstest with the bestest, and developed quite a strong following.

Of course there are other options now, and anyone can choose to use whichever brokerage works best for them. But I don't think VG and the bogleheads can be dissed for being true believers. It's like all the denominations of the Protestant church. Pick your brand, but be aware that they wouldn't be there without the Catholics.

+1
Bogle changed the good ole boy fund industry. I'm sure he has a lot peers at other funds that really tried to make him fail. I do hold Vanguard funds in my 401K, the money I manage is at Fidelity.

I do think Vanguard is a good place for the average person with little investment knowledge to get a descent value for cost. I've seen some pitches from Fidelity that feature high fee funds, no index funds. Other than missing FE loads and 12B1 fees the cost would make old ed jones happy.