What’s the point of financial advisers?

Yes, if you have enough money. Then they have access to managed funds that perform better. They also have time and expertise and experience to devote to managing money well. If you have less than a hundred thousand, you can manage it yourself.

They also take alot of your money To give you obvious advice.

The amount they take would have resulted in far more money in your accounts if you wait until retirement

First, a typical advisor charges 1%. less the more you have but its usually between 70 and 100 basis points.

besides savings the money, you have to know how to allocate it, and then how to spend it later when you retire (where do you take the money from? How much?)

3...2...1

Enter the Boglehead troll

I see Elizabeth Warren is campaigning on DataLounge today.

Are we doing counting songs now?

I loved the ones on Sesame Street.

I guess the could help you with tax issues? Whenever someone already has "enough" money saved, they seem to immediately start talking about how to get out of paying taxes on it.

R4 - lol. Exactly.

1% in fees is actually ALOT of money in the long run, if you include both the money and the compound interest it would have made over a lifetime.

Financial advisers are a complete ripoff—always pushing you to buy things that will make them lots of commission fees—whole life insurance being among the worst.

Avoid at all costs. Read some financial magazines instead and learn exactly what they know

My sense, and it’s just a sense, is that many financial advisors work well for those who are completely financially ignorant. The Ameriprise guys, for example.

I had a couple friends in 2010 who were paralyzed about investing. Small time investing, probably on the order of $10,000 in a 401k, that kind of thing. I encouraged them to jump into four mutual funds: small, mid, large, and overseas. I haven’t asked, but they must have done well. Probably doubled their money or better. I have, so they should have. But they had been completely afraid to get in at all and could have otherwise missed the market upswing.

Then there are the ultra rich, maybe, over $10 million in cash. They get real pros to advise them, because that is getting to just be too much money to handle oneself.

I’m smaller time, midway between the two examples, above. I enjoy managing my own money and minimizing my taxes myself. I make mistakes, but overall, I do ok.

The point of the financial industry is to take your money and transfer it to them.

Americans don’t learn personal finance at all so they either have to learn on their own or hire someone.

The rules of investing are actually pretty straightforward but many people are just too afraid.

I was once in a bank when an older woman came in with $500 and wanted to know how she could Invest it to make more.

The adviser, of course, gave her awful advice about investments—the main point being that she should just had it over to him.

My father was going to roll over her 401k into an IRA at retirement (at about age 75). An adviser actually started immediately at rates talking about annuities without asking him about how much other he might have or what his health was like.

Since I knew better, I convinced my dad to stick in annuities, not beholden to the ups and downs of the market as this was the money he was going to live on. If the stock market tanked, he would lose all he has saved.

How much do advisers get paid for getting people into annuities? They all immediately push those whenever you talk to them. There has to be a financial incentive (just like with whole life insurance)

R11, that’s really the point of capitalism. Everyone does that. I don’t mean to scold. Just expanding on your point.

That’s one message I would pass to a young person, except I wouldn’t want to terrify them: everyone is out for themselves, and will legally take your money if they can. Sometimes illegally. ((Ok, most people, almost everyone.)

R13, please reread your post. I think you messed up,

The purpose of any service there is?

- Out of convenience.

- To do it for you while you can use your time to do something else.

- You don't have a fucking clue how to do it (and you can't be bothered to learn how to do it yourself) so you hire someone else and you hope he knows what he's doing.

[quote] I enjoy managing my own money and minimizing my taxes myself. I make mistakes, but overall, I do ok.

R10, writing from prison where he is serving time for tax evasion.

[quote]My father was going to roll over her 401k

Is your father Bruce "Caitlyn" Jenner?

I’ve created a spreadsheet that mimics the1040 tax form. It tells me the consequences of selling my mutual funds during the year, so I can determine exactly how much to sell in a given year (just for example). I actually pay 0% on my long term capital gains some years. I think it’s obscene that the lowest rate is 0% but it is.

I also have a guy who files my taxes, R17, so I should be ok, haha.

It’s is so crazy that thanks to the nature of our hypercapitalism system, we are all supposed to be investors. 401ks are one of the biggest contributors to economic insecurity - gambling put future on stocks for the benefit of Wall Street. Give me socialism - I’m ready.

