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What do you do when you change companies? You don't roll over?
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What do you do when you change companies? You don't roll over?
Since this is a different topic I will respond
You call vanguard and say can you roll over my account to you guys.
And they do it.
You really need to believe me, it's very simple
Ok I misunderstood you earlier.
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Guess you actually have to call the place where it's at first but vanguard would help if needed I'm sure
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Rollover is very easy, I've done it 3-4 times. But you can also leave the money in your previous 401k if you want.
How much liquidity do you need? I just have a $20,000 cash reserve for any emergency in a high yield savings account at all times. Which is probably excessive. But I work a job that could go *poof* at any moment so I feel like I need it.
But I'd do a term life plan. Build an emergency fund. Then invest the leftover into a simple mutual fund like VTSAX or something.
I get that you are "risk adverse" but that aversion is going to net that underwriter the majority of any gains you would potentially make from whatever index they are investing in. It just doesn't make any sense long term. Long term it's like you are paying dollars because you don't want to risk losing pennies.
All people need to invest in is VFORX if you plan on retiring in 2040
Set it and forget it
It will automatically increase your bonds through the years and will even invest in an inflation fund after retiring.
Set it and forget it
It will automatically increase your bonds through the years and will even invest in an inflation fund after retiring.
I have a question. If you are risk adverse wouldn't you pick a target date fund and set an auto-contribute? Wouldn't that be the most risk-adverse strategy (and easiest?) possible strategy short of hiding your money in a mattress?
Does paying someone money to pick a fund for you actually make sense? How does it reduce risk? Surely say a Vanguard target date fund is the least risky investment strategy available?
Does paying someone money to pick a fund for you actually make sense? How does it reduce risk? Surely say a Vanguard target date fund is the least risky investment strategy available?
50/50 stock/bond = answer 1, 3, 4
Term life 30 yr, dirt cheap. Never buy anything but term life insurance. = answer 2
Yeah, your advisor definitely got your by your balls buddy. I don't think you can be helped anymore lol
I know a few people in real life like wazoodog.
So I suppose it comes down to the following reasons why someone would use a CFP:
1) Being risk-averse, or not familiar enough to know their risk tolerance level
2) Intimidated by the amount of information out there in books and on the web regarding management of personal finances (investing, estate planning, child education funds, legacy, tax efficiency) - hard to know where to even start planning, maybe don't even know how to organize their thoughts enough to set good financial goals
3) Lack of confidence in ability to discern what information is reliable, what's best for "me", maybe not even confident of their self-assessment on risk tolerance or how it might change 3-6 months down the road
4) The need to feel like it all has to be micromanaged (blame it on neuroticism - imagining unforseen issues popping up routinely that need prompt resolution, active status tracking on goals, etc.)
5) However, doesn't want to spend the time doing #2, and 4
The counter reasons seems to be:
1) Try being less risk-averse
2) A super-streamlined version of the information can be found on BH or this thread (or a book), and an 1 or 2 index fund can serve as the plan
3) This seems to remain the X factor...depending on the individual. Accept the word of #2, or spend as much time needed to feel confident that #2 is sufficient
4) Can't do anything about someone's personal need for micromanagement, but the plan itself doesn't need micromanagement
5) #2 and #4 means it doesn't take much as much time as thought
Is that about right?
I intentionally left out AUM fee. I think most clients know full well how much is going to AUM fee, they just feel that the fee is worth it for the reasons above.
If you really are interested in making money as a CFP, hopefully now you know how to drum up business.
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I am surprised this comment didn't get more replies. Somewhere out in the world BMB had a heart attack.
Bmb will defend the hell outta that for sure and he isn't wrong sometimes. Most 100% rental will start generating good cash flow after around 10 yrs, and you get the whole house after 30 yrs. The difference after leverage could be about 5% higher return than stock (15%/yr) with a lot of work for 30 yrs. But, a truly lazy person like me will sell and be done with it riding 10%/yr on the cash.
Am I the only one that didn't believe him?
He said he was a multimillionaire so let's assume a million is in housing. He just started by the sounds of it around 5 years ago since he just recently started talking about it.
He had to have like 3 to 4 million in total from mortgages if thats true.
Or maybe my math is wrong assuming he put 20%.
Unless he was talking about what he would have after everything is paid off
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If you rely on the passive income you normally get from rentals, you could also try REITs and high yield dividend stocks. Otherwise, low expense ratio, high diversified indexes are where the smart money is.
1. If you’re risk averse, paying off your mortgage at least nets your whatever your interest rate is. Consider doing some mortgage payoff acceleration if you haven’t paid it off already. This will give you more cash flow which can improve liquidity somewhat.
Paying off your house early will not give you the best return, but it will decrease your susceptibility to downturns. You can also throw a big chunk at your mortgage and have your bank recast it so your monthly payment is lower, which could be helpful in tough times. Or you can keep a larger stash as an emergency fund to power you through those tough times. None of these strategies will maximize your returns, but they will decrease your risks (which can be important).
2. Buy a 1 million+ term life insurance policy.
3. Increase your savings rate in the market. The more money you have in savings is a stronger retirement success predictor than whatever you invest in. If you have a heap of money invested in the S&P 500, you are better off than if you have a small amount invested as you have more wiggle room during down markets.
