Pharmacist Net Worth 2020. Poll!

[WVUPharm2007]

You wouldn't undercut me would you? I already offered half the rate plus I would index everything so I'd beat his advisor over time too.

Just stay the hell out of Philly and we're good.

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[wazoodog]

Just stay the hell out of Philly and we're good.

Are you in Philly? I believe my advisor is from around there ...but I guess you'll never meet!

 

[mentos]

I would feel bad taking 0.5% from some sucker only to put their money in VTSAX and VTIAX.

 

[wagrxm2000]

I would feel bad taking 0.5% from some sucker only to put their money in VTSAX and VTIAX.

Yes but you'd feel only half as bad.

 

[wagrxm2000]

Fair question. Not really today since I read some Bogleheads today, but on most days its allowed me to not think about the subject of investing and spend the time doing something else (like biking, spending time with family, or learning another language) instead of reading and studying index funds to the point I feel confident enough to DIY. If you couldn't tell already, I dont enjoy reading about it even though I know it's for own benefit. So yeah, 1% is steep but I havent lost sleep over it. If I start to think its steep, I just remind myself of how I was doing for the 10 years before. Life is short and I dont want so spend it reading on a subject I find tedious.

Although, recently i have found it a little more interesting partly due to all you guys.

It doesn't have to be a hobby. You can go the next twenty years and not look at the price of the S&P500 and you'd still outperform almost every advisor over that time.

Investing yourself, requires no time at all. It's all autocontributed

 

[wazoodog]

I would feel bad taking 0.5% from some sucker only to put their money in VTSAX and VTIAX.

That's why you would take 1% and spread it over 21 funds and claim its tax-efficient.

 

[wazoodog]

It doesn't have to be a hobby. You can go the next twenty years and not look at the price of the S&P500 and you'd still outperform almost every advisor over that time.

Investing yourself, requires no time at all. It's all autocontributed

So what would you do in a deep and prolonged recession? Besides investing more. Would I have to spend time researching to know where I need to shift investments, or is the solution to just keep to the same index fund (or invest more)?

 

[wagrxm2000]

So what would you do in a deep and prolonged recession? Besides investing more. Would I have to spend time researching to know where I need to shift investments, or is the solution to just keep to the same index fund (or invest more)?

It's not recommended to time the market.

Your portfolio should always be set at a risk you are ok with.

 

[wazoodog]

It doesn't have to be a hobby. You can go the next twenty years and not look at the price of the S&P500 and you'd still outperform almost every advisor over that time.

Investing yourself, requires no time at all. It's all autocontributed

In a previous post, you were kind enough to tell me about 3 index funds but you also added the caveat that it's not one shoe fits all, and that I have to figure out my risk tolerance.

In my case, my CFP helped me figure out my risk tolerance though a methodological approach but it actually differed quite a bit from what I thought it was. In any case, finding the shoe that fits and my risk tolerance seems like it would take me some time if i were to DIY. Time that I'd rather spend on something else.

Dont get me wrong, I'm not lazy about everything. You want help learning French, Japanese, or Korean? I'm there. You need a hand remodeling your home? I can help you out and probably save you a lot along the way.. Need someone to teach you how to fix a flat tire on your bike? I can do it pretty quickly. You want to get into pharma? I have a pretty good success rate of helping friends get in. But not when it comes to investing. I dont enjoy reading about it, or thinking about it. And because of that,I'm not confident about my own choices when it comes to investing meaningfully. My trading account that I play around with has gained over 300% in the past 2 years but I attribute that more to having a good friend than skill- it's also one of the reasons my NW has doubled in less than 5 years. For my accounts that are considered AUM, I'm aware what I'm giving to my CFP but I dont lose sleep at night. Before my CFP, I was probably losing money. Now I have the peace of mind to gamble with my trading accout.

If you didnt tell me about those 3 funds, I probably wouldn't have narrowed down all the information out there to those 3. Even if I did, I'd still have concerns.

 

[WVUPharm2007]

It doesn't have to be a hobby. You can go the next twenty years and not look at the price of the S&P500 and you'd still outperform almost every advisor over that time.

Investing yourself, requires no time at all. It's all autocontributed

You could go ultra set it and forget it and just autopay into whichever Vanguard Target Date is closest to your retirement every two weeks. Just give them the money and it's soft-managed for you into a gradually shifting mix of diversified stocks and bonds for the cheap rate of ~0.15% until you retire.

