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If I got a chunk of change and I had no concrete idea of something to do with it, and I figured I only want to even think about touching it in 5 years, then I would put it into index funds at 75% s&p 500/25% international, and let it ride. If you feel all equities is too risky then the flow chart also has information about bonds etc. It depends on your age and your plans
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Jan 25, 2024 01:40
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Rochallor posted:
Normal treasuries have no practical limit (billions maybe). It would certainly be reasonable to just go all in on a 5 year Treasury and not think about it again until maturity. This is the safest, most predictable option. I Bonds, which are a special non-marketable thing offered to individuals by the Treasury, do have a limit of $10k per year per person. I Bonds are cool and good and now is a very good time to buy your $10k worth if you have a lump sum to invest. They are inflation and deflation protected which is unique in fixed income investments. I Bonds are as safe as normal treasuries, but their return varies based on inflation. Index funds question mark is also a reasonable idea. I would consider 5 years to be pretty short for a long term investment, but I think if you are willing to take risk, it wouldn't be crazy to invest up to 50% of your money in a broad US or total world equity (stock) ETF. The stockmarket can move 10+% or more in a year in either direction, so there is risk here.
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Jan 25, 2024 02:00
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Rochallor posted:I inherited a chunk of change a few years ago and it has been sitting in my savings account earning itty bitty returns since then, and I figured it's long past time I do something with it. I'm leaving the US in a few months and won't need to access any of my savings or pay any bills out of my US accounts, so I want to invest the vast majority of it (about $150,000). I do want to use that lump sum eventually but I shouldn't need to touch it for around 4 or 5 years, beyond re-investing the interest. Do you have an earned income? If so, if you haven't maxed out 7k into a Roth IRA, you might as well do that, since that will be tax advantaged (no taxes on the gains), though you won't be able to withdraw any gains on it until you turn at least 59.5 (and will need to wait 5 years to withdraw the principal if you don't already have a Roth IRA). Similarly, if you have a workplace 401k/403b/other account you can contribute to, if you put in contributions as Roth and roll it over to the IRA, you can access the principal in the same fashion, and the gains when you hit 59.5. There are also some educational savings accounts available if you have any kids that will be going to college in the US, which may or may not be worth it to you. Then, for whatever you put for other places, its a question on when you will need the money. A stock index fund will have the best long-term growth, but will also be more volatile, so it isn't reliable for a fixed withdrawal date. Bond index funds are more stable, but lower growth. CDs and savings accounts can be thought of as 100% guaranteed as safe in your case, since the FDIC insures up to $250,000 so you are safe if the bank goes under. So basically, I would say whatever percentage you are planning on holding for 10+ years should be thrown into a stock index fund, while stuff you want in 5 years should probably hang out in CDs. Note there are multi-year CDs out there (eg: maybe a 5 year CD would be good in your case).
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Jan 25, 2024 02:05
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Rochallor posted:I inherited a chunk of change a few years ago and it has been sitting in my savings account earning itty bitty returns since then, and I figured it's long past time I do something with it. I'm leaving the US in a few months and won't need to access any of my savings or pay any bills out of my US accounts, so I want to invest the vast majority of it (about $150,000). I do want to use that lump sum eventually but I shouldn't need to touch it for around 4 or 5 years, beyond re-investing the interest. In 4 or 5 years, what are you going to use this money to do?
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Jan 25, 2024 02:37
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MegaZeroX posted:Do you have an earned income? If so, if you haven't maxed out 7k into a Roth IRA, you might as well do that, since that will be tax advantaged (no taxes on the gains), though you won't be able to withdraw any gains on it until you turn at least 59.5 (and will need to wait 5 years to withdraw the principal if you don't already have a Roth IRA). I forgot to mention it upfront, but for health-related reasons I am not saving for retirement, so that's not a factor (although I do have a small pension if it comes to that). drk posted:Normal treasuries have no practical limit (billions maybe). It would certainly be reasonable to just go all in on a 5 year Treasury and not think about it again until maturity. This is the safest, most predictable option. Ahh gotcha, thanks for the clarification. an iksar marauder posted:If I got a chunk of change and I had no concrete idea of something to do with it, and I figured I only want to even think about touching it in 5 years, then I would put it into index funds at 75% s&p 500/25% international, and let it ride. If you feel all equities is too risky then the flow chart also has information about bonds etc. It depends on your age and your plans I'm still taking baby steps but I think I may try putting a fraction into an index fund just so I know how to do it later on. Thanks for the advice everybody. I'm gonna go into the bank tomorrow and I feel a lot more confident knowing what questions to ask / be sure I'm not getting fleeced.
