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Letting someone else manage your money
Posted on 1/4/17 at 8:52 am
Posted on 1/4/17 at 8:52 am
No one will ever watch your money like you do, no one will ever care about growing your money like you do. Having anyone else manage your money is most likely a mistake and not the optimal choice.
With that said:
For whatever reason, you cannot manage your own wealth. This can be due to any combination of handicap, ineptitude, health, disinterest, any excuse or reasoning you decide upon. Think Elderly with no family to help you or young with one of the aforementioned afflictions.
What is the best avenue to receiving financial counsel? Assume you are starting small with roughly $10,000 in savings.
What are the board's best ideas for what/how to invest this $10,000. Assume average age, average income and average aversion to risk. (33, healthy, $65k annual income pre-tax.)
With that said:
For whatever reason, you cannot manage your own wealth. This can be due to any combination of handicap, ineptitude, health, disinterest, any excuse or reasoning you decide upon. Think Elderly with no family to help you or young with one of the aforementioned afflictions.
What is the best avenue to receiving financial counsel? Assume you are starting small with roughly $10,000 in savings.
What are the board's best ideas for what/how to invest this $10,000. Assume average age, average income and average aversion to risk. (33, healthy, $65k annual income pre-tax.)
6
Posted on 1/4/17 at 8:57 am to Wind
quote:
Assume you are starting small with roughly $10,000 in savings.
Absolutely no need for financial assistance with this amount.You can read up yourself and do it yourself.
What are you wanting to do with the money? Save for retirement? General savings? Kids?
Posted on 1/4/17 at 9:01 am to HailToTheChiz
quote:
You can read up yourself and do it yourself.
Again, this isn't an option for this person. Assume some combination of unwillingness and ineptitude.
General savings I suppose?
Ideal scenario would be to turn it into a stream of income.
Via interest or by increasing the savings to the point of being able to make a down-payment on a home to be used for generating rent.
Posted on 1/4/17 at 9:07 am to Wind
quote:
What is the best avenue to receiving financial counsel? Assume you are starting small with roughly $10,000 in savings.
You are not going to get anyone worth a shite to manage $10,000. The adviser is losing money on that and the $10,000 client comes with million dollar headaches.
Posted on 1/4/17 at 9:09 am to Janky
quote:
You are not going to get anyone worth a shite to manage $10,000. The adviser is losing money on that and the $10,000 client comes with million dollar headaches.
This was my chief concern, no one willing to take this on because not enough reward.
What do elderly people with no one they can trust and lacking the aptitude or health do to manage their finances in their old age?
At what dollar figure does the "give a shite" meter start to move?
This post was edited on 1/4/17 at 9:11 am
Posted on 1/4/17 at 9:12 am to HailToTheChiz
Yes, no need for an advisor at that amount. Buy an index, reinvest and never sell.
It is true that no one will watch your money like you do and in my opinion that is one of the reasons to use an advisor. You will stress over a every tick in the market, try and guess timing and you will be wrong eventually. Also, unless you are one of the few you will never be able to remove the emotional aspects of fear and greed from investing. This will make you a normal (aka sub-par) investor.
It is true that no one will watch your money like you do and in my opinion that is one of the reasons to use an advisor. You will stress over a every tick in the market, try and guess timing and you will be wrong eventually. Also, unless you are one of the few you will never be able to remove the emotional aspects of fear and greed from investing. This will make you a normal (aka sub-par) investor.
Posted on 1/4/17 at 9:12 am to Wind
quote:
What do elderly people with no one they can trust and lacking the aptitude or health do to manage their finances in their old age?
Stuff money in a mattress.
Posted on 1/4/17 at 9:15 am to Maderan
quote:
Buy an index, reinvest and never sell.
Posted on 1/4/17 at 9:18 am to Wind
quote:
What do elderly people with no one they can trust and lacking the aptitude or health do to manage their finances in their old age?
Most end up at the bank buying CDs or get screwed into fixed annuities.
quote:
At what dollar figure does the "give a shite" meter start to move?
This depends. Most with a good book will start from $250,000-$500,000. Big books can be from $1,000,000 and up.
Posted on 1/4/17 at 9:19 am to yellowhammer2098
That is the type of account that a bank advisor would take and drop in annuity so be fearful of any advisors in that channel.
Depending on the income needs and the need for capital preservation you could look at (in order of increasing risk to capital) CDs, Bond Ladder, Dividend Stocks.
Depending on the income needs and the need for capital preservation you could look at (in order of increasing risk to capital) CDs, Bond Ladder, Dividend Stocks.
Posted on 1/4/17 at 9:24 am to HailToTheChiz
quote:
Buy an index, reinvest and never sell.
What/which type of Index?
Loads of stuff online about how to get started investing in one of these but, what are some of the pitfalls, hurdles and things to watch out for with this type of investment?
Posted on 1/4/17 at 9:32 am to Wind
quote:
what are some of the pitfalls, hurdles and things to watch out for with this type of investment?
The index could drop 37% like it did in 2008.
Posted on 1/4/17 at 9:34 am to Wind
You're kind of all over the place with this. If this is already present in managing only 10k
quote:then this
Assume some combination of unwillingness and ineptitude.
quote:is never going to happen
make a down-payment on a home to be used for generating rent.
Posted on 1/4/17 at 9:35 am to Janky
quote:
The index could drop 37% like it did in 2008.
That's where the "never sell" bit of advice comes in
Posted on 1/4/17 at 9:38 am to Joshjrn
quote:
That's where the "never sell" bit of advice comes in
quote:
Think Elderly
Not always an option.
Posted on 1/4/17 at 11:22 am to Janky
quote:
The index could drop 37% like it did in 2008.
this is the risk / reward associated with investing. if you can't handle the risks. I would buy TIPS or AAA corp bonds.
Posted on 1/4/17 at 11:30 am to Wind
if talking true "elderly" or retired, you should have just about zero exposure to market volatility.
Posted on 1/4/17 at 11:37 am to notsince98
quote:
if talking true "elderly" or retired, you should have just about zero exposure to market volatility.
For 10k I am ok with this statement. As a blanket statement this is completely incorrect.
Posted on 1/4/17 at 11:51 am to notsince98
For a retired individual at 62-65, they are more than likely going to experience a 25-30 year retirement.
To say a retired individual needs 0 market exposure is like saying they've climbed the mountain and the journey is over, yet they haven't climbed down the mountain (which in fact, statistically, more people die on the way down). Retirement is like the same, and there are a lot more risk than just market risk.
To say a retired individual needs 0 market exposure is like saying they've climbed the mountain and the journey is over, yet they haven't climbed down the mountain (which in fact, statistically, more people die on the way down). Retirement is like the same, and there are a lot more risk than just market risk.
Posted on 1/4/17 at 12:04 pm to Shepherd88
I guess the next step is to define elderly.
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