It's the perfect fund for people that want to minimize fees and not actually have to learn anything about investing.

 

[wagrxm2000]

In a previous post, you were kind enough to tell me about 3 index funds but you also added the caveat that it's not one shoe fits all, and that I have to figure out my risk tolerance.

In my case, my CFP helped me figure out my risk tolerance though a methodological approach but it actually differed quite a bit from what I thought it was. In any case, finding the shoe that fits and my risk tolerance seems like it would take me some time if i were to DIY. Time that I'd rather spend on something else.

Dont get me wrong, I'm not lazy about everything. You want help learning French, Japanese, or Korean? I'm there. You need a hand remodeling your home? I can help you out and probably save you a lot along the way.. Need someone to teach you how to fix a flat tire on your bike? I can do it pretty quickly. You want to get into pharma? I have a pretty good success rate of helping friends get in. But not when it comes to investing. I dont enjoy reading about it, or thinking about it. And because of that,I'm not confident about my own choices when it comes to investing meaningfully. My trading account that I play around with has gained over 300% in the past 2 years but I attribute that more to luck then skill- it's also one of the reasons my NW has doubled in less than 5 years.

If you didnt tell me about those 3 funds, I probably wouldn't have narrowed down all the information out there to those 3. Even if I did, I'd still have concerns.

Edit: just skip this and read the post above.

Your goal as an individual investor is simple, make the same amount as the market. You know if you do this over a 15 year period you will outperform over 90% of active managers. (Source the internet)

You can literally pick vanguard retirement fund if you want and it will actually pick the three funds I mentioned ( plus a 4th, total international bond market is added)

For example if you plan on retiring in 20 years vanguard actually recommends an 83/17 split between stocks and bonds.

 

[wazoodog]

In a previous post, you were kind enough to tell me about 3 index funds but you also added the caveat that it's not one shoe fits all, and that I have to figure out my risk tolerance.

In my case, my CFP helped me figure out my risk tolerance though a methodological approach but it actually differed quite a bit from what I thought it was. In any case, finding the shoe that fits and my risk tolerance seems like it would take me some time if i were to DIY. Time that I'd rather spend on something else.

Dont get me wrong, I'm not lazy about everything. You want help learning French, Japanese, or Korean? I'm there. You need a hand remodeling your home? I can help you out and probably save you a lot along the way.. Need someone to teach you how to fix a flat tire on your bike? I can do it pretty quickly. You want to get into pharma? I have a pretty good success rate of helping friends get in. But not when it comes to investing. I dont enjoy reading about it, or thinking about it. And because of that,I'm not confident about my own choices when it comes to investing meaningfully. My trading account that I play around with has gained over 300% in the past 2 years but I attribute that more to having a good friend than skill- it's also one of the reasons my NW has doubled in less than 5 years. For my accounts that are considered AUM, I'm aware what I'm giving to my CFP but I dont lose sleep at night. Before my CFP, I was probably losing money. Now I have the peace of mind to gamble with my trading accout.

If you didnt tell me about those 3 funds, I probably wouldn't have narrowed down all the information out there to those 3. Even if I did, I'd still have concerns.

Edit: just skip this and read the post above.

Your goal as an individual investor is simple, make the same amount as the market. You know if you do this over a 15 year period you will outperform over 90% of active managers. (Source the internet)

From what I read (also internet source), over 30 years (3 recessions) a good active manager consistently outperforms the market.

But regardless, when I first sought an active manager I wasnt looking to outperform the market. I was looking for someone to keep me on track of reaching specific financial goals by certain ages regardless of market conditions.

 

[wagrxm2000]

But regardless, when I first sought an active manager I wasnt looking to outperform the market. I was looking for someone to keep me on track of reaching specific financial goals by certain ages regardless of market conditions.

That's exactly what autocontributing does, keeps you on track

From what I read (also internet source), over 30 years (2 recessions) a good active manager consistently outperforms the market.

Good luck finding one of the 8% that outperform.

Are you willing to say how much you paid your advisor last year?

 

[wazoodog]

That's exactly what autocontributing does, keeps you on track



Good luck finding one of the 8% that outperform.

