How many totally manage their own nest egg?

[allegra3201]

I do my own investing and taxes. I did consult with Schwab when moving my 401k from employer's account to IRA with them. I've been pleased so far with the no pressure advice I have received.

 

[ajs56]

Using index funds makes self-management possible - all you'll really need to do, after determining which funds and your allocation to them, is to re-balance periodically.

I manage all our finances myself, but, importantly, I've also identified a FA my wife could work with after my death, should I die before her. This is a person I trust and who is familiar with my approach.

+1

This pretty much sums it up for us as well. We did visit once with a fee based FA to reassure my wife that I had half a clue managing ours. Turns out I did! He couldn't add any value to what I was already doing. But the fee was worth it to put her mind at rest.

 

[mickeyd]

Like other wise DIY investors, we have never squandered our stash by hiring a FA and indexing our RI in a few VG accounts. We have ridden it up and ridden down. Riding up is better but, my 45/45/10 AA allows for a smooth ride in any direction. Simplicity still rules in the mickeyd house.

 

[allstock]

You lost me at "what you may see as a great yearly return is likely what I pull out in a week." Classic internet bravado.

And then recommending whole life as opposed to term to a group of people who are actively planning for retirement? Pfft. Take the money you spend on whole life premiums, subtract the cost of a similar term life policy, invest the difference in an index fund and see where you're at. You're WAY better off with a term policy. If you're properly planning for retirement, the invested savings listed above alone will be worth far more than a whole life policy will be by the time a term life policy is up.

And then recommending an annuity? As a former life, health, and annuity insurance salesman, I'm going to guess you also drank the kool-aid? The only people I've ever known who recommend whole life and an annuity in the same breath are people working on commission to sell these products (like I once was). Oh, and the company I worked for instructed us to identify as 'advisers' or 'planners' instead of salespeople, which we actually were.

I had 10+ in the industry with the series 3,31,7,6(redundantly),63,66 & 57 life and health; with a few professional designations that are just feathers in the cap. I started trading the rbob & euro, became a full-service FA then transitioned back to proprietary trading derivatives. After that it was a decision to stay on board and watch my bar raised every year and/or take a head trader position. I'm nowhere near retirement. I made enough in bonuses alone; had experience and knowledge to trade on my own minus stress, politics and freedom to be nimble in the markets. A lot of young traders leave after a few years and travel the world or move onto different business ventures or professions. I've also seen a lot of really bright people realize it isn't what they thought it would be. And a trader takes himself out of the element doesn't mean he's going to do well, there's a learning curve even then. I'm definitely not the smartest person and I owe a lot to my background I believe.

I don't invest per se. You won't ever utilize the markets the way I do. I use currency futures and spot more-so. I rarely leave a position open overnight, my trades usually last a few minutes to hours. I place 1, maybe three round turn a day. Even my tax implications are different. A good week is around five percent. I see double digit in between and I've gone months without a weekly loss. I passed the three digit percentile back in March and I compound. Doesn't go my way all the time and there are independent traders much better than me. I know when to let off the throttle. Wouldn't trade it for the world...unless the world gives me some serious passive income...haha

There's a world of securities that the general investing public does not know about either. I made my fixed income clients' bear market with one product. A guaranteed 10% first year and a return based off a calculation between the 10 and 30TR with a third Libor leg. It was called back at the promised par with a 14% return AND it was FDIC insured...I doubt any of the FA and IAR's here know what it was let alone get this kind of product. You get what you pay for in the securities world.

The above goes for insurance. I don't need to explain all the benefits of whole/permanent life. But if your belief is "buy term and invest the difference" well - usually that's because you don't have enough of the difference. My clients may have been a bit more upstream, that's not to say it's a strategy only for higher brackets. From the statements I've seen disability, permanent life and annuity products alike are for people that have a lot invested in their lives...literally.

There's a fundamental flaw in just relying on the rate of return. Just like to a trader time in the market is money to be made or lost. Once that time goes away it's gone. I really hope for all the good people out there that market cooperates while you draw off your nest.

You read all the financial news and analysts trying to decipher why's and what's of a pull back....what investors aren't aware of is each time this happens, water is being tested. The traders; live, algo, hedgefunds...all of them are primed to start the short waves. It's just the nature of things. Forget the reasons, the cycles, the pricing or even the conspiracy theories. Preventing it is like trying to stop the winter - it just has to happen and it will. You aren't going to know whens and how longs. If it's big enough and you have a discretionary free cash, wait till the world is about to fall apart. Wait for the govt to start bailing out. That itself is the biggest form of manipulation. Then you start buying all the big and valuable names that got smashed somewhere along the line you'll be sitting very pretty - I promise. That's the only trading home investors should be doing.