I started with my financial advisor because my employer provided the service for free (although I was taxed on the imputed value of the services). My husband (the advisor, though straight, was very gay-friendly) and I met with him many times over a period of years. We set goals and came up with an asset allocation strategy that meshed with our generally risk-averse attitudes about investments.

Fast-forward 10 years (try THAT, DOOL!) and we have significantly more funds than we had targeted to fund our retirement. So I'm out the door (and retired) at age 51.

Not sure I could have done that without the advisor's help. My job at the time was such a time-suck that I wouldn't have had the time or energy to devote to those issues.

Even after retirement (and with my employer no longer paying for the advisor), my husband and I have retained him for a flat, and reasonable, annual fee. So a financial advisor may not be for everyone, but it was most helpful to me.

My bro in law, in Connecticut, got an advisor who put his kid’s college funds in a high fee Virginia 529 fund. Totally unsuitable. Virginia? He is not an advisor anymore.

After I researched it, I took the money out and put it in a low fee Connecticut 529 fund. Later, the bro in law fell for another advisor who moved the money into a high fee Connecticut 529 fund.

So, that’s two advisors who were ignorant themselves, or cheats. And my bro in law is an ass.

I don’t help my bro in law anymore.

R22 the Virginia 529 is the highest rated plan, by many reviewers, of all the state’s 529 plans.

Any person, regardless of the state he lives, can invest in any other state 529 plan.

[quote]My father was going to roll over her 401k

[quote]Is your father Bruce "Caitlyn" Jenner?

They said "roll over" not "run over"

I moved part of my 401k into my Roth account. That’s a taxable event. It took me 8 years to move over the money I wanted to move, without paying a high tax rate, phew!

Beware, though. 401k money can not be taken in a civil suit, but Roth money can, depending on your state. So, I may not move over more 401k money. I have to think about it. I got litigious neighbors A few years ago, so I have to be careful. This is all something a financial advisor should normally help you with.

R23, but a Connecticut resident who invests in an out-of-State plan, Virginia, does not get the Connecticut tax deduction for the original contribution to it. That’s one of the benefits of the plan!

Plus, it was high fee, as I wrote.

R25 Could you get umbrella insurance if you're worried about litigious neighbors?

OP, many people are not good with money or they don't have the time to do research, so they enlist financial advisers to [italic]advise[/italic] them on how to handle their money, how to budget better, where to invest their earnings, and to keep track of market shares so that you can invest wisely.

R27, I have it, and it helped, but didn’t cover everything. It cost them more in expenses and I’ll never hear the end of it, even though it was all at their initiative.

I’ll have to look into expanding my insurance, though. Thank you for the idea.

I used a financial adviser to help me set up a diverse set of accounts in very conservative investments. I've been with her for 7 years. I could see that she was trying to sell me other investments but she was just doing her job. She cannot give specific financial advise.

My next step is to find a "wealth management" firm to help me develop a plan to use my investments as income since I'm no longer working. For these services I'll pay, rather than investment fees, for their services. I'll probably use them a few times before I implement a strategy to avoid paying too much in tax as I make withdrawals.

I'm also thinking about working again and would like to run some scenarios to see possible implications. I feel the cost of their services will be well worth the money spent.

The point is, that some have made, is there are plenty of people willing to help with your finances but you have to be savvy in knowing what services they are providing and how they will get paid. That is your job. Their job is to structure your investments based on your needs and the level of risk you're willing to take.

That is my trouble with this. How do I find an advisor? I’d like one that can help me with more than just the basics, which I’ve already got covered. (Rhetorical question.)

No point in having one at this point. No one on the planet will be alive in 20-30 years. So might as well live it up now.

How do you research this stuff?

I would not even know what I am looking for or where to find the information.

We are talking about predicting the future. So who knows anything?

[quote] R33: We are talking about predicting the future. So who knows anything?

I can answer this part of your question. I invest in diversified mutual funds. That means I am basically investing in the US economy. I start out broadly invested, then move some of that money to other investments if I think they will do super well. I have been optimistic about the US, in general. Most pros will tell you to be well diversified, and get in the stock market.

There is another risk aside from stock market risk. It is called “opportunity risk”, meaning, if you don’t invest, you miss the opportunity, and may outlive your money because it doesn’t grow enough.