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Jan 25, 2024 02:37
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Rochallor posted:I forgot to mention it upfront, but for health-related reasons I am not saving for retirement Sorry. Wait what?
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Jan 25, 2024 02:59
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Rochallor posted:I'm gonna go into the bank tomorrow and I feel a lot more confident knowing what questions to ask / be sure I'm not getting fleeced. Oh honey, no. Big retail banks are not what you’re looking for here.
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Jan 25, 2024 03:02
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Duckman2008 posted:Sorry. Wait what? I ain't making it to retirement age, but it's okay, I've made my peace with it. Guinness posted:Oh honey, no. Big retail banks are not what you’re looking for here. Aha, I knew there had to be something. Would it be a bad idea to just go in and present basically what I'm thinking of doing? My credit union, which I figured would be more trustworthy, also has a financial advice person, but they're on leave apparently for the next couple weeks.
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Jan 25, 2024 03:09
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Rochallor posted:I ain't making it to retirement age, but it's okay, I've made my peace with it. JUST ABOUT anyone that you find who will call themself a "financial advisor" is a sales person. Their job is to take your money from you. Some may take a little less, if you're lucky. You COULD go find a fee-based financial planner for like, some thousands of dollars, but they will tell you basically the same things as this thread will and will cost thousands of dollars, but they should have a fiduciary tag and might help you sleep better at night. What will you be using the money for in 4 to 5 years? And for how long will you expect to need this money to last? It sounds like you have kind of a unique circumstance here and you might lean more toward "assume they're basically at traditional retirement age right now and go ultra-conservative" instead of "relatively young still let's let the magic of compounding do its thing all-in VTI or maybe a target-date fund" (which is where most goons in this thread seem to be at).
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Jan 25, 2024 03:48
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Rochallor posted:I ain't making it to retirement age, but it's okay, I've made my peace with it. But is there someone you'd rather leave some money to when you go, such as a relative or a charitable organization? Rather than letting your money just sit and do nothing, it can continue to earn and be something you could pass to someone else (if you don't need it for unexpected healthcare reasons along the way, or medical science advances faster than we expect and you have suddenly attractive treatment or life extension options available later on).
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Jan 25, 2024 03:49
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CubicalSucrose posted:JUST ABOUT anyone that you find who will call themself a "financial advisor" is a sales person FA work is weird, because there are some FAs that really do some heavy lifting in portfolio management work. Their reputation is what the other 90% of people who call themselves FAs are trying to piggyback on.
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Jan 25, 2024 03:55
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hello all long time no see, you may remember me from such threads as "i love being a gambling addict" and "where'd all my money go" anyway, i stopped incinerating money and am somehow now in my late thirties and decided to look at my 401k allocations for the first time in a long time (one of my friends is on a weird FIRE kick right now. i am not.) I'd like to retire somewhere around 2040 (but 2045-2050 more likely, especially since i won't be 59 1/2 until then) and wanted to get some thoughts on my extremely simple current allocations--is this TOO simple? for reference I'm at about 15% of what i expect to need in retirement currently (125k-ish): 2% - VGSTX (vanguard star) 2% - VFORX (vanguard 2040) 16% - VFIFX (vanguard 2050) 80% - VFFVX (vanguard 2055) (~70% of this is 401k, ~30% is roth ira) i don't have any intention of touching this money until the day i retire so no liquidity/etc concerns, i figure that with target date a bit after i plan to retire i can get a little more volatility in near the end of my career and if Number Go Down then i'll just work a few more years. i'm paying off a house, only kid's grown and moved out (surely they never need money after that, right?), not sure what other info would be helpful. mostly this is just a lot of words to ask if i need to diversify. okay, cool. thanks!