4. I also recommend reading the book Wealth by Virtue by Chad Gordon. It has a good overall explanation of why not to fear the stock market in the long term. It is full of good advice for many life scenarios.
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You didn't pick a retirement fund for your 401k?
Very wise of you.
The cash flow ($250/month) is not big enough for one to deal with tenants. However the equity is great since the price has more than doubled in 8+ yrs. I can sell it right now and walk away with 280k+... If I put that money in a high yield dividend index fund (VYM or REIT's), the payout will be ~9k/yr while my money is growing. On the other hand, that house has no room to gain more value.
It's a 15 yr note and I still owe ~54k on it. House worth 340-360k...
I only have ~80k equity on my other place cash flow for it is ~$500. I don't plan to sell that one.
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Thanks for the rec. Read the description and it sounds like a worthwhile read so just ordered.
For you Bogleheads out there, I ordered John Bogle's book as well.
Maybe deep down, I have this fear that whatever I touch when it comes to finances will end up a mess. Hence, using an asset manager has felt like a financial security blanket.
At this moment, I dont feel like I can confidently DIY. And the arrangement has worked well for me the past couple years (but I'm comparing to how i did before using any help). At least, I'm willing to read more and better understand. Maybe it will eventually lead to a DIY approach or maybe not, but I do feel I could stand to learn more about it.
Let me ask this way - is there ever a time or circumstance that you can think of where the use of a CFP to manage assets makes sense?
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Yeah I noticed that too. And I spent time reading about the topic in between as well. But this is a first for me...I never spent any time posting about this topic. At first it was kind of a drag, but now (a page of posts later) its somewhat interesting.
Answer: yes! I have considered a fee-only fiduciary advisor for consultation for general recommendations for more diversity of funds available within my 403b and Roth. I might still consult one eventually. But I just bought the Bogleheads Three Fund Portfolio book. I will read that first and then consult a fiduciary if I feel I need further advice.
I talked with Personal Capital’s advisers (they are a fiduciary—I would only consider fiduciary advisers) recently and liked them. But at the end of the day, they need to consistently outperform the general market to be worth their fee. I am not confident they will as the track record for advisers in general just isn’t that strong.
Great book. I find that less people recommend a bond fund now (or a smaller percentage), even on Bogleheads own forum. Though having a bond fund before this years downturn would have made sense.
Investing in a tax deferred account such as Roth IRA..
ETF vs. Index Fund? Which one is bett
ETF vs. Index Fund? Which one is bett
Does VYM have yearly dividend yield increased like individual stocks? It's usually 3-5% increased for good companies... If not, why not look at the top 20 holdings of VYM and invest in these stocks individually? in order to enjoy that these dividend yield increased..
I'm debating whether or not to roll over my Merrill Lynch 401K into the TSP now that I'm a federal employee.
I’m currently 0% bonds. I figure I have a long time to go before retirement? Not sure if it’s the right call (probably not) but I just pay more on my mortgage instead of owning bonds. I’m almost done paying it off.
I’m risk adverse...therefore I choose to mix investing and insurance and take typically a decade just to get the money back that I put back to even. Then I’ll make bond like returns. Oh you want to touch that money you’ve been saving in there and is yours? That’ll be a loan at 8%.
If you want international exposure and ml has a good one no. Tsp international is awful. They tried to fix it but trump and repubs stopped that. Can’t invest in China you know
I'm learning right alongside you.
Bogle's book is the overall idea, picking low cost index funds that most closely represent the overall market and ride with them till world's end. Taylor Larimore is the one who puts this into action as the three fund portfolio. Most bogleheads use some versions of this portfolio. If you feel the learning process daunting, I would start with Laurimore's book first. Or you can just read their webpage. Or one of wag's posts above basically sum it up.
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I'm beginning to think you don't pay for anything.
Tax deferred would be a 401k or traditional IRA, where tax is deferred until withdrawal. A Roth IRA is tax free. You should try to put investments with a higher expected return in a Roth, as opposed to traditional, so that they will be tax free.
Almost all ETFs are actually based on index funds, but an ETF can be traded throughout the day, while an index fund that is a mutual fund is only priced at the end of day. Over the long run, as long as you compare ETFs and mutual funds based on the same index, there won't be much difference. But beware that there are many ETFs out there to tempt you that are based on very narrow sectors, that use leverage, or a based on synthetic benchmarks such as the VIX volatility index, that you should stay well away from until you fully understand the risks.
VYM will pass on all the dividends they receive from their constituent stocks. If those stocks raise their dividends, the VYM dividend will also increase.
I try not to.
For those of you who have mentioned becoming a CFP or FA as a second career, I don't know how serious the comment was but if you are really considering it I think this would be helpful to know.
From the last few pages of posts, there was a niggling thought that all the rationale for DIY made sense but there was something more fundamental that, although touched on, wasn't isolated as the root of the issue. It really comes down to Active vs Passive investing.