R33, I’m expecting that a bogglehead will soon answer your first two questions.

R33, I can say that it’s a lifetime of learning. Hopefully, it interests you, as an incentive to learn more. If you work at it, your investments may start paying more than your regular job, and you’ll spend far less time and energy at it, than you do at a regular job.

I'm always getting invitations in the mail to dinners hosted by someone who wants to discuss investing. That's what this is, isn't it? Financial planners drumming up business?

Yes, r37. I think those poor saps must be pretty desperate to drum up business that way.

The stock market and investing seem to be pure chance. The few people I know who invested ended up losing.

That no one has been able to actually recommend any sources of information or way to research says it all. You are taking a chance and can lose just as easily as gain.

You are completely wrong, R39. My records aren’t exacting by my net worth shows an increase of about 140% over 10 years. I say it isn’t exacting because I’ve lived off this money; and I’ve converted a large sum into a Roth IRA and paid income tax on it; and I’ve had some income as well. Overall, I think my return is greater than 140%, but I don’t have records that are easily available.

[quote] R39: That no one has been able to actually recommend any sources of information or way to research says it all. You are taking a chance and can lose just as easily as gain.

I figured someone else would answer this so I let it be, but since you are eager...it depends on your current level of education on the subject, but you might try Suze Orman’s books. Also, google “boggleheads”. The guy who created that forum had a whole philosophy of investing. Both of these sources have been recommended on DataLounge many times before and I don’t recall them being strongly rejected in their entirety. Of course, different people will differ on their approach.

There are tons of sources and methodologies for investing, Here are a few important points:

Diversify

Be humble. You are not smarter or better informed than people who have done this 10 hours a day for 20 years.

Invest for the long term. The people you knew who lost money, what were they buying, some “hot tip”? I don’t do that. I go slow and steady over time.

R41, thank you. I am really ignorant. For most of my working life (about 30 years) I was in a freelance field where long fallow periods ate up all my savings.

There is a lot of anxiety about this. I do not even know how to begin, so my money is sitting in a bank account.

Don’t expect someone to provide the magic answer - including the well-intentioned advice on here from people who have doubled their money in 10 years. The market will crash - what matters is when you get in - and when you get out. In 2 years if you ask this same question, the responses will all be negative. But right now because the market has been up for a few years, people are in love with investing.

It’s gambling. Unless you invest in low risk bonds - and even the you can lose principal if interest rates go up. Earn more than you spend.

[quote] I'm always getting invitations in the mail to dinners hosted by someone who wants to discuss investing. That's what this is, isn't it? Financial planners drumming up business?

Attorneys also drum up business this way. Anyone who's running their own shop or business that is in the business of giving advice does this.

I do not want a magic answer. I just want book and periodical recommendations.

This may sound like a very stupid question but....is it possible to buy stocks without going through a financial advisor? Or rather is it possible to buy stocks safely without going through a financial advisor?

I feel very unconfident. I have a retirement account from a job that I left after 18 months. The fees are greater than the interest, so it is losing every quarter. I knew I would not stay in the job long so the smart thing would have been to opt out. (Yes, I know I should dissolve the account and pay the penalty.)

But now that I have a bit of money saved, I do not want to make another bad decision.

[quote]This may sound like a very stupid question but....is it possible to buy stocks without going through a financial advisor? Or rather is it possible to buy stocks safely without going through a financial advisor?

You can buy stocks safely with any number of online companies. ETrade, TD Ameritrade, Schwab Vanguard are all reputable companies. They usually charge a commission when you buy a stock and then when you sell it. Commission usually ranges between $3-7 for a buy and same for a sell.

The number one point in investing is "Don't put in any money that you can't afford to lose."

That being said, there are several companies that have done extremely well. If you had bought Amazon stock twenty years ago, you'd be rich today. Some companies also pay quarterly dividends, which is profit from your investment.

There are many different ways to analyze companies, some are more safer, some are more risky. I started out reading the books of The Motley Fool. They broke things down and told what to look for in a stock.

To be honest, because I did not accumulate savings till fairly late in life, I do do not feel I can afford to lose any of it.

So maybe it should just stay in the bank. Thank you for the advise. I think I just had a fantasy that I could increase the worth of my savings.

I ordered the Motley Fool Investment Guide.