It's really good to see people here taking a hold of their finances. One thing that interets me is that Wallstreet is finally succeeding in bringing in the millennial money with robo advisors and no fee brokerages. I don't have the numbers exactly, but that money is a big target for panic selling.

Being strictly a life and health salesman just doesn't cut it. I'm sure there's quite a few successful ones, but many were plate lickers.

I've said enough.

 

[GR111]

A few decades ago I had a full service broker. I will never forget him, good mentor for a younger me. But Since he passed in the mid 80’s I have been on my own and done just fine, FIRED at age 56. Today is the golden age of investing and it’s not as hard as some would have you believe. Look at asset allocation, index funds, have a few stocks on the side if you want, and read Old Shooter’s recommend books and also read retire happy wild and free. Best of luck!

 

[dirtbiker]

I had 10+ in the industry with the series 3,31,7,6(redundantly),63,66 & 57 life and health; with a few professional designations that are just feathers in the cap. I started trading the rbob & euro, became a full-service FA then transitioned back to proprietary trading derivatives. After that it was a decision to stay on board and watch my bar raised every year and/or take a head trader position. I'm nowhere near retirement. I made enough in bonuses alone; had experience and knowledge to trade on my own minus stress, politics and freedom to be nimble in the markets. A lot of young traders leave after a few years and travel the world or move onto different business ventures or professions. I've also seen a lot of really bright people realize it isn't what they thought it would be. And a trader takes himself out of the element doesn't mean he's going to do well, there's a learning curve even then. I'm definitely not the smartest person and I owe a lot to my background I believe.

I don't invest per se. You won't ever utilize the markets the way I do. I use currency futures and spot more-so. I rarely leave a position open overnight, my trades usually last a few minutes to hours. I place 1, maybe three round turn a day. Even my tax implications are different. A good week is around five percent. I see double digit in between and I've gone months without a weekly loss. I passed the three digit percentile back in March and I compound. Doesn't go my way all the time and there are independent traders much better than me. I know when to let off the throttle. Wouldn't trade it for the world...unless the world gives me some serious passive income...haha

There's a world of securities that the general investing public does not know about either. I made my fixed income clients' bear market with one product. A guaranteed 10% first year and a return based off a calculation between the 10 and 30TR with a third Libor leg. It was called back at the promised par with a 14% return AND it was FDIC insured...I doubt any of the FA and IAR's here know what it was let alone get this kind of product. You get what you pay for in the securities world.

The above goes for insurance. I don't need to explain all the benefits of whole/permanent life. But if your belief is "buy term and invest the difference" well - usually that's because you don't have enough of the difference. My clients may have been a bit more upstream, that's not to say it's a strategy only for higher brackets. From the statements I've seen disability, permanent life and annuity products alike are for people that have a lot invested in their lives...literally.

There's a fundamental flaw in just relying on the rate of return. Just like to a trader time in the market is money to be made or lost. Once that time goes away it's gone. I really hope for all the good people out there that market cooperates while you draw off your nest.

You read all the financial news and analysts trying to decipher why's and what's of a pull back....what investors aren't aware of is each time this happens, water is being tested. The traders; live, algo, hedgefunds...all of them are primed to start the short waves. It's just the nature of things. Forget the reasons, the cycles, the pricing or even the conspiracy theories. Preventing it is like trying to stop the winter - it just has to happen and it will. You aren't going to know whens and how longs. If it's big enough and you have a discretionary free cash, wait till the world is about to fall apart. Wait for the govt to start bailing out. That itself is the biggest form of manipulation. Then you start buying all the big and valuable names that got smashed somewhere along the line you'll be sitting very pretty - I promise. That's the only trading home investors should be doing.

It's really good to see people here taking a hold of their finances. One thing that interets me is that Wallstreet is finally succeeding in bringing in the millennial money with robo advisors and no fee brokerages. I don't have the numbers exactly, but that money is a big target for panic selling.

Being strictly a life and health salesman just doesn't cut it. I'm sure there's quite a few successful ones, but many were plate lickers.

I've said enough.

You don't have enough of a difference? My clients are a bit more upstream? Is that your sales pitch to the elitists?

Let's take me for example. I have a 20 year term policy of $3 mil, fairly recently acquired. It costs me $175 per month. Fortunately I'm in excellent health. I just did a quick search for whole life quotes for the same $3 mil. About $3800 per month. That's a difference of $3600 per month. You're correct in that I don't have enough of the difference. In order to pay $3600 additional per month, that would have to come out of my monthly investment/retirement contributions. After 20 years in the market (if assuming the lifetime S&P 500 average return of 10%, which is what the bulk of my money is invested in), I'd have $2.7 million at age 57. At that point, I'd have an extra $175 a month to add to my monthly investments. The actuarial tables tell me I've got an average life expectancy of 78. So if I were to continue to contribute the same amount that the whole life policy costs for a further 21 years, assuming the same rates, I'd have $25 mil... Compared to the, at best, $3 mil on the whole life. And for sake of argument, if we went with a lower return of say 6%, it would give us numbers of $1.66 mil and $7.7 mil.

