Where to start?

S

SarahW

Full time employment: Posting here.
Joined
Jul 1, 2008
Messages
619
Hello everyone. I haven't been around these parts in a while. I ER'd back in 2009, and upon doing so I left all my savings stashed in the company plan, as it is mostly stock and has done pretty well, considering. (No need to gasp and clutch your pearls; I have heard all the "you're doing it wrong" advice that I can handle.)

My DH is still working and will be 60 in 2015, when he plans to retire, too. I never felt any urgency to make distributions or any major financial changes since it seemed like we had "plenty of time" :rolleyes:. (Yeah... no lectures, please. :D) We sort of thought we'd just hand everything over to a financial advisor, having attended what seems like several hundred rubber chicken dinners. Poking around this site, I can see that you will all be ready to stone me for that blasphemy.

Now that I have bared my soul, I'd like to ask where to begin educating ourselves on investing. Should we take a course? Are there online sites where the terminology won't make my eyes cross? I don't know my NUA from a hole in the ground.

I will say that I am ignorant of investing and financial matters, because truthfully it scares me. I would like to say that I am a "low risk" type, which is belied by the fact that my entire life savings is invested in stock. :blush: I guess handing money over to an FA is the easy way out; then I can blame someone else when doo-doo occurs.

OK, enough of that. Where do I begin?? Help, please.
 
Hi Sarah:

Your no different than many of us on the forum. I had the same concerns, but I decided ultimately it was better to educate myself than to turn my money over to someone who I know very little about.

If you are open to reading one book, I recommend Investing for Dummies. It's a very light, easy read. It's written in a very folksy, non-intimidating way. If you still don't feel comfortable managing your investments after reading this book, come back and ask us lots of questions. But I think you will find that the book tells you enough to get started and feel good about avoiding a financial advisor.

Nobody is going to be a better steward of your money than you.
 
Start reading, it's not rocket science. From your post you have a NUA, very smart. So you must have some knowledge.

If I remember correctly Morningstar has some free online classes, I took a few. Seems like they started out very basic, like what is a stock.

There's a recommended reading list here. My favorite is The Millionaire Teacher.
Best wishes,
MRG
 
Welcome back, Sarah!

What I did to learn about investing was to choose 5-6 books that appealed to me from this list:

Investment Books

They are all available on Amazon or at Barnes and Noble (or probably the library but I didn't check there).

And then, I read all of them, one by one, thoughtfully and slowly. It didn't take as long as it sounds like it would, and I feel like I got what I wanted to learn from them.
 
I thought that was Sarah, of Bounder fame. Welcome back, Sarah! I've missed your voice here.
 
Is ALL your money in the company plan? If so, you have a choice of leaving it there and choosing between available offerings or moving it or possibly a portion of it to an IRA. A lot of folks here suggest an allocation somewhere between 60/40 and 40/60 stocks/bonds. Lots of other allocation possibilities depending on things like if you need withdrawals for living expenses. I am close to the same situation as you. Most of my money is in the company 401k. That means I don't have any cash to do transfers to Roth before RMDs kick in. That will cost me. I did have a few thousand in IRAs. I moved that to Vanguard and then had them do a financial plan for me. It cost about $200. They told me where to put my 401k money as well as my IRA money to give me a good allocation all in indexed funds. I pretty much followed their advice and it has worked for me. I just need to rebalance to the allocation once a year or when the allocations get more than 5% out of balance. Wasn't a whole lot I needed to learn.

There will be a some people chime in who are a lot smarter about this stuff than me. Good Luck.
 
Ready said:
Hi Sarah:

Your no different than many of us on the forum. I had the same concerns, but I decided ultimately it was better to educate myself than to turn my money over to someone who I know very little about.

If you are open to reading one book, I recommend Investing for Dummies. It's a very light, easy read. It's written in a very folksy, non-intimidating way. If you still don't feel comfortable managing your investments after reading this book, come back and ask us lots of questions. But I think you will find that the book tells you enough to get started and feel good about avoiding a financial advisor.

Nobody is going to be a better steward of your money than you.
Click to expand...
Thanks very much; I'm headed to Amazon right now with my list! :D I guess we thought the FA was a good idea until we realized just how much that "1.5% fee" actually is. YIKES.
 
steelyman said:
There is a reading list:

FIRE Recommended Reading List - Early Retirement & Financial Independence Community

My personal favorite is A Random Walk Down Wall Street, but I'm sure others are good.
Click to expand...
Thank you!

MRG said:
Start reading, it's not rocket science. From your post you have a NUA, very smart. So you must have some knowledge.

If I remember correctly Morningstar has some free online classes, I took a few. Seems like they started out very basic, like what is a stock.