I do not know that I will do anything because I do not feel I can afford to lose and when I hear about fees, I cringe since I know that the fees can be bigger than any profit.

Recently, all the big brokers like ETrade, TDAmeritrade, and Schwab stopped charging commissions for stock trading.

How do they make money if they do not charge commissions?

Look for a fee based planner. They charge either hourly rates or a percentage usually 1% if they are doing it all for you. But you can hit a few based person to set up a plan. Usually a while plan costs like $2500 but it depends on complexity and the persons hourly rate ($200-400).

The Garrett Planning network planners who are fee only by city or state. They don’t make money off what they sell

r37, they are financial salespeople wanting to sell you expensive annuities. If you want to hire a financial planner, find one who charges by the hour. You will save a hit ton o money that way. Better yet, become a Boglehead :^)

Here is a link to Garrett Network, make sure the planner you select charges by the hour and not by AUM or Assets Under Management.

stash app

Buying individual stocks is a complete gamble.

For every Amazon, there were hundreds of absolute failures.

While I made some money on Apple stock, I lost tons on others.

Just stick your money in an index fund and let it sit there.

An analysis done on Trump’s money concluded, he could have avoided all of his bankruptcies and lawsuits and ended up with billions, if he had just kept his money in a mutual fund at the beginning and let it sit and grow

[quote] R47: To be honest, because I did not accumulate savings till fairly late in life, I do do not feel I can afford to lose any of it.

The important thing, is to just, “jump in”. That’s the hard part. I suggest you open an account with Fidelity today. That is free. Then put some money in, say, $2500. Do you have that? It is a learning experience.

The problem with the guys who lost money, above, is that they weren’t diversified. If you get in a mutual fund, it holds a number of stocks and bonds, maybe 200, so you are diversified within its purview.

I’m not going to do your investment research for you, but I would suggest the FBALX fund. It’s F for Fidelity, and BAL for “Balanced”. That’s just their name for it. Read theIf prospectus first.

There are many different types of funds. Funds can be broken down into mutual funds (they buy/sell whatever the closing price of the day was) or ETFs, Exchange Traded Funds, (they buy/sell what the current price at the moment is).

There are funds that mimic the S&P 500. There are funds that only include companies that pay out dividends. There are funds that only invest in technology or healthcare or foreign companies. There are many, many different types of funds you can invest in.

What no one has really said much about is what investment research is. Suze Ormond and Motley Fool books is what I got. (Already ordered a Motley Fool book.

I am not asking for anyone to do my research, but where do you do it? I used to see those lists of abbreviations and numbers in the papers, but had no idea what they were supposed to mean.

Are there any decent websites or periodicals?

FBALX has 2074 investments. The top ten are Microsoft, Apple, Amazon, google, Facebook, then two kinds of treasury bonds, United health care, Bank of America, capital one finance. So, it seems to be Largely high tech and banks, tempered with Treasuries.

As of 9/30/19’ that’s about 15% of their holdings. There are all sorts of provisos and warnings, of course. Yes, you can lose money. It is scary. Read their prospectus. But I would jump in.

This is a stupid question, R56, you say that there are funds that only pay dividends. If a company does not pay out dividends, doesn't that mean it is losing money? Why would anyone invest in a company that does not pay dividends? Or is there something I am missing.

No R55 is wrong. Do not just “jump in” - at the tail end of the biggest rally in stocks in decades. Most are betting on a major crash - which means he will almost guaranteed lose money in the next 2-3 years in a crash.

Too many people here are feeling great because they made lots of money in the past few years. It ends. I’ve seen it happen over and over. When things are peaking, everyone seems to be bragging how much they made and how the stock market is a great thing - then a crash hits and it seems like everyone is saying how horrible the whole idea of investing is, how it’s a scam, etc.

If you are older and are retiring in the next ten years, you should be invested in safe, low risk investments like bonds. And even those are not 100% safe - as when interest rates go up, the value goes down.

I have that 401K that is losing money because the fees are bigger than the interest earned. I may close that out and use what is left after the penalty to try investing.

I am losing it anyway, so might as well take a chance with it.

I might also get over the resentment over losing my contribution to it.

