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Old 07-06-2021, 12:18 PM   #81
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Fresh out of high school , they start getting solicitation from credit cards to build up credit. Many don't have a clue on financial responsibility and are on the road to being a slave to debt which continues to fuel our economy. Debt free is like a foreign language to many I know.
Thankfully my kids learned something from the old man. Had a surplus amount in their savings account upon graduating from college.
Then the youngest was reading a book this weekend and I asked her about it. She said she wanted to start investing as soon as possible (yeah!!!) because of the book. The book is "I want to teach you to be rich" and darn if it doesn't preach all of the stuff we on this board know! Even mentions the bogglehead forum.

So sometimes the youngsters do the right thing.
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Old 07-06-2021, 12:21 PM   #82
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BMW had a slogan back in the day " Lease your dream ". Probably for ones who do not drive many miles per year and or ones who just want to lease their dream because they could not even fathom trying to buy it due to financial issues.
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Old 07-06-2021, 12:30 PM   #83
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Apparently that's more common than I would have expected. My former primary doc was exactly the same. "Oh, I don't have time to deal with that stuff; I have a guy who handles it for me."
And in cases like that it may well be ignorance but also coupled with an air of privilege in having many guys and gals to do the work from them - from finances, to housekeepers, to lawnkeepers, to lawyers. It's part of the "lifestyle" and don't they sound so sophisticated!
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Old 07-06-2021, 12:45 PM   #84
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No reason to think lack of personal financial skills is limited only to the public sector. Our CFO had his car repossessed from the corp HQ parking garage.
Well thatís embarrassing! Did he keep his job?
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Old 07-06-2021, 12:59 PM   #85
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Well thatís embarrassing! Did he keep his job?
Not for long. He was gone a few weeks later.

He initially claimed his car was stolen. When I heard what had happened I called him and volunteered to talk with the police as I had seen someone getting into his car that day while on my way to lunch. After a couple of days passed and I wasn't contacted, I followed up with him and got an odd response.

Later that day I learned from someone in his office that the "thief" was actually the repo man.
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Old 07-06-2021, 01:05 PM   #86
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A majority here might scoff but not me. We have AUM with Vanguard Personal Advisory Services for .35% for all sorts of interpersonal reasons and it might be the best money we spend. I view it as, first and foremost, cheap mistake prevention insurance.
We have AUM with Merrill Lynch Wealth Management at 0.8% for the managed portion. We also have other investments/instruments, under the AUM portfolio which are not charged a fee and have also done very well. We have been very happy with their services and they have been managing our investments for the past 8 years.

Prior to that we had Fidelity wealth management and that was a total bust.
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Old 07-06-2021, 01:38 PM   #87
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I know that this forum scoffs at AUM fees that people pay. The good part about legitimate money managers, not Bernie Madoff type, is that people don't lose their entire investments. Whether it is the ignorance or people who want to be one step removed from making knee jerk buy/sell decisions, wealth management would work well for them. As long as the market is up, it is not difficult to pick winners. It is when the market is down, it will separate the people who are good level-headed investors vs. panic sellers. Wealth management companies provide that protection against panic selling - buy high / sell low.
My sister gets the same effect with a 0.3% AUM through Schwab's managed portfolios. Typical AUM of a "Wealth Manager" is 1% or more. My sister likes that she doesn't have to worry or panic when the market dips/swerves/roller coasters because she's not the one making the decision.

The term "wealth management" is an ego feeding marketing term.... Oooh - I must be wealthy because I have a wealth manager. They used to be called Financial Adviser... but that didn't feed the ego of the consumer as much. (This is a pet peeve of mine.)
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Old 07-06-2021, 01:48 PM   #88
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Not for long. He was gone a few weeks later.

He initially claimed his car was stolen. When I heard what had happened I called him and volunteered to talk with the police as I had seen someone getting into his car that day while on my way to lunch. After a couple of days passed and I wasn't contacted, I followed up with him and got an odd response.

Later that day I learned from someone in his office that the "thief" was actually the repo man.
Getting his personal car repo'd should have no bearing on a reason to let him go. One of the staff members in the company I worked for was in a similar position. She freaked out when she went to the company parking lot and saw her car was missing. She called the police right away. Upon further questioning of her by the cop, the cop discovered she was behind in her car payments and the repo man came to the lot earlier and took her car away.
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Old 07-06-2021, 01:53 PM   #89
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I was 18 or 19 years old and planning to buy my first car and I was talking to my uncle about my plans to get a car loan and pay it off as soon as possible because I don't like having loan payments, and he said "That's silly, you should always expect to have a car payment, that's a part of life."