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Jan 25, 2024 04:19
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Spokes posted:hello all long time no see, you may remember me from such threads as "i love being a gambling addict" and "where'd all my money go" Simpler is better. Consolidating into max 2 of those funds might make more sense. 20/80 VFIFX / VFFVX will get you a ~2054 target date fund, which...seems kinda weird. I'd consider going all one or the other and never thinking about this again. However! There's nothing "wrong" or "bad" about what you currently have, it's just "weird" and "not particularly thought out" (so good on you for checking in here).
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Jan 25, 2024 04:25
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Mons Hubris posted:Is there ever a good reason to bother with small cap indexes like the Russell 2000? Yes! While the S&P 500 is fine for capturing the US market's performance, complementing it with a fuller range of mid-cap and small-cap funds, such as a Russell 2000 index, is a great way to allocate across the entire market. Here are three good reasons to bother with small cap indexes: 1) You will capture tomorrow's market leader while it is still small today. Of course, any given company's share of the Russell 2000 will be pretty darn small, but holding an early Tesla or Nvidia can boost your portfolio by an extra percent or so, depending on the time frame and who's moving up/down the indexes. 2) Small-caps zig when other size categories zag. Yes, all the US indexes are extremely correlated, but as someone who uses separate indexes in my workplace 457b and checks the tickers too often, I do notice when my small-cap index magically jumps 5% as the S&P 500 posts a more modest 2%. Other times it does worse than its bigger siblings. Is that chance of outperformance very meaningful in light of how little space the small-cap index occupies in my portfolio? Sure, but... 3) ...the diversification benefit keeps me from fiddling any further. Instead of decision paralysis or over-handling my funds like they're a shrinking bar of soap, I enjoy passive investing because there are enough slightly different moving parts that the odds of weathering tomorrow's crises are that much greater. Evidence from the 2008 financial crisis shows that the diversified investor bounced back sooner, and while history won't repeat perfectly, it will nonetheless have to deal with my globally diverse funds across all market caps.
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Jan 25, 2024 04:51
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Thanks! I was debating whether to put like 5-10% of my Vanguard allocation in there and that seems compelling. Right now I’ve got almost everything in VTSAX plus a very little in VGT but I have been looking to diversify a bit.
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Jan 25, 2024 06:04
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Mons Hubris posted:Thanks! I was debating whether to put like 5-10% of my Vanguard allocation in there and that seems compelling. Right now I’ve got almost everything in VTSAX plus a very little in VGT but I have been looking to diversify a bit. VTSAX has the whole market already. It's "as-diversified" as one can be (within the US, for equities). There are arguments for small-cap and value tilts, which lead to a ton of debate. https://www.bogleheads.org/wiki/Small_caps At the end of the day, a small tilt (probably) won't make a meaningful difference one way or another. And it's uncertain which way that difference will fall.
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Jan 25, 2024 06:07
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With the context of you already being in VTSAX, using a small-cap index would represent a tilt, which tempts me sometimes but I've been sticking to cap-weighted indexes. Small-cap advocates like to bring up that total market indexes barely contain small-caps and need a bit of a tilt to really affect a portfolio, but that's where fiddling takes hold and I prefer simplicity.
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Jan 25, 2024 06:32
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Spokes posted:hello all long time no see, you may remember me from such threads as "i love being a gambling addict" and "where'd all my money go" I have to post that obviously you need to get on more game shows.