[quote]This is a stupid question, [R56], you say that there are funds that only pay dividends. If a company does not pay out dividends, doesn't that mean it is losing money? Why would anyone invest in a company that does not pay dividends? Or is there something I am missing.

Not paying dividends doesn't necessarily tell anything about the profitability of the company. A company may be growing and want to use all possible cash on hand for expansion or research and development.

Sometimes companies pay dividends to attract investors. Sometimes they are just old fashioned. Decades ago, when people didn't have as much access to information, they would only invest in companies that paid dividends. I think AT&T is like that. They always pay a dividend because they are old fashioned and have always done it.

[quote]I have that 401K that is losing money because the fees are bigger than the interest earned. I may close that out and use what is left after the penalty to try investing. I am losing it anyway, so might as well take a chance with it. I might also get over the resentment over losing my contribution to it.

r61, if you do change, don't cash out your 401k. You can transfer to another 401k fund in companies like Vanguard or Fidelity. If you cash out before your retirement age, you'll take a huge financial hit. Transfer it, but don't cash out.

[quote] R57: Are there any decent websites or periodicals?

R57, I’d recommend the Fidelity (Fido) web site. That’s where I have my money, so that’s what I know. I understand their competitor, Vanguard is also good, but don’t know from personal experience. Like every company, if you call Fido, they will suggest you try their website, but they can be very informative if you get them to speak with you by phone. You can also visit them in person at one of their offices, if there is one nearby you.

R63, The 401K is so small that I am guessing that anywhere I transferred it the fees would still be more than it makes.

I have a 401K with my current employer which is okay. But that old one is getting smaller every year.

R84, but those sites are by the very companies that are trying to sell you their product---can you really trust them?

I looked at the FBALX prospectus and it seemed designed to obscure information rather than convey it clearly. I suspect most companies are the same.

Is there any journalist or agency that evaluates various investment companies and stocks that are reliable? Every company is going to tell you they are good, so is there a more objective evaluation?

[quote] I understand their competitor, Vanguard is also good, but don’t know from personal experience.

I'm with Vanguard and I'm happy with their service.

Here is a list of their ETFs and Mutual Funds.

Once you have an account, you can also buy individual stocks. I think they charge $7 per trade.

[quote] R61: I have that 401K that is losing money because the fees are bigger than the interest earned. I may close that out and use what is left after the penalty to try investing.

I think you need a financial advisor. I can’t imagine any reason why you are losing money, unless your 401k is a scam, which seems unlikely. You’re just in poor investments, is my guess.

Here’s a thought, either rollover a former employer 401k to a current employer 401k; or, if that isn’t possible, to a Rollover IRA at Fidelity, if you can. If it’s an existing employer 401k, then you you should probably just change investments. You shouldn’t be losing money.

There are so many possibilities for here and now, it’s a lot to address on DataLounge. You really should see an advisor.

Here’s an easy option. first, talk with the 401k phone rep. They might be able to help you.

R65, ok, I see.

You should be able to “rollover” your old 401k to your newer 401k at no fee. It’s also not too hard, as I recall. Call your newer 401k manager on Monday to do this!

There are other alternatives, but this is one option.

[quote]Here’s a thought, either rollover a former employer 401k to a current employer 401k; or, if that isn’t possible, to a Rollover IRA

Don't rollover a 401k to an IRA. Rollover a 401k to a 401k fund at Fidelity or Vanguard. Stay in the same instrument class, otherwise it will be a financial mess.

There’s already been a thread on this OP. Would it have killed you to have done a search first before you posted this? I mean really? What’s wrong with having a little consideration for others and doing a search first? Would it really have been that hard? Would it?

R68, it is really simple. I did not work there long enough to build up enough savings in the account so that the interest would be greater than the quarterly fees.

I had never heard of a "rollover" and did not know I had that option.

Currently I have a 401K account at TIA-CREFF at my current employer. So I guess it makes sense to roll it over there. I wish I had realized that I could do this 12 years ago when I was first hired.

Nothing really. I sat the series 7 & 66 a few years ago and they were ridiculously easy. Their standards are very low. No, I don’t use those licenses anymore.

[quote] R60: No [R55] is wrong. Do not just “jump in”

I see your point, but when is a good time? People who have an interest, just need to get in - but not with ALL their money! Opening an account at Fido is free. You can then set up an auto-deposit from your paycheck of a small amount, or transfer a sum of $2500 to get started. If that’s too much, then use the auto-deposit of smaller sums from your paycheck, but I encourage people to stop fussing and get in. You can fuss for years and miss out the whole time.