Are you willing to say how much you paid your advisor last year?

Yes I hope he is one of the ones that end up outperforming. Only time will tell, unless I ditch. Then I'll never know.

Last year, off the top of my head I estimate somewhere between 5-6k

 

[wazoodog]

My female coworker who also uses him calls him Tom Cruise.

Outside of investing knowledge, can you compete?

 

[WVUPharm2007]

I didn't realize that Schwab's target date funds are only 0.08%

https://www.schwabfunds.com/public/file/P-9430864

edit: 0.08%

 

[Splenda88]

I didn't realize that Schwab's target date funds are only 0.8%

https://www.schwabfunds.com/public/file/P-9430864

It's 0.08% (not 0.8), which is dirt cheap...

 

[mentos]

Wow my Roth is in Schwab. Got everything in SWTSX (0.03%) now.

The cheapest I've seen is FXAIX 0.015%.

 

[WVUPharm2007]

It's 0.08% (not 0.8), which is dirt cheap...

Whoops. Typographical error. 0.8% would be pretty expensive.

 

[WVUPharm2007]

From what I read (also internet source), over 30 years (3 recessions) a good active manager consistently outperforms the market.

Does that include the fees they charge you?

 

[wazoodog]

Does that include the fees they charge you?

It does not include fees. If you include fees, I guess it depends how much they're outperforming the market by.

If you accept that the market return from 2000 to the beginning of 2017 was 6.25% after adjusting for inflation, I think it's reasonable to say that long term market return is about 6-7% after inflation adjustment in a 30 year period...spanning across 3 recessions and 2 wars.

Most professional asset managers considered good to competent expect to make 8-10%, making their clients money consistently. They won't beat the market's rate of return when the market is doing really well, but they were able to make money for their clients in 2008 when the market fell 37%. Over a period of time that includes recessions and crashes, they're likely to outperform the market. The longer that period of time is and the more recessions there are, the higher the probability they'll outperform the market return.

Regardless of of the above, the most important point is most clients don't hire an asset manager with the goal of outperforming the market. Their primary motivation is not to maximize market returns while paying the least fees. They're paying for a higher measure of predictability and for convenience. Not just long term predictability, but predictability at any point in time regardless of market conditions. Maybe it's more accurate to say that the measure of how good a professional asset manager is by how close a client's assets actually come to the predicted amount by target date, no matter the current market condition...not by their rate of return during the past 10 years.

Even if a client's planned target retirement date arrives in the middle of a deep recession, the likelihood that their finances match planned target amounts should still be very high even after fees. At that point, most clients aren't crying about fees...they're happy things are happening according to plan and the convenience factor. Theres a reason why if given the choice between a pension or 401k, many would choose a pension plan - people like day-to-day predictability. People are willing to pay exorbitant fees for predictability and convenience, but hey it's relative. What is exorbitant for you is a worthwhile convenience to another. And let's face it, using an asset manager is as close as someone can come to not lifting a finger - they even do all the setup and username/pw creating for you. Everything you need to know or do is pretty much a quick phone call to the same person, even if you're on the road driving. And if something happens to me, it gives me peace of mind that my beneficiary already know who to call and the financial transition will be easy.

 

[Momus]

It does not include fees. If you include fees, I guess it depends how much they're outperforming the market by.

If you accept that the market return from 2000 to the beginning of 2017 was 6.25% after adjusting for inflation, I think it's reasonable to say that long term market return is about 6-7% after inflation adjustment in a 30 year period...spanning across 3 recessions and 2 wars.

Most professional asset managers considered good to competent expect to make 8-10%, making their clients money consistently. They won't beat the market's rate of return when the market is doing really well, but they were able to make money for their clients in 2008 when the market fell 37%. Over a period of time that includes recessions and crashes, they're likely to outperform the market. The longer that period of time is and the more recessions there are, the higher the probability they'll outperform the market return.

Regardless of of the above, the most important point is most clients don't hire an asset manager with the goal of outperforming the market. Their primary motivation is not to maximize market returns while paying the least fees. They're paying for a higher measure of predictability and for convenience. Not just long term predictability, but predictability at any point in time regardless of market conditions. Maybe it's more accurate to say that the measure of how good a professional asset manager is by how close a client's assets actually come to the predicted amount by target date, no matter the current market condition...not by their rate of return during the past 10 years.