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Jan 25, 2024 13:23
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Duckman2008 posted:I have to post that obviously you need to get on more game shows. fund managers HATE this one trick CubicalSucrose posted:Simpler is better. Consolidating into max 2 of those funds might make more sense. that makes sense, i've moved it all to 2055. appreciate it! see you all in five years Spokes fucked around with this message at 19:12 on Jan 25, 2024 |
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Jan 25, 2024 18:01
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Rochallor posted:I forgot to mention it upfront, but for health-related reasons I am not saving for retirement, so that's not a factor (although I do have a small pension if it comes to that). This may be too personal and it's fair enough if you don't want to talk about it. But please consider there are three cases here: 1. You save more than you need and do not survive to retirement. 2. You save for retirement, and between now and that age, medical science improves and you survive into retirement, and are able to afford that expensive medical science to sustain yourself at a reasonable quality of life 3. You don't save for retirement, you survive to retirement for the above reasons, but are destitute, or cannot afford life-saving/QOL-preserving treatments, or can only afford those and not any sort of decent living standard. Now, maybe you just don't believe 2 or 3 are possible, or daring to hope for scenario 2 is too much for you, or whatever. Without any more details I cannot argue that it's a real hope. But #1 is so, so much better than #3, by such a huge amount, that it may well be worth your while to save some of your extra income - if you can - against that chance that #3 could happen. And if you still wind up in category #1, someone you love will inherit your money and that won't be such a terrible thing either. For this reason, unless we are talking you are terminally ill and have three years or less to live, I think it's better to plan for and save for a long-term survival and life. Winding up destitute in your older years, especially with serious medical problems, is loving awful and is worth a lot of effort and today to try to avoid.
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Jan 25, 2024 19:20
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My wife has an individual Fidelity account that she hasn't touched before we were married. It has approximately $3500. It looks like it's an individual investment account and the money is held in FIDELITY GOVERNMENT MONEY MARKET (SPAXX). I have been receiving a tax statement but it's usually for pennies or nothing. Is it possible to roll this over into a Roth IRA or should I just cash it out? If I cash it out, what taxes should I expect? We make no contributions to this account otherwise and currently has a Roth IRA with Vanguard.
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Jan 27, 2024 15:07
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DTaeKim posted:My wife has an individual Fidelity account that she hasn't touched before we were married. It has approximately $3500. It looks like it's an individual investment account and the money is held in FIDELITY GOVERNMENT MONEY MARKET (SPAXX). SPAXX doesn't experience capital appreciation, its cash. Its like a bank account, the only taxes you pay on it are on the interest it earns, which it sounds like is almost nothing. Withdrawing the money should be a non event from a tax perspective. If you don't need the money then moving it to a Roth IRA (assuming your wife meets the income requirements to contribute to a Roth IRA) and investing it is probably a good idea. You should be able to ACH the money from SPAXX directly to a checking account at a regular bank or possibly even your account at Vanguard. Personally I always max out my wife's Roth IRA each year because even though she doesn't work the fact that we file our taxes jointly means that she can use my income to qualify to be able to make Roth IRA contributions. Antillie fucked around with this message at 15:29 on Jan 27, 2024 |
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Jan 27, 2024 15:18
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It looks like SPAXX returned 5% over the last year so that shouldn’t really be pennies on $3500.
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Jan 27, 2024 15:45
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Antillie posted:SPAXX doesn't experience capital appreciation, its cash. Its like a bank account, the only taxes you pay on it are on the interest it earns, which it sounds like is almost nothing. SPAXX is tied to the core interest rate and is currently about 5% APR. In the last decade of insanely low interest rates it was paying sub 1%. Of course 5% payed monthly on $3.5k is still a tiny amount.
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Jan 27, 2024 15:45
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Yeah SPAXX has been returning about %5 recently. But its taxed as ordinary income and we don't know what tax bracket OP is in.
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Jan 27, 2024 15:48
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We're married filing jointly and earn $150K pre-tax She's a SAHM going to school part-time to earn her BA in English. I would have to dig into the details but it may have been what's left from her inheritance from her grandfather. I'll leave it up to her what she wants to do with the cash then.