To be clear, I’m not saying an inexperienced person should throw all their money in the market. I’m saying to open an account with a relatively small sum that they can lose, and also use it as a learning experience.

When the Fed did “quantitative easing III”, I encouraged my bro in law to get in. He dallied for 2 years and then announced that he was getting in. He missed the whole rally!

When I was in my first apartment, I was asking my sister for advice on buying my first TV. After some time, she told me, that at some point, if you’re going to do it, you have to just do it and hope for the best.

If the investor can’t afford to lose anything, then he shouldn’t be in the market. But he risks outliving his money and missing an opportunity.

[quote] R70: Don't rollover a 401k to an IRA. Rollover a 401k to a 401k fund at Fidelity or Vanguard. Stay in the same instrument class, otherwise it will be a financial mess.

Just a technical correction. If you rollover a 401k, taking it out of an employer and into a company like Fido or Vanguard, the new account is not called a 401k. It is called a “Rollover IRA”.

In addition to what r74 says, both Fidelity and Vanguard have extremely safe funds that pay interest slightly better than a savings account. Look for a money market fund, which is basically what your bank savings account. Vanguard's is "Vanguard Federal Money Market Fund".

I would say in general, that most commission-based financial advisors are useless. And the ones who aren't crap aren't useful unless you have a lot of money.

Where a fee-for-service advisor might help is answering the following questions: What can you afford to risk? Can you afford NOT to risk anything? What is your time horizon and risk tolerance? What asset mix would reflect that over time? Can you help to set that up?

For non-fee-for-service advisors: How do you make your money? Do you have a fiduciary obligation to me? (ie. are you legally obligated to act in my best interest? In writing please!)

[quote]Just a technical correction. If you rollover a 401k, taking it out of an employer and into a company like Fido or Vanguard, the new account is not called a 401k. It is called a “Rollover IRA”.

How is that? I thought 401k was pre-tax and IRA was post-tax?

R78 you’re getting confused and thinking of ROTHS

My adviser knows the ever changing tax laws. He also reviews my plans through my employer every year and tells me what to choose, change, drop etc. I've made a ton of money because of him.

Here’s what I know about IRAs. This is simplified for brevity, and unless it changed recently:

Pretax, traditional IRAs are the old model. They are the Buick of IRAs. Been around for decades, not exciting, etc. You can deposit a certain amount per year from your income, $6000, or $7000 if you are 50 or over. It is not taxed on earning or depositing. It will be taxed on withdrawal in retirement.

Rollover IRAs are a subset of the above, pretax IRA. You “rollover” your pretax monies into it, such as a former 401k. I think other pretax monies may be rolled over as well, not sure. The “rollover” is a non-taxed event.

A ROTH is the Ferrari of IRAs. You can deposit yearly into it $6000, or $7000 if 50 or over, but high earners are prohibited from doing so. This is a taxed event. Yearly deposits [italic] might [/italic] be prohibited if you have an employer 401k, not sure. And a spouse complicates it.

The ROTH has another cool feature. It’s a “backdoor IRA conversion”. You can transfer any amount, subject to NO limit, from a rollover IRA into a ROTH. This is a taxed event. So, you could move money from a 401k into a rollover IRA, then immediately move that money into the ROTH. The last part is taxable.

I moved some 401k money into a Rollover IRA in 2011, and have been moving small (to minimize taxes) pieces of it into my ROTH since. I might finish next year.

If you have enough money, paying taxes is not the worst thing in the world. There is not much point in trying to die with a lot of money left.

I'd take a gander at this before going all-in on index funds:

I used to be absolutely paralyzed about money. I didn’t understand investing. I took some advice from whomever and ended up investing in losing stocks.

It wasn’t until I happened up Suze Orman’s weekly show a decade ago, that I eventually became confident about what do to about saving.

With her advice, I paid off my student loans, bought a house, etc.

Too bad her shows are off the air now. She was exactly what I needed at the time I was starting to make money in my career.

WHAT IS WRONG WITH HIS FACE at r83????

^He has a glass eye.