Even if a client's planned target retirement date arrives in the middle of a deep recession, the likelihood that their finances match planned target amounts should still be very high even after fees. At that point, most clients aren't crying about fees...they're happy things are happening according to plan and the convenience factor. Theres a reason why if given the choice between a pension or 401k, many would choose a pension plan - people like day-to-day predictability. People are willing to pay exorbitant fees for predictability and convenience, but hey it's relative. What is exorbitant for you is a worthwhile convenience to another. And let's face it, using an asset manager is as close as someone can come to not lifting a finger - they even do all the setup and username/pw creating for you. Everything you need to know or do is pretty much a quick phone call to the same person, even if you're on the road driving. And if something happens to me, it gives me peace of mind that my beneficiary already know who to call and the financial transition will be easy.

You don't buy once and leave it there forever, never putting in any new money. If you do that, you will get 6%/yr and no one invest like that. You just picked the worst period. Counting the lost decade and you still get 6%, that's pretty amazing. Every time you dump money into a stock fund, that money has a different return for the year after. On average, you will make 10%/yr.

Less than 10% manager beats the the market over a long period of time. This is a fact. Even if they beat it for 20 yrs they can lose it all in 1 bad year. Even Warren buffet fail to beat the market for the last 10 yrs. No one here is forcing anyone to do DIY. There are 90% failure rate for any managers to beat the market. If you like to gamble that your manager might be that 10%, so be it. I'd rather take 90% chance I'm not underperforming the market. The odds are stacked against your advisor. However, there are people who are happy to give up millions to an advisor because they are incapable of managing their own investment, too lazy to read a book to better inform themselves and rebalance once a yr. If that's too much for you, just pay 1% to advisor, they will be happy to take your money.

Most clients don't know they are getting ripped off with 1% fee. You do now. Make your own mind and stick to it. It's your money afterall.

 

[wagrxm2000]

It does not include fees. If you include fees, I guess it depends how much they're outperforming the market by.

If you accept that the market return from 2000 to the beginning of 2017 was 6.25% after adjusting for inflation, I think it's reasonable to say that long term market return is about 6-7% after inflation adjustment in a 30 year period...spanning across 3 recessions and 2 wars.

Most professional asset managers considered good to competent expect to make 8-10%, making their clients money consistently. They won't beat the market's rate of return when the market is doing really well, but they were able to make money for their clients in 2008 when the market fell 37%. Over a period of time that includes recessions and crashes, they're likely to outperform the market. The longer that period of time is and the more recessions there are, the higher the probability they'll outperform the market return.

Regardless of of the above, the most important point is most clients don't hire an asset manager with the goal of outperforming the market. Their primary motivation is not to maximize market returns while paying the least fees. They're paying for a higher measure of predictability and for convenience. Not just long term predictability, but predictability at any point in time regardless of market conditions. Maybe it's more accurate to say that the measure of how good a professional asset manager is by how close a client's assets actually come to the predicted amount by target date, no matter the current market condition...not by their rate of return during the past 10 years.

Even if a client's planned target retirement date arrives in the middle of a deep recession, the likelihood that their finances match planned target amounts should still be very high even after fees. At that point, most clients aren't crying about fees...they're happy things are happening according to plan and the convenience factor. Theres a reason why if given the choice between a pension or 401k, many would choose a pension plan - people like day-to-day predictability. People are willing to pay exorbitant fees for predictability and convenience, but hey it's relative. What is exorbitant for you is a worthwhile convenience to another. And let's face it, using an asset manager is as close as someone can come to not lifting a finger - they even do all the setup and username/pw creating for you. Everything you need to know or do is pretty much a quick phone call to the same person, even if you're on the road driving. And if something happens to me, it gives me peace of mind that my beneficiary already know who to call and the financial transition will be easy.

Yep gotta agree with Momus here, it is well known that money managers do not beat the market.

The thing that gets me the most is you keep saying it's all about convenience. Well if that's true, that's a horrible reason since autocontributing does exactly that.

You will have to show me a source showing managers beating the market because everything I ever see shows under 10% which means you are most likely to find a person that makes you less then getting lucky.

Not only that but a lot of those managers not only underperform but it's by a large margin. There are gold bug managers that have been on gold since it's previous high and they are just now breaking even after about 8 years. These people are now getting new clients and they very well might be buying at the top again.