 

[OldShooter]

... I've said enough.

Thank you for that.

 

[SecondCor521]

I've said enough.

I've heard enough. <plonk!>

 

[2177V]

I managed my own portfolio which is now 100% treasury bonds because of the recession risk and I am currently withdrawing to invest into Real Estate. A FA should be consulted because a FA has the training, certification and experience that most people do not have. (Disclosure: My daughter is a FA with Charles Schwab.) A second opinion does not hurt and would only cost you $200 or so for 1 hour of consultation.

However, after you get that FA opinion and you are aware of the pros and cons and the risks and rewards of what you are doing, then it is perfectly fine to DIY after the consultation. What is valuable is that a FA also has access to other resources: Attorneys, Social Security specialists, Tax specialists, Estate planning, etc.

The correct information can be very powerful. There are some people who believe that they "knows it all". Those people may be exposed to some risks without realizing it. IMO, A one hour consultation with a FA on certain issues for a fee of $200 or so may be worth it for "some" people to get a second opinion by a FA who is trained, certified, experienced and regulated by the SEC.

 

[Rianne]

Not sure I'd call it "manage" our nest egg. We simply stay the course. A good thing in the longest bull market in history. Dips like today are concerning, but we've been here before.

 

[2177V]

Anything can happen

Here are the stock market trends for Japan, Emerging Market, Europe and USA.

USA is the exception. However, "what if" the USA market crashes and the USA market takes decades to recover because of the 22 trillion dollar debt?

How will your retirement turn out if the USA market follow the exact same trend as Japan, Emerging Markets and Europe? Can you take this risk?

IMO, this risk is unacceptable to me and therefore I am 100% treasury bonds to safeguard my retirement that I have already earned during the bull market. If this risk is acceptable to you and you have other resources, then leave your money in the stock market and assume that this possibility will NEVER happen.

+2% in treasury bonds is better than -40% in a stock market crash which may take decades to recover. Currently money is flowing into the USA market because there is no other place to invest internationally.

However, once foreign investors have determined there are better investment elsewhere, they will sell US stocks in a heartbeat. I suspect this is what happened to Japan, Europe and Emerging Markets.

 

[ownyourfuture]

I'm 57 & I've always managed my own. I do the asset allocation thing with my 401(k).
My single biggest account is a 700 K taxable brokerage account at Fidelity, which is mostly for income (conservative)
It's performance is very predictable.

On a day like today, where the averages are down as follows:
Dow Jones Industrial Average (-1.01%)
S&P 500 (-0.66%)
NASDAQ (-0.55%)
Russell 2k (-0.31%)

Mine is only down (-0.09%)
Of course it lags the averages on up days, but I can live with that.

 

[pb4uski]

..... A FA should be consulted because a FA has the training, certification and experience that most people do not have. (Disclosure: My daughter is a FA with Charles Schwab.) A second opinion does not hurt and would only cost you $200 or so for 1 hour of consultation. ....

While I am in no way disparaging your daughter and she may well be the exception, in my experience most FAs are empty suits at best and pushy salespeople at worst.

Also, we have had members here who have tried to get a second opinion on their plan and were willing to pay for it but unless they were interested in a AUM relationship there was no interest by FAs in spending time for a second opinion.

 

[Dtail]

While I am in no way disparaging your daughter and she may well be the exception, in my experience most FAs are empty suits at best and pushy salespeople at worst.

Also, we have had members here who have tried to get a second opinion on their plan and were willing to pay for it but unless they were interested in a AUM relationship there was no interest by FAs in spending time for a second opinion.

+1
An added note is that the FA's if they were truly out for the best interest of their client's, then they would also recommend other products that their firm does not sell.
I asked Fidelity would you invest in your broker CD's right now over a one off CD at X Credit Union? The answer was no and further added that they have no idea of the current Credit Union deals.

 

[kgtest]

Not all FAs are treated equal but if you start out the conversation by stating you have no intentions of moving assets from one firm to the firm the FA is...you will quickly and easily discern which ones are advisors and which ones are salesman.

 

[GTFan]

Here are the stock market trends for Japan, Emerging Market, Europe and USA.

USA is the exception. However, "what if" the USA market crashes and the USA market takes decades to recover because of the 22 trillion dollar debt?

How will your retirement turn out if the USA market follow the exact same trend as Japan, Emerging Markets and Europe? Can you take this risk?

IMO, this risk is unacceptable to me and therefore I am 100% treasury bonds to safeguard my retirement that I have already earned during the bull market. If this risk is acceptable to you and you have other resources, then leave your money in the stock market and assume that this possibility will NEVER happen.

+2% in treasury bonds is better than -40% in a stock market crash which may take decades to recover.