[italic] “Be greedy when others are fearful; and fearful when others are greedy.” [/italic]

-Warren Buffett

That said, it’s hard to predict. Now I’m suspecting that a Chinese trade deal will stoke the fire before the collapse.

I have $600,000 between my IRA, 401(k), and an investment account. Was mostly in index funds and clearing about 5% per year but wanted to be more aggressive since I'm 52 so I moved to a managed investment account. Since February my IRA is up 11% and my 401(k) is up 24%. I'd say it's worth it.

Walter, have you considered trying to move some 401k money to the Roth? You pay tax now, but the government wll make you take withdrawals at age 70. That’s taxed at regular rates then. If you have a large 401k balance, it can really add up.

This works best if you don’t have a paycheck and have control over your income. I’ve been doing this since I was 51, and I arranged to keep the conversion in a low tax bracket.

Here’s something I do:

I have a 401k and a ROTH. Upon withdrawal, the 401k will be taxed at regular rates, and the ROTH won’t be taxed at all.

I have both aggressive and conservative investments. So, I try to put the aggressive investments in the ROTH, so if they do really well, that gain isn’t subject to tax. I put my conservative investments in the 401k. If they plod along and gain little, it won’t be taxed much. Since I want a mix of investments anyway.

A video on conversion of 401k or pretax IRA monies to a ROTH.

[quote] ince February my IRA is up 11% and my 401(k) is up 24%.

That's because the stock market has been up, not because you got a financial advisor.

This will end in tears.

R83 he doesn’t say what do with your money now though to prepare. Wtf?

Could someone explain R83’s article to me? So what if index funds have a lot of money in them? Does that carry inherent risk?

My RRSP is in a managed mutual fund. I didn’t know anything about finance when I signed up for it a couple of years ago (and still don’t know much). I was thinking of moving to passive investments as my MER is 2%.

Ugh - I listen to advice and lose money in most stock funds. I’m too nervous and fearful of losing money. I’m making 2% which is bad - but I’ve been waiting for a crash for 2 years and still believe a bad one is coming,

Simple: They exist to separate you from as much of your money as possible.

R95, it means that stocks in the companies that are in index funds are overvalued. In addition, other stocks would be overvalued as well, as a rise in index stocks would tend to encourage a rise in other stocks. Ergo, the entire stock market is overvalued and due for a correction or bear market.

R20 - you should go to Venezuela . You'd like it there.

R98 thank you.

I found this article that explains a counter viewpoint/explanation which I found helpful.

[quote] you should go to Venezuela . You'd like it there.

Um, how about Wwitzerland, Germany, France, Sweden, Denmark...

R95, R100, I lost respect for Mr. Money Mustache when he wrote that his child didn’t want store-bought toys. The child was happy building his own toys. OMG! Well, no, he might enjoy building his own toys, but he’d also, still like whatever is popular, and a trip to Disney.

[quote] As a general rule, Mr. Money Mustache avoids reading the daily news and ignores the fluctuations of the stock market. And he advises you to do the same thing.

This is dumb, too. There are big news events that are important.

I have a lot of respect for Burry and suspect he’s done a lot of analysis to come to this conclusion. It’s difficult for the typical investor to assess. It’s not abnormal for the market to have periodic corrections of 20%. Even 30% would not be abnormal, though it sure would hurt a lot. The market indexes fell 60% during the crash. That was abnormal, or at least, unusual.

For those who are completely ignorant and scared--start off with the Dummies books for investing, retirement and mutual funds (and related subjects). That's how I started off and then I went on read Boglehead and other more advanced books. But I appreciate foundation the Dummies books gave me. I would have been flustered if I had started off with more advanced reading.

I'm a die-hard index investor as I like to keep it simple. I'm split between Fidelity and Vanguard. Checked my spreadsheet and I had about 108K in 2009. Now I have over 700K. Happy that to see my investments grew over that time (like everyone else) but kicking myself as why I only had 108K after 12 years out of college. A lot of it was due to nonprofit work and grad school but I could have managed it better. Wished I had wised up in my late 20's rather than at 40 because I would be a lot closer to retirement. I'm sure in 10 years time, I'll kicking myself for many more financial mistakes. For the most part, I am grateful to have what I have--a lot of people have it better than I do but many more are worse off.