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Jan 27, 2024 18:27
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I just got a financial advisor for the first time and he suggested lots of changes which seem to make sense to me but also I know nothing so I want to share here to see if this mostly makes sense. He suggested maxing my 401K with the following allocation percentages: - 40.00%Legal & General S&P 500 DC CIT - 20.00%Baird Aggregate Bond Inst - 18.00%American Funds EuroPacific Gr R6 - 16.00%Legal & General S&P 400 DC CIT B - 6.00%Legal & General S&P 600 DC CIT I should have 6 months savings which I currently do. It's in a HYSA earning 4.35%. I'm trying to save for a house over the next 5 years. The investments will be primarily in mutual funds and ETFs. The asset management fee is 1%. My portfolio would be rebalanced quarterly. I've got two old 401k accounts. One with 10K and one with 50K. He suggests either rolling the 50K over into my current work retirement plan or leaving it where it is. For the 10K account, he's suggesting maxing out a backdoor roth IRA conversion and rolling the rest over into my current retirement account. Lastly, I've got a car loan that's got a lower interest rate than the HYSA so he suggests just continue making regular payments on it, nothing more.
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Jan 28, 2024 19:12
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huhu posted:I just got a financial advisor for the first time and he suggested lots of changes which seem to make sense to me but also I know nothing so I want to share here to see if this mostly makes sense. What are all the ways this financial advisor makes money from you?
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Jan 28, 2024 19:20
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huhu posted:He suggested maxing my 401K with the following allocation percentages: This seems like a reasonable allocation, but we'd need to see your list of 401k fund options to be sure. That international fund is pretty expensive so there might be a better option there. Also, 20% bonds might be considered a bit conservative depending on your age and retirement goals. huhu posted:I should have 6 months savings which I currently do. It's in a HYSA earning 4.35%. Good. huhu posted:I'm trying to save for a house over the next 5 years. The investments will be primarily in mutual funds and ETFs. The asset management fee is 1%. My portfolio would be rebalanced quarterly. Only put your future down payment in the market if you don't care about the timeline. If you're serious about buying in 5 years, put it in something safer like treasuries, a CD, or your HYSA. Paying 1% of your portfolio annually adds up to a ton of money over time. It would be best if you became comfortable doing this stuff yourself for free (it doesn't have to be complicated). Otherwise, a fee-only advisor (flat fee unrelated to amount of assets) would be much cheaper in the long run and would probably give you the same advice. huhu posted:I've got two old 401k accounts. One with 10K and one with 50K. He suggests either rolling the 50K over into my current work retirement plan or leaving it where it is. For the 10K account, he's suggesting maxing out a backdoor roth IRA conversion and rolling the rest over into my current retirement account. Depends on fund options and fees for your old 401ks vs your current one. Your current one is most likely good, so rolling into it seems fine. Anyway, converting your 401k to Roth will not "max it out". The yearly limit is on contributions, not conversions. Doing a backdoor Roth is almost never a bad idea, but it would make more sense to do it with cash if you can, and treat both of your old 401ks the same. huhu posted:Lastly, I've got a car loan that's got a lower interest rate than the HYSA so he suggests just continue making regular payments on it, nothing more. Makes sense. runawayturtles fucked around with this message at 19:51 on Jan 28, 2024 |
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Jan 28, 2024 19:43
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huhu posted:I just got a financial advisor for the first time and he suggested lots of changes which seem to make sense to me but also I know nothing so I want to share here to see if this mostly makes sense. In order: -The mutual funds and allocations look fine. It was difficult to track down the exact fee structure of Legal & General mutual funds, but all three funds appear to have rock-bottom expense ratios, with the S&P 500 one being 0.01% for example. As long as there's no hidden "front-end load" fee, aka "pay us up front before we invest anything" fee, those look good. The portfolio you've listed is an "80/20 portfolio" of 80% stocks, 20% bonds, tilted toward US stocks, and in roughly the proportions one would expect from many target date retirement funds. Given these are in your 401k and you know the professionally recommended percentages for yourself, you really don't need to give up 1% per year. For that matter, you could get very similar results through a target date fund or a balanced ETF like AOA (also an 80/20 portfolio, also globally diversified, rebalances itself, all-in-one