There's a recommended reading list here. My favorite is The Millionaire Teacher.
Best wishes,
MRG
Click to expand...
I have gleaned a bit of random "stuff" from the rubber chicken dinners, so they have been worth the price of admission ($0). :D I actually have a significant number of shares of Exxon stock with a cost basis of $5 and up, so I know I must exercise the NUA! (Or at least I think so, lol.) Of course, that will require a distribution of my entire account, so I need to make sure where I want the rollover to go. Thanks for the book rec!
 
W2R said:
Welcome back, Sarah!

What I did to learn about investing was to choose 5-6 books that appealed to me from this list:

Investment Books

They are all available on Amazon or at Barnes and Noble (or probably the library but I didn't check there).

And then, I read all of them, one by one, thoughtfully and slowly. It didn't take as long as it sounds like it would, and I feel like I got what I wanted to learn from them.
Click to expand...
Thanks! I remember being here back when you were in "countdown to retirement" mode! I appreciate the recommendations.

Accidental Retiree said:
I thought that was Sarah, of Bounder fame. Welcome back, Sarah! I've missed your voice here.
Click to expand...
Yep, it's me!! :D Thanks for your kind words. I guess I'll be hangin' around for a bit, trying to figure things out. We still love the Bounder!

REWahoo said:
I've used up all my lecture quota for the day, so given your introduction I'd suggest you enlist the services of Rick Ferri to manage your investments: Low Fee Investment Manager, Low Cost Investment Advisor | Portfolio Solutions

After you watch what he does for a couple of years you can take it over yourself and save the fees.
Click to expand...
Thank goodness, I don't need another lecture!!! :LOL: I'll check out the link you provided; thanks very much!
 
Hermit said:
Is ALL your money in the company plan? If so, you have a choice of leaving it there and choosing between available offerings or moving it or possibly a portion of it to an IRA. A lot of folks here suggest an allocation somewhere between 60/40 and 40/60 stocks/bonds. Lots of other allocation possibilities depending on things like if you need withdrawals for living expenses. I am close to the same situation as you. Most of my money is in the company 401k. That means I don't have any cash to do transfers to Roth before RMDs kick in. That will cost me. I did have a few thousand in IRAs. I moved that to Vanguard and then had them do a financial plan for me. It cost about $200. They told me where to put my 401k money as well as my IRA money to give me a good allocation all in indexed funds. I pretty much followed their advice and it has worked for me. I just need to rebalance to the allocation once a year or when the allocations get more than 5% out of balance. Wasn't a whole lot I needed to learn.

There will be a some people chime in who are a lot smarter about this stuff than me. Good Luck.
Click to expand...
Yep, all my retirement money is still sitting there in the company plan; it has rebounded very well after the 2008 fiasco. I know I don't need to do anything with it until I'm 70 1/2, but I'm sure there are smarter options we need to consider. I have a small amount of savings in a CD (gasp) at the local credit union and we have cash reserves. We are working to build our "after tax" savings in the next 1.5 years until my hubby retires.

Thanks for the Vanguard rec. I'll certainly check them out after I get a bit of book learnin'.
 
You might also want to check out The Quest for Alpha by Larry Swedroe. Favorite part of the book is the dethroaning of anyone (individuals, "experts", financial news media, economists, etc.) who say they can predict the direction of market, economy, interest rates, or anything else related to investing.

Best contained quote: Warren Buffet "A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting."
 
Didn't Warren just say, in his letter to shareholders, that when he died all the unallocated funds in his estate would go into a 90/10 portfolio at Vanguard?

He should know.....
 
Always best to educate yourself. Even if you stay with an adviser, you will still have better understanding of what the adviser is recommending. Think of it as a quality control check on the process.

However, one important fact is that there is one financial adviser that will always have your best intentions: You. So besides the savings in fees, you can be assured that you will do what makes you happy (assuming you have the education and knowledge, see paragraph above).
 
Thanks to all who responded! I'm looking at the recommended books and trying to pick the "Simpleton's Guide" so my eyes won't glaze over. (No matter where I look, it's acronym hell. :D) I need someone to speak slowly in single syllables and use diagrams!!!
 
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A neighbor of mine has a husband who's getting ready to retire at the end of 2014, and neither knows diddly about investing, but she wants to learn at least enough to ask good questions about rollovers, etc.

I loaned her my little copy of Daniel Solin's The Smartest Investment Book You'll Ever Read. It focuses on index investing, and it's very readable.
 
Go to amazon and buy "The Millionaire in You" by Michael LeBoeuf. I have read them all. This is an entertaining and enlightening read, and I personally used it to get FI. You will need to buy it used because it's out of print. But it's worth its weight in gold, IMO.
 
Very courageous of you to post this! Good for you. You have taken the most important and hardest step. It will get better from here on. Congrats. We are all here to help and learn ourselves.

Sent from my HTC One using Early Retirement Forum mobile app
 
Thanks for all the suggestions; I appreciate the feedback!
 
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