Holding strong on gold myself though for now. Taking some off the table soon.

 

[wagrxm2000]

Just to continue, the S&P500 has been doing a study looking at the performance of active managers for 17 years now and 92% trailed after 15 years.

Not only that but it only looks at survivors during that time which raises that horrible number a little.

Don't be a sucker people, do it yourself.

 

[Splenda88]

People are afraid to invest in the stock market because they think it's complicated... And it is complicated if you are buying individual stock. I was in @wazoodog position a few months ago thinking real estate investment was a heck of a lot better than the stock market because I did not know about index funds.

I accidentally came across a Youtube video about index funds. Spent a few hours reading about it, watch some more youtube videos and talked to one of my friends who invest in index funds... Now I want to sell my 2 rental properties and take the profit and put it all index fund... No headaches dealing with property management company or tenants. And the ROI over a long period of time will most likely be higher sans the headache.

Don't be too harsh on him/her, he will come around after doing his/her homework. He/she is a pharmacist after all; meaning he is intelligent.

 

[wazoodog]

Yep gotta agree with Momus here, it is well known that money managers do not beat the market.

The thing that gets me the most is you keep saying it's all about convenience. Well if that's true, that's a horrible reason since autocontributing does exactly that.

You will have to show me a source showing managers beating the market because everything I ever see shows under 10% which means you are most likely to find a person that makes you less then getting lucky.

Not only that but a lot of those managers not only underperform but it's by a large margin. There are gold bug managers that have been on gold since it's previous high and they are just now breaking even after about 8 years. These people are now getting new clients and they very well might be buying at the top again.

Holding strong on gold myself though for now. Taking some off the table though soon.

I think you guys are still missing the point, because you're fixating on beating vs not beating the market.

Clients don't pay a 1% fee (or whatever it is) for their CFP / assets manager to beat the market. That is not the service they provide.

It would be more accurate to say they're paid to manage a project with several work streams, and to make sure the project delivers on schedule. A brokerage account is just 1 of those workstreams, and the market is a tool.

Whether they outperform or underperform on one those workstreams is of no consequence, as long as the project delivers on schedule.

Just like any project manager, they're expected to continually assess risks to the project, resolve unforeseen issues, and provide periodic updates. Its expected that the environment is going to be dynamic rather than static.

I dont know if it's common or not for people in pharma to use a CFP, but I know more than a few that do. Whereas when I worked in retail, I didnt know a single one. Maybe outsourcing is just something that becomes second nature to some of us. Or maybe the nature of compensation leads to more frequent unforeseen events that we seek financial advice on. Just like any service that's outsourced, its assumed that the service provider is better equipped in terms of quality, scalability with a higher level of access to evolving industry standard practices.

 

[owlegrad]

Cognitive dissonance is a powerful force.

 

[wagrxm2000]

I think you guys are still missing the point, because you're fixating on beating vs not beating the market.

Clients don't pay a 1% fee (or whatever it is) for their CFP / assets manager to beat the market. That is not the service they provide.

It would be more accurate to say they're paid to manage a project with several work streams, and to make sure the project delivers on schedule. A brokerage account is just 1 of those workstreams, and the market is a tool.

Whether they outperform or underperform on one those workstreams is of no consequence, as long as the project delivers on schedule.

Just like any project manager, they're expected to continually assess risks to the project, resolve unforeseen issues, and provide periodic updates. Its expected that the environment is going to be dynamic rather than static.

I dont know if it's common or not for people in pharma to use a CFP, but I know more than a few that do. Whereas when I worked in retail, I didnt know a single one. Maybe outsourcing is just something that becomes second nature to some of us. Or maybe the nature of compensation leads to more frequent unforeseen events that we seek financial advice on.

Please tell me all the things your CFP does for you.

Also just so we're clear, its not to make more money or convenience anymore?

I have nothing to back this up but I would be willing to say any pharmacist that uses a CFP would say it's for those two reasons plus they think it's hard to do it on their own.

Which is completely false.

 

[wazoodog]

Please tell me all the things your CFP does for you.

Also just so we're clear, its not to make more money or convenience anymore?

I have nothing to back this up but I would be willing to say any pharmacist that uses a CFP would say it's for those two reasons plus they think it's hard to do it on their own.