I never forgot that, not because I agreed with him, but because it struck me how he had internalized being in debt as a part of life and it was silly to think about being debt free. I've always made it a point to have as little debt as possible and avoid car payments and I always think about what my uncle said as a counter example of how I do not want to live.
+1


At the time I started working for Megacorp (1979), I believe almost all loan interest, including interest on auto loans, was tax deductible. I often heard co-workers advocate "don't worry about carrying a car loan, the interest is tax-deductible!"

These days, I see what the average new car price is, and then look at the median household income and median and average household savings, and expecting to always have a car payment seems more the norm.
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Old 07-06-2021, 01:57 PM   #90
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Not for long. He was gone a few weeks later.

He initially claimed his car was stolen. When I heard what had happened I called him and volunteered to talk with the police as I had seen someone getting into his car that day while on my way to lunch. After a couple of days passed and I wasn't contacted, I followed up with him and got an odd response.

Later that day I learned from someone in his office that the "thief" was actually the repo man.
On topic with personal finance ignorance... A very good friend's brother had his car repo'd in the 80's. The wife went in to pay for gas, leaving the car, and sleeping infant child in a car seat, at the pump. Repo guy swoops in, takes the car... realizes a few blocks away that he's made a BIG mistake.

They managed to get the car loan written off AND about $10k in cash. For doing everything wrong... Ended up profiting from poor choices.

35 years later he is still making bad choices... In his late 50's he's still borrowing money from his insolvent parents for the next big scheme. He will die broke and make sure those around him do also.
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Old 07-06-2021, 02:02 PM   #91
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My sister gets the same effect with a 0.3% AUM through Schwab's managed portfolios. Typical AUM of a "Wealth Manager" is 1% or more. My sister likes that she doesn't have to worry or panic when the market dips/swerves/roller coasters because she's not the one making the decision.

The term "wealth management" is an ego feeding marketing term.... Oooh - I must be wealthy because I have a wealth manager. They used to be called Financial Adviser... but that didn't feed the ego of the consumer as much. (This is a pet peeve of mine.)
At ML, they are still called Financial Advisors. It is the "private client group" for the ultra high net worth which tells us that they are in a different class of "wealth".
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Old 07-06-2021, 02:11 PM   #92
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I think its also an interest level thing.
Absolutely agreed that it's an interest level thing. If you have a modicum of ability in an area, combined with a strong interest, it's my feeling that you'll end up doing far better, than if you have strong ability but limited interest. I imagine most of us can identify things that we're good at, yet dislike doing, as well as having activities at which we don't excel, but just love.

Like you, I spent countless hours reading anything I could find online about investing and early retirement. Whenever I joined a new forum, I would read every single post, back to the inception of the site, before even thinking of asking a question. I am not a fast learner, but managed to soak up enough basic investing commonsense, through the very inefficient method of near-constant immersion, and hoping that some of it would sink in. Some of it did, but that's all! Compared to the time and effort I put in, it is shocking how little knowledge I retained. Thankfully, you don't need to know much in order to be able to manage your own retirement finances - you just need to know the right things.

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I do remember him. He was an OBGYN and did a lot of volunteering with Doctors without Borders, right? He had all his money in CDs or something like that? If you're extremely risk-averse, I guess that's what you'd do. My former boss moved all his money in his 401K to a short-term fund (or was it a stable value fund?) in 2008, after the stock market crashed. He got laid off right after that (and his wife had quit working a few years earlier) but he bought a house in a dip (200K?) and he tells me his SS and his wife's SS have been fully covering all of their living expenses. He still has his money in his 401K, etc. - About a million total in CDs and stable value funds. If a person is extremely risk-averse and not hurting, there's no reason to venture out IMO. If I had, say, 10 million dollars, I would have no need to put any of it in the market.

I hope the OBGYN person is still doing all right.
Yes, I was referring to OBGYN. He was very risk-averse. I finally managed to get him to admit/concede that he was comfortable with that fact that the spending power of his portfolio would not keep pace with inflation over time, as that was the trade-off he was willing to accept in exchange for predictability and lack of volatility. I wasn't sure he was initially fully aware of that trade-off.

I definitely hope he's doing well. He was very committed to using his skills to help others in need around the world. What a wonderful thing. I'm sure he has effected long-lasting and positive change for many people in need. We need more like him in the world. I am truly humbled.
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Old 07-06-2021, 02:19 PM   #93
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At ML, they are still called Financial Advisors. It is the "private client group" for the ultra high net worth which tells us that they are in a different class of "wealth".
Well... Merryll Lynch still managed to rebrand themselves with "wealth management" all over their website. I assume the majority of the customers do not have the $30M + required to fit the wikipedia definition of Ultra High Net Worth you mention.