The case some of you have presented is that passive investing is always going to be more reliably lucrative for the vast majority (or everyone), in every case. I'm certainly willing to look more into it, once recognizing what the primary hurdle is. Anyone would concede that passive investing isn't worth paying someone an AUM fee.
If you choose to actually pursue a 2nd career as a replacement source of income, you may have to be comfortable with selling active investing (AUM fee) - something you fundamentally disagree with. It's pretty hard to sell something you don't believe in.
There must be a decent number of CFPs that actually believe that what they do is truly the better option for their clients. Knowing that it's pretty hard to sell something you don't believe in, I wonder what strategy they use for their own personal finances. My guess would be a hybrid of active and passive.
*Assuming fiduciary duty*
From the last few pages of posts, there was a niggling thought that all the rationale for DIY made sense but there was something more fundamental that, although touched on, wasn't isolated as the root of the issue. It really comes down to Active vs Passive investing.
The case some of you have presented is that passive investing is always going to be more reliably lucrative for the vast majority (or everyone), in every case. I'm certainly willing to look more into it, once recognizing what the primary hurdle is. Anyone would concede that passive investing isn't worth paying someone an AUM fee.
If you choose to actually pursue a 2nd career as a replacement source of income, you may have to be comfortable with selling active investing (AUM fee) - something you fundamentally disagree with. It's pretty hard to sell something you don't believe in.
There must be a decent number of CFPs that actually believe that what they do is truly the better option for their clients. Knowing that it's pretty hard to sell something you don't believe in, I wonder what strategy they use for their own personal finances. My guess would be a hybrid of active and passive.
*Assuming fiduciary duty*
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Many (or most) pain management prescribers and KOLs believe that their judgement is the best option for the patient.
We're assuming fiduciary duty.
I'm not saying that there exists some or even quite few that sell something they don't believe in. I just don't think that describes all, or even half.
Not sure if the snake oil analogy works, but go to an east Asian traditional medicine clinic and you might get a recommendation akin to that. Regardless whether it works, they're believing in their recommendation.
Not sure if the snake oil analogy works, but go to an east Asian traditional medicine clinic and you might get a recommendation akin to that. Regardless whether it works, they're believing in their recommendation.
Wow. I never knew what a paragon of virtue investment managers are. I only wish that we healthcare professionals could live up to their example.
Well there you have it. HCP considering a 2nd career as an investment manager...maybe a contradiction.
We need to become medication managers. Charge 1% fee outside of what the PBM negotiated. I mean, sure, the patient could just go to a pharmacy and get it filled themselves and not pay me 1%. But I have so much knowledge about drugs that it's worth it to pay me 1%.
Who says that fee isn't already embedded somewhere? Just that the patient isn't paying the % fee directly to you.
I haven't been in retail/community pharmacy in a long time. Are there quotas on consultation and interventions? I remember brand to generic conversions were a metric. Maybe someone has already pre-determined how much medication management (plus other stuff) a pharmacist has to do so to their value is worth it, just that the pharmacist doesn't have as much say in it. But at least it's offset by a steady paycheck.
But back to original point, if you were a passive investor and then had to actively manage for the sake of having clients, I'd imagine it would be time consuming and frustrating to do all this extra work for something you dont believe in.
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You can find people like Rick ferri who doesn't rip off people like you. He put you in all index fund for hourly rate. Buy the advise as needed, not paying rip your face off fee.
Rick Ferri, Back in Business, Drops Bomb on AUM Fee Model
With his new firm, Ferri offers hourly, customized investment advice and says clients should only pay for what they need.
I first came across Rick Ferri's name when I was perusing BH last week. Specifically, this thread:
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4th post has a link to a Washington Post article.
The index card destroys that person's clearly paid argument/financial planners argument
Please stop
Are you searching articles that recommend advisors as you continue to try to convince yourself it's best to have an advisor?
I liked this guys response "The problem is, once you know enough to determine if a FP is "good", you no longer need a FP"
The index card destroys that person's clearly paid argument/financial planners argument
Please stop
Are you searching articles that recommend advisors as you continue to try to convince yourself it's best to have an advisor?
I liked this guys response "The problem is, once you know enough to determine if a FP is "good", you no longer need a FP"
I was, initially when I searched - but reading the thread was enlightening.. The thread discusses the article and most advise against it...no?
By the way Rick Ferri was mentioned here first by Momus so I just posted a link to where I first came across Rick Ferri. Did not add an opinion so not sure why you're assuming anything else - I did say in an earlier post I'm looking more into DIY investing. It's from BH, after all, so I think it's safe to assume most people are going to argue against the article. Rick Ferri makes some interesting points though.
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I don't know who Rick Ferri is but if he argues for an advisor there's not a single thing he could say that is true
Unless he says get a consult and do it yourself.
You posted a thread that has an article that argues for an advisor but simply uses the same talking points that constantly get proved pointless.
No one is saying they aren't useful, just not to let them take money from you. Get a consult only.
Ok, nevermind. But that was the gist of what he said - to get a consult and index on your own (plus a few more interesting points).
But again, that wasn't the point of the post. His name was referred to here, and I acknowledged that I came across the name before and pointed out where.
The ways 1 line in a post can lead to tangents here...