Which is completely false.

It does have to do with predictability and convenience. It's not about more money.

Predictability because clients want a high degree of assurance that the project objectives are met when they are predicted to be met.

Convenience because clients dont want to manage the project entirely on their own.

And finally, its not about having more money so much as having the predicted amount of money at a predetermined date regardless how the market has been. If theres more, great. But a CFP isnt paid to deliver more...they're paid to deliver the expected results on time.

 

[wagrxm2000]

I'm sorry @wazoodog but it just seems like you are trying to convince yourself to keep your CFP

 

[wagrxm2000]

It does have to do with predictability and convenience. It's not about more money.

Predictability because clients want a high degree of assurance that the project objectives are met when they are predicted to be met.

Convenience because clients dont want to manage the project entirely on their own.

And finally, its not about having more money so much as having the predicted amount of money at a predetermined date regardless how the market has been. If theres more, great. But a CFP isnt paid to deliver more...they're paid to deliver the expected results on time.

Convenience=autocontribute. No management on your own is needed. Zero time is put in.

Predictability=your fund will do exactly what the market does

 

[wazoodog]

I'm sorry @wazoodog but it just seems like you are trying to convince yourself to keep your CFP

I might already be 80% convinced. But hey, give yourself credit for the 20% doubt. I was probably 100% convinced before. The thing is, I hear you guys go back to emphasizing things that dont directly counter the chief reasons why a CFP is used.

Yes I hear you that they wont outperform the market. But I didnt hire them for that purpose.

Yes I hear you that the fee sounds like a lot and the point it clear that you think jts pretty effortless. But TBH, I have to do spend some time reading just to phrase the questions the right way. Maybe I'll come to enjoy it more and be on the way to DIY, but theres a lot of people who would rather spend that time on something else.

 

[wagrxm2000]

I might already be 80% convinced. But hey, give yourself credit for the 20% doubt. I was probably 100% convinced before. The thing is, I hear you guys go back to emphasizing things that dont directly counter the chief reasons why a CFP is used.

Yes I hear you that they wont outperform the market. But I didnt hire them for that purpose.

Yes I hear you that the fee sounds like a lot and the point it clear that you think jts pretty effortless. But TBH, I have to do spend some time reading just to phrase the questions the right way. Maybe I'll come to enjoy it more and be on the way to DIY, but theres a lot of people who would rather spend that time on something else.

So you don't believe me when I say no time is put in when doing it yourself and you can predict with 100% certainty your portfolio will perform exactly as the market?

What more do you need?

You still haven't even said what they do for you.

I'm going to say this again, there is no time spent doing it yourself. You keep acting like you have to drop all your hobbies.

I haven't touched my index funds since I started them.....ever.

 

[mentos]

Is it me or does wazoodog sound like that hedgehog guy?

 

[wagrxm2000]

Is it me or does wazoodog sound like that hedgehog guy?

I think they are a CFP.

They are picking and choosing parts just to not admit they are being suckered into this.

 

[Momus]

Imagine paying $5000/yr to chit chat with some rando today.

Later on, when you are 70 yo with a balance of $17M (big IF he does not underperform), imagine again paying him $170k/yr to have 30 mins talk on "how's your family doing" coz you are too lazy, can't be bothered to learn this yourself. By then, it's way too late lmao.

 

[wazoodog]

Convenience=autocontribute. No management on your own is needed. Zero time is put in.

Predictability=your fund will do exactly what the market does

What do you do when you get suddenly get a lump sum payout of 150k for severance package, or a 175k relocation bonus 2 years later, or a stock payout 8 months later as your startup gets acquired? Or any number of life events that might affect how much you want to auto contribute?

I want more predictability than the market offers. The market is 100% risk. You can expect it to give you a certain rate of return over a certain period of time, but what happens if the market crashes a year before your target retirement date and still hasn't started recovery? A CFP looks to get you to your goals even under such circumstances through counter market securities.

 

[wazoodog]

Imagine paying $5000/yr to chit chat with some rando today.