fund, 0.15% expense ratio). Let me get your game plan right: is your workplace 401k going toward paying for a house in 5 years? How old will you be by then? Is retirement in sight? Many workplace plans allow for taking out a loan on your 401k and paying yourself back, but nobody knows where interest rates will be in 5 years and the paperwork to get your money out could screw you over any number of ways, from timing to withheld taxes. If you'll be retired and can take the money out scot-free, then I'd say go for it, but if retirement is over 5 years away I would probably keep house funds out of a 401k. Just my take! I've seen this play go right for some people and wrong for others, is all. Consolidating 401k accounts shouldn't be a big deal. That advisor would get 1% of the proceeds every year if they all combined in your work plan, so he's kind of incentivized to recommend that. If you don't have a Roth IRA, I would definitely start one, rollover or no. As in, go to Vanguard/Fidelity/Schwab, open a Roth IRA, and chuck $100 in there to get the five-year countdown started so that you can withdraw money if/when you need to in the future. (That's universal advice for any and all US goons, unless they're rich enough to not qualify for a Roth IRA, in which case have fun learning about backdoor contributions.) If you want/need professional financial advice beyond goon wisdom, you could save gobs of money by hiring a fiduciary planner for a one-time fee through napfa.org and moving your money around accordingly. Having an emergency fund in a HYSA, especially one yielding over 4%, is the most important first step nowadays and you're already there, congrats on that. 
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Jan 28, 2024 19:59
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Owning the S&P 500 and the 400 and the 600 would have me asking pointed questions to any financial adviser. Edit: oh I see, the 400 is mid cap and the 600 is small cap. Feel like that should be in the fund name.
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Jan 28, 2024 20:22
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My 401k options are through American Funds and they all have over 1% ER's, so I'd pay close attention to the fees if nothing else.
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Jan 28, 2024 20:27
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Echoing what others sid about how it doesn't have to be complicated. I used to have my Roth IRA spread between five different Avantis funds, but switched to a "fund of funds" (AVGV) solution comprising of the same five funds I had before. Sure the exact %s might vary slightly whrn I was manually setting them, but the rebalancing is done for me. I sleep better not second-guessing myself too, knowing that smarter people than I are managing it. My 401k though, that's just in a target date fund with Vanguard.
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Jan 28, 2024 20:37
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Adding some details I didn't before - I'm in my early 30s, no partner, no kids, not planning for kids.CubicalSucrose posted:What are all the ways this financial advisor makes money from you? $500 / year fee for meetings once every 6 months to review things. There's also the asset management fee. Which I'm thinking I just maybe don't do with all the advice here? quote:Only put your future down payment in the market if you don't care about the timeline. If you're serious about buying in 5 years, put it in something safer like treasuries, a CD, or your HYSA. I honestly don't even know if/when I want a house. I live on the road full time and it just kind of felt like a goal to start saving for. I guess I'd say I'm not really serious about buying a home in 5 years. quote:Paying 1% of your portfolio annually adds up to a ton of money over time. It would be best if you became comfortable doing this stuff yourself for free (it doesn't have to be complicated). Otherwise, a fee-only advisor (flat fee unrelated to amount of assets) would be much cheaper in the long run and would probably give you the same advice. quote:Let me get your game plan right: is your workplace 401k going toward paying for a house in 5 years? quote:(That's universal advice for any and all US goons, unless they're rich enough to not qualify for a Roth IRA, in which case have fun learning about backdoor contributions.)
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Jan 29, 2024 02:24
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1% AUM fee is pretty “standard” but it’s also a huge rip off for picking a few index funds that you can do yourself. It adds up to hundreds of thousands of dollars of lost compound gains over the years.
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Jan 29, 2024 02:33
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Guinness posted:1% AUM fee is pretty “standard” but it’s also a huge rip off for picking a few index funds that you can do yourself. It adds up to hundreds of thousands of dollars of lost compound gains over the years. Does it ever actually make sense? Maybe if you want to be really aggressive or something? But, that still feels like trying to time the market. So...
