Fantasm
Recycles dryer sheets
I thought I made a lot at 23, you got me a bit jealous now 
Need advices for XXX,XXX$ Investment at 21yo.
- Thread starter regularguy
- Start date
Regular guy, I believe you are in Canada. But how about if you are in the US. Municipal bonds are for the most part safe. Secure by the government.
Some of the disadvantage is that:
1. You will not get high returns but for that amount you will get a decent check every month or every six months depending on the bond.
2. You have to stay with the bond for longer period of time, unless you sale the bond.
I am sure the Canadian government has the same since most countries have similar systems.
What you guys think about that thought?
Some of the disadvantage is that:
1. You will not get high returns but for that amount you will get a decent check every month or every six months depending on the bond.
2. You have to stay with the bond for longer period of time, unless you sale the bond.
I am sure the Canadian government has the same since most countries have similar systems.
What you guys think about that thought?
The income is impressive, and the mistake here isnt all that large. As long as you fix it soon. 4K is a pretty inexpensive introduction to the dark side of the investment world (which are the hordes of crooked salesmen). Many go 5, 10, or even 30 years (such as when they invest in their company plan), and then look at their balances at the end and have no clue what went wrong, they don't even know what happened.
Make sure to find out if there are any termination fees or withdrawal maximums, and then get the money in a money market fund/an insured high interest savings account, and leave it alone until you figure out the sort of funds you need. The salesmen certainly aren't going to hand the right plan (even though there really should be a rule that they be fiduciaries, but there is no such law). I am honestly astonished that a fiduciary responsibility was never mandated in the financial industry, there is just so much incentive to screw a person over when very large sums of money are involved otherwise.
As for RAMBO's question, I think municipal bonds have too much inflation risk, at least if that is all you are going to buy. As a steady, conservative portion of a portfolio, it is worth investigating, among other options.
Make sure to find out if there are any termination fees or withdrawal maximums, and then get the money in a money market fund/an insured high interest savings account, and leave it alone until you figure out the sort of funds you need. The salesmen certainly aren't going to hand the right plan (even though there really should be a rule that they be fiduciaries, but there is no such law). I am honestly astonished that a fiduciary responsibility was never mandated in the financial industry, there is just so much incentive to screw a person over when very large sums of money are involved otherwise.
As for RAMBO's question, I think municipal bonds have too much inflation risk, at least if that is all you are going to buy. As a steady, conservative portion of a portfolio, it is worth investigating, among other options.
Plex, I totally agree with you. Inflation could get you with the bonds if you do not develop the plan. But you have to take into account that most municipal bonds are tax exempt and in reality when they tell you the bond is 5%, in reality is the equivalent of making an 7% after tax (approximately). If you want to live a humble live this could be a good route. What I am doing is reinvesting my gain until my retirement.
The wrong thing to do with such of young age, in my opinion, is to expend your gain right away.
If you want a glamorous lifestyle, this is not the route.
The wrong thing to do with such of young age, in my opinion, is to expend your gain right away.
If you want a glamorous lifestyle, this is not the route.
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Definitely agree with reading some good books (there is a link on the forum for recommended reading list). If you are looking for online education, IMO, this is a very good place to start:
Investment Guide
Good luck to you and as others have said, just be glad you are getting your education young which will limit your overall losses!
Tigger
Recycles dryer sheets
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Too much default risk right now, I think.
What kind of adviser would put a 21 year old with 30% of his money into that? Didn't you have to complete a suitability form? I hear FINRA calling...if you're still within your 30-day or 60-day free look period, you can still get it back with no penalties.
5% guaranteed for an income rider is nothing. Every company that has income riders has 5%+. Make sure you understand the difference between an income rider and a guaranteed cash accumulation. There are many fixed/index annuities that charge no wrap/account/management annual fees offering 7-8% guaranteed.
5% guaranteed for an income rider is nothing. Every company that has income riders has 5%+. Make sure you understand the difference between an income rider and a guaranteed cash accumulation. There are many fixed/index annuities that charge no wrap/account/management annual fees offering 7-8% guaranteed.
FinanceDude
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I don't think FINRA regulation applies in Canada..........
With the corresponding 15 year surrender periods?
Didn't know he was in Canada. Still shady...and income annuities don't all have 15 year surrender periods, I'm sure you are referring to the infamous Allianz policies that were sold to unknowing people and had surrender periods longer than the accumulation periods unless you actually annuitized. The only annuities we offer are those with surrender periods equaling the term selected for accumulation purposes (i.e. a walk-away annuity). There are shady and abusive agents/advisors everywhere in every industry only out to line their own pockets, but that doesn't mean every one of them is that way. As they say "trust, but verify."
brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Better yet: "be suspicious and avoid entirely."
kcowan
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
RegularGuy
Because you are in Canada, the land of high MERs and grasping FIs, I think you ought to visit
Financial Webring
and especially visit their forum. The advice you received here is consistent with what you will find there but the focus is on Canada. Vanguard is not available to us. Even our ETFs cost more.
(I invested in a good segregated fund at Maritime Life but through two acquisitions, it is now a part of Industrial Alliance and all my fund choices now have high MERs.)
Because you are in Canada, the land of high MERs and grasping FIs, I think you ought to visit
Financial Webring
and especially visit their forum. The advice you received here is consistent with what you will find there but the focus is on Canada. Vanguard is not available to us. Even our ETFs cost more.
(I invested in a good segregated fund at Maritime Life but through two acquisitions, it is now a part of Industrial Alliance and all my fund choices now have high MERs.)
I have about 50% of my IRA in VFORX. You can find the fund that matches 2050 since you are about 10 years younger than me. Picking some up every month for a year or two as part of your strategy can't go too wrong over the long haul. It's always good to keep some cash on hand too for when bargains come up. Keep a list of solid companies to watch and pick them up when they take a 5-10% beating.
-Raymond
-Raymond
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