Later on, when you are 70 yo with a balance of $17M

Given that my family history overwhelmingly suggests I'll be gone at 67, I will be very happy with 17M at age 70 no matter what fees I'm paying

 

[wagrxm2000]

What do you do when you get suddenly get a lump sum payout of 150k for severance package, or a 175k relocation bonus 2 years later, or a stock payout 8 months later as your startup gets acquired? Or any number of life events that might affect how much you want to auto contribute?

I want more predictability than the market offers. The market is 100% risk. You can expect it to give you a certain rate of return over a certain period of time, but what happens if the market crashes a year before your target retirement date and still hasn't started recovery? A CFP looks to get you to your goals even under such circumstances through counter market securities.

Why do you think a CFP gives you more predictability?

If you really want, you could pay a person for advice on what you should do. Not let them manage it.

That's my whole point. Get advice, don't pay when they aren't doing anything after the initial visit.

 

[mentos]

What do you do when you get suddenly get a lump sum payout of 150k for severance package, or a 175k relocation bonus 2 years later, or a stock payout 8 months later as your startup gets acquired? Or any number of life events that might affect how much you want to auto contribute?

I want more predictability than the market offers. The market is 100% risk. You can expect it to give you a certain rate of return over a certain period of time, but what happens if the market crashes a year before your target retirement date and still hasn't started recovery? A CFP looks to get you to your goals even under such circumstances through counter market securities.

150k isn't that much in the long run. I would still put it in index funds at the same asset allocation (80 total stock market/20 international or whatever your asset allocation is). If you're a year away from retirement then most of your funds should be in bonds by then.

 

[wagrxm2000]

It's a rarity for me to get upset with a complete stranger but this person is so ......... that I'm done here.

Maybe one more response.

You want predictability. Go 50/50 stocks and bonds.

How does a person not understand, you control your risk......You control your predictability.

Does this person think when the market is down, they will still be up?

For heaven's sake though, never give people money for no reason.

 

[wazoodog]

It's a rarity for me to get upset with a complete stranger but this guy is so ......... that I'm done here.

Maybe one more response.

You want predictability. Go 50/50 stocks and bonds

For heaven's sake though, never give people money for no reason.

Yeah I hear you. I'm not a troll, I swear. But anyway, I am done for tonight as I have to attend to family and other obligations. Have a good weekend.

 

[Momus]

What do you do when you get suddenly get a lump sum payout of 150k for severance package, or a 175k relocation bonus 2 years later, or a stock payout 8 months later as your startup gets acquired? Or any number of life events that might affect how much you want to auto contribute?

I want more predictability than the market offers. The market is 100% risk. You can expect it to give you a certain rate of return over a certain period of time, but what happens if the market crashes a year before your target retirement date and still hasn't started recovery? A CFP looks to get you to your goals even under such circumstances through counter market securities.

This CFP is selling snake oil to you, he said he could avoid market crash. The best one is charming, he can be your best friend. I guess he already got you by the balls.

Market average is market average. In the long run, you get 9-10/yr% including the crash without going in and out trying to best the market. There is 0 consistency that your "adviser" can deliver for you. Most tactical allocation funds underperform the market by a wide margin. Do Tactical-Allocation Funds Deliver?

Not only you will have less money in retirement, you will pay through your nose in fees for 90% chance to underperform the index. Can't get any better than this.

 

[Momus]

Anyone here old enough to want to invest in this fund?

SEQUX – Sequoia Fund Stock Price | Morningstar

SEQUX - Sequoia - Review the SEQUX stock price, growth, performance, sustainability and more to help you make the best investments.

www.morningstar.com

Lessons from the falling of fund giant Sequoia

It’s a cautionary tale for investors who have held or admired funds for many years to make sure that the fund they are looking at today is the same one — in terms of character, style and management ability —...

www.seattletimes.com

I used to envy their performance Glad, I didn't put a single cent there. They are literally trash now. I could name 5 legendary funds that I'd bet my life savings 10 years ago because of brilliant "manager" but I bailed when I knew better.

 

[wazoodog]

So you don't believe me when I say no time is put in when doing it yourself and you can predict with 100% certainty your portfolio will perform exactly as the market?

Yes, I guess that's part of it. Especially because you say it involves effort autocontribution and nothing more, but and another says it involves:

...managing their own investment, too lazy to read a book to better inform themselves and rebalance once a yr.