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Jan 29, 2024 02:59
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huhu posted:I'm (fortunately) in backdoor contributions territory. The last time I looked into it it felt a bit overwhelming. Is that a thing this advisor would charge to help me with? He said he could but maybe I just try again and do it myself. If you have no existing money in a Traditional IRA, it is braindead easy; most brokerages will even have a little button that says "Convert to Roth IRA" to do it. Then you have one extra form (Form 8606) to fill out each year when you do your tax return.
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Jan 29, 2024 03:02
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huhu posted:Does it ever actually make sense? Maybe if you want to be really aggressive or something? But, that still feels like trying to time the market. So... Small rant incoming, but my personal hot take opinion is that your typical financial advisor out there that most regular people deal with rarely makes sense or are worth anywhere near what they charge in fees, especially AUM or load fees. Over the past couple decades, long term investing has been completely democratized, fees have been all but eliminated, and generally good straightforward guidance is freely available. And that's assuming they aren't also selling you garbage products like whole life insurance, a whole separate rant. The whole financial planning industry thrives on perpetuating the fear that investing is complicated and that if you make the wrong decisions you'll lose all your money. That it can't possibly be straightforward and comprehensible to a normal person. And then they sell you a false sense of confidence in their over complicated and overly expensive portfolios and management strategies because it's complicated but I know the tricks! But there are no tricks or secret information. Passive broad-market index funds have been shown over and over again to be the most reliable and cost-effective strategy on a risk-adjusted basis. Most people cannot and will not consistently beat the average, so just invest in the average. It's easy, it's cheap, it's reliable, and it's boring as hell. And it's really hard for financial salesmen to make a buck on it. It is possible to find fee-only financial planners out there, that will probably tell you most of the same info. But if you need to hear it from a professional this is the way to go. But they can be tricky to find because it's a lot less lucrative than riding the 1% AUM gravy train for a couple hours of work per year. ... Okay okay, to be a little less absolutist, if the comparison is between using a financial planner or not investing at all, or gambling your retirement on memestocks, then maybe there is "value" there. But only in the sense that you're paying them to save you from your own bad decisions and worst impulses. And ohhh boy are you paying them. 1% AUM per year doesn't sound like a lot but if you do the math it sure as hell is a lot of money. Likely hundreds of thousands of dollars over the course of your career/life, or more. That's a pretty strong incentive to understand this stuff, right? I'd posit that if you've come to this thread and are asking these questions you're already on the right path to figuring this stuff out yourself. For a few hours per year to set up and automate a plan you can take control of understanding your finances and save an enormous amount of money. And many of us find it empowering to be in the driver's seat. Who knows your life situation, wants, and needs better than yourself? Then maybe some day when you're a multimillionaire dealing with estate planning, trusts, elder care, and optimal draw down and tax strategies then consult with a specialist in those particular areas, which a generalist financial planner is unlikely to best help with anyway.
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Jan 29, 2024 04:51
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huhu posted:- 40.00%Legal & General S&P 500 DC CIT These could be VTI. huhu posted:- 20.00%Baird Aggregate Bond Inst This could be BND. huhu posted:- 18.00%American Funds EuroPacific Gr R6 And this could be VXUS. You would have functionally the same portfolio for waaaaay less in fees. I know this isn't an option inside a 401k but whenever I see a financial advisor put someone in a needlessly expensive version of the three fund portfolio it makes me a little upset.
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Jan 29, 2024 22:53
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huhu posted:Does it ever actually make sense? Maybe if you want to be really aggressive or something? But, that still feels like trying to time the market. So... For someone who is just investing in index funds and taking your money? No. And I say this as someone who does have money with an investment firm (but less than half my total portfolio, a fee of 0.6% or so, financial planning is included and it works out to less than some people I know pay for solely financial planning, they actually invest in stocks, the rest of my portfolio is in funds I do myself, so I regard it as diversifying the ways in which I invest and even then lots of people would (and some have) told me it’s dumb and I should get out of it). The other night a friend told me he only invests in gold bc he’s scared, so at least I’m making better decisions than he is.
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Jan 30, 2024 01:24
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