It's still about marketing and ego boosting.
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Old 07-06-2021, 02:22 PM   #94
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Car salesmen have always seemed a little surprised when I told them I was paying cash. It's probably because they have one chance to squeeze me for some extra money with the "finance guy" afterward. As with credit cards, I can't conceive of paying interest on those or as part of a car loan.
I bought a Soob WRX (for cash of course) about three years ago and asked the sales guy about that. He said that at their store about 1/3 paid cash. But can include people who are using loans not secured by the car, like a HELOC.
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Old 07-06-2021, 02:30 PM   #95
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At ML, they are still called Financial Advisors. It is the "private client group" for the ultra high net worth which tells us that they are in a different class of "wealth".


This is a slide I use in my Adult-Ed investing class. I point out that anyone with $15 of headroom on a credit card can go to VistaPrint.com and become a Financial Advisor, Wealth Manager, or Intergalactic Investing Genius.

We also talk about CFPs being generally a good thing but being badly oversold. For example, they are not fiduciaries by virtue of the CFP though some will tell you that.
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Old 07-06-2021, 02:55 PM   #96
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Absolutely agreed that it's an interest level thing. If you have a modicum of ability in an area, combined with a strong interest, it's my feeling that you'll end up doing far better, than if you have strong ability but limited interest. I imagine most of us can identify things that we're good at, yet dislike doing, as well as having activities at which we don't excel, but just love.

Like you, I spent countless hours reading anything I could find online about investing and early retirement. Whenever I joined a new forum, I would read every single post, back to the inception of the site, before even thinking of asking a question. I am not a fast learner, but managed to soak up enough basic investing commonsense, through the very inefficient method of near-constant immersion, and hoping that some of it would sink in. Some of it did, but that's all! Compared to the time and effort I put in, it is shocking how little knowledge I retained. Thankfully, you don't need to know much in order to be able to manage your own retirement finances - you just need to know the right things.



Yes, I was referring to OBGYN. He was very risk-averse. I finally managed to get him to admit/concede that he was comfortable with that fact that the spending power of his portfolio would not keep pace with inflation over time, as that was the trade-off he was willing to accept in exchange for predictability and lack of volatility. I wasn't sure he was initially fully aware of that trade-off.

I definitely hope he's doing well. He was very committed to using his skills to help others in need around the world. What a wonderful thing. I'm sure he has effected long-lasting and positive change for many people in need. We need more like him in the world. I am truly humbled.



I miss OBGYNs inputs, he just quit posting one day and like you I admired his commitment to helping others.
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Old 07-06-2021, 03:02 PM   #97
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I bought a Soob WRX (for cash of course) about three years ago and asked the sales guy about that. He said that at their store about 1/3 paid cash. But can include people who are using loans not secured by the car, like a HELOC.
Cash payers might include those who traded in their old cars, too.
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Old 07-06-2021, 03:06 PM   #98
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Well... Merryll Lynch still managed to rebrand themselves with "wealth management" all over their website. I assume the majority of the customers do not have the $30M + required to fit the wikipedia definition of Ultra High Net Worth you mention.

It's still about marketing and ego boosting.
All these companies call themselves wealth management companies. It is up to the FA to call themselves whatever they want to call. Mine happens to be the head of the branch and his title does not even reflect what he does other than the position within the firm. People should not get too excited over titles. It is AUM and its related fees, the FA and the results that matter. Our first FA out of CA was probably not as smart as average FIRE group here. Our current FA is one of the smartest people whom we have met.
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Old 07-06-2021, 03:12 PM   #99
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Getting his personal car repo'd should have no bearing on a reason to let him go.
I can tell you never had a job requiring a security clearance. A CFO in financial straits is a security risk to the company's assets in his care.
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Old 07-06-2021, 03:12 PM   #100
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All these companies call themselves wealth management companies. It is up to the FA to call themselves whatever they want to call. Mine happens to be the head of the branch and his title does not even reflect what he does other than the position within the firm. People should not get too excited over titles. It is AUM and its related fees, the FA and the results that matter. Our first FA out of CA was probably not as smart as average FIRE group here. Our current FA is one of the smartest people whom we have met.
A good friend of mine is a client manager in Wells Fargo's Private Client business (very high net worth individuals). Besides the WF logo on his business card, all he has on his card is his name and phone number. No title needed.
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