Management and reading enough to know how to rebalance sounds like a certain amount of time has to be invested. And that time could be 5 hours for someone who's interested, but would it be the same for someone who has no interest and keeps putting down the book? I'm skeptical that I could manage progress of all my financial goals at the same level as my CFP without time investment.

Managing the investment account (or 3-fund index fund strategy) is just part of the picture. You're on to something with this question:

Please tell me all the things your CFP does for you.

Although a CFP collects his fee based on %AUM, the scope of work is quite a bit broader than just managing assets the fee percentage is based off of. It's a bit tedious for me to list all the things they do so I won't, but if you're ever curious enough I guess you can go and speak to one (probably at no or minimal cost) - they would probably do a better job describing what they do for clients. At a high level, they manage progress of your financial goals. An example of 1 financial goal might be finding the best life insurance policy that integrates well into overall investment strategy - maybe an indexed universal life policy. As risk tolerance changes, or market conditions change, job changes, or unforseen life events occur (or even don't occur as predicted)...a re-assessment might distribute the balance in the IUL to other investments while changing to a very different type of life insurance policy - again researched by the CFP to find the one that best fits overall strategy. The balance in an IUL wouldn't necessarily be part of the %AUM, even though the CFP researched, advised, and set it up. And frankly, it may not take them that long - but it's not about how much time it took the CFP...it's more about how much of my time was saved. This is just 1 of many things a CFP does outside of the AUM, that is included in the %AUM fee.

A 2 or 3 index fund strategy may not confidently cover every financial goal in someone's life, unless you're Warren Buffet's wife.

Is it me or does wazoodog sound like that hedgehog guy?

I'm not sure who hedgehog is, but I assume he knows more about the topic than I do. I think one of the previous posts surmised if I was a CFP. If I was I'd almost definitely be doing everything diY.

 

[Chrish]

Going off topic,

surprised these many people voted 2 mil and up. I only know of couple on this board. Or majority of them are just multi BMB created?

 

[WVUPharm2007]

Although a CFP collects his fee based on %AUM, the scope of work is quite a bit broader than just managing assets the fee percentage is based off of. It's a bit tedious for me to list all the things they do so I won't, but if you're ever curious enough I guess you can go and speak to one (probably at no or minimal cost) - they would probably do a better job describing what they do for clients. At a high level, they manage progress of your financial goals. An example of 1 financial goal might be finding the best life insurance policy that integrates well into overall investment strategy - maybe an indexed universal life policy. As risk tolerance changes, or market conditions change, job changes, or unforseen life events occur (or even don't occur as predicted)...a re-assessment might distribute the balance in the IUL to other investments while changing to a very different type of life insurance policy - again researched by the CFP to find the one that best fits overall strategy. The balance in an IUL wouldn't necessarily be part of the %AUM, even though the CFP researched, advised, and set it up. And frankly, it may not take them that long - but it's not about how much time it took the CFP...it's more about how much of my time was saved.

Sweet lord this dude is taking you for a ride. Please tell me you aren't buying a product that is mixing investments with life insurance. Those pretty much always screw the consumer.

 

[wagrxm2000]

Sweet lord this dude is taking you for a ride. Please tell me you aren't buying a product that is mixing investments with life insurance. Those pretty much always screw the consumer.

He drank the Kool aid.

Never drink the Kool aid kids.

He is still stuck thinking he has to put time into this. He could use the time he spends with his CFP to set up an account and be done with it.

He'd then have more time on his hands.

Why can't this person realize, no thought is put into this. You set up your stock/bond ratio, autocontribute, and never think about it for decades.

My gut tells me he thinks during a recession his CFP will outperform not realizing the CFP is already so far behind, you don't have to worry about a recession. That's when you get stocks for cheap.

But this guy is stuck in his ways. He's been bamboozled and can't accept it.

 

[wagrxm2000]

Just to give an example, does anyone here move their 401k around?

Yeah I didn't think so.

There's retirement funds too for the extremely lazy person.

 

[wazoodog]

Sweet lord this dude is taking you for a ride. Please tell me you aren't buying a product that is mixing investments with life insurance. Those pretty much always screw the consumer.

I agree that it's terrible for making the most money, but what if the client has the following requirements:

- Super risk averse, wants less risk than the market
- Wants a >1M life insurance policy
- Wants liquidity
- But wants a better rate of return than keeping in the bank, and beat inflation

What's the best option?