LOL, if I lost 50% in stocks today I'd still be better off than I was 5 years ago when I ER'd. And I had more than enough money to live on then.

I don't lose sleep over stuff like this, it's called black swans. I get the argument that you've already won the game so don't play but history is what it is until that swan event happens. And history says the US is the bell cow and I'll take the risk that it won't change in the years I have left. The upside is well worth that small risk and the downside is manageable short of a true economic collapse, in which case we're all screwed.

There's no guarantee the gov't is going to pay 2% forever either, and what are your bonds worth if nobody's buying them? Same swan.

(BTW the US market DID crash 10 years ago with massive debt. Hmmm.)

 

[pb4uski]

LOL, if I lost 40% in stocks today I'd still be better off than I was 5 years ago when I ER'd. ...

+1 except make it 8 years and that is after 8 years of expenses and buying a winter condo for cash and replacing a 1-car garage with a 2-car garage with bonus room in the loft.

So if I could retire then I could certainly retire now... I have more even with a 40% dip in stock and less years to go.

 

[scrabbler1]

+1 except make it 8 years and that is after 8 years of expenses and buying a winter condo for cash and replacing a 1-car garage with a 2-car garage with bonus room in the loft.

So if I could retire then I could certainly retire now... I have more even with a 40% dip in stock and less years to go.

+1 except make it 100% of my stock funds but exclude your large, one-time expenditures. And I had already been retired for 3 years, starting with a smaller balance.

 

[dtbach]

I've managed my own accounts for at least 20 years now. The stock brokers and FA's I had prior probably cost me $500K in net worth with stupid advise. My broker had me double down on World Com and even convinced me to set up a margin account!! Costly lessons.

Both my brother and sister use FA's and have gone through at least 3 or 4 between them even though I've begged them to just buy some index funds. But hey, they got a nice box seat at the latest college game from their FA. You can bet they paid handsomely for that. . .

 

[SAinMinn]

Interesting thread.

I'm 52 and pretty new into this, at least new to paying attention to my IRA and 401(k), which grew throughout my 30s and 40s without me paying much attention to it, as I put in close to the max, thankfully.

Suddenly, I have about 1M in IRA, 403(b), and an already-taxed brokerage fund and I'm paying attention and thinking about options. I guess for me, I'd rather do it myself and use resources such as this website and a lot of other resources, and not pay an adviser. I've learned a lot the last two years and expect to keep learning more.

 

[kgtest]

Interesting thread.

I'm 52 and pretty new into this, at least new to paying attention to my IRA and 401(k), which grew throughout my 30s and 40s without me paying much attention to it, as I put in close to the max, thankfully.

Suddenly, I have about 1M in IRA, 403(b), and an already-taxed brokerage fund and I'm paying attention and thinking about options. I guess for me, I'd rather do it myself and use resources such as this website and a lot of other resources, and not pay an adviser. I've learned a lot the last two years and expect to keep learning more.

A lot of what I learned was from folks on this awesome forum. Mainly gave me the confidence and eliminated any fear I had prior.

From a fellow Minnesota, welcome! You will learn a lot here.

 

[carnivalday]

Managed my own ever since buying my first mutual fund 20 years ago. I do a lot of reading, and follow people who have the same conservative ideas that I have....blue chip stocks that pay dividends. Fortunately because of that I was able to retire last year.

Possibly the best advise I was ever given, was a casual question by a bank teller about 20 years ago when I was making a deposit to my savings account; "have you ever considered a ROTH IRA?" Me: "Whats that?" I did some research, and it sure seemed like a good idea at the time. And it is still a good idea.

 

[allstock]

You don't have enough of a difference? My clients are a bit more upstream? Is that your sales pitch to the elitists?

Thank you for that.

I've heard enough. <plonk!>

So hows that rate of return working out for you forum professionals. In it for the long-term right. Hows the draw off?

Those of you that bought treasuries and didn't get too caught up in equities congrats - Smart move. When anyone and everyone is euphoric of their success in the stock market, that's a bell weather of things to come. They get caught up in the easy money. There's a saying in our industry that Bulls and Bears make money and pigs and sheep get slaughtered.

Get ready for a ride, the SPX looks like it wants to go to 2600 then 24

My heart is with the retirees that are humble and respect the markets with impunity.

 

[OldShooter]

So hows that rate of return working out for you forum professionals. In it for the long-term right ...

Well, I don't remember what that post was about, but my long term rate of return will almost certainly be unchanged after the current excitement settles out. Right now our equities are probably down and our TIPS are probably up. I don't know because I haven't checked.

For those who are up or down lately it isn't at all about being smart or dumb; it's simply about being lucky or unlucky.

 

[Gumby]

There's a saying in our industry that Bulls and Bears make money and pigs and sheep get slaughtered.

Never heard that one before.