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re: Talked with my financial consultant today
Posted on 6/16/21 at 8:03 am to Auburn80
Posted on 6/16/21 at 8:03 am to Auburn80
I agree with the advice to get out of bonds. They'll lose value as rates go up eventually. Maybe go 80/10/10 on the 3 funds you proposed if you want international exposure. I probably wouldnt go more than 25% international. Keep in mind in modern economy US listed companies offer plenty of international exposure themselves.
This post was edited on 6/16/21 at 8:22 am
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Posted on 6/16/21 at 8:15 am to Auburn80
quote:
This many posts and you still haven’t given us your age
First page, 11th post after the OP. LINK
quote:
If you’re over 40, you’re in trouble with only 30K.
This is a 403B for the county school system retirement savings plan with Transamerica. I have a 401K (that I still contribute $400/month to) from previous employment that I cannot merge with this account.
Just wanted the MT's opinion on what I was looking at as far as the allocation distribution between the funds.
Posted on 6/16/21 at 8:18 am to ZaphodBeeblebrox
My personal opinion, you shouldn't hold any bonds. I'd expect you intend to stay in the market at least 20 more years? No reason to hold bonds.
I'd agree with putting all of your cash into a total stock market index.
I'd agree with putting all of your cash into a total stock market index.
Posted on 6/16/21 at 8:23 am to ZaphodBeeblebrox
quote:
I have a 401K (that I still contribute $400/month to) from previous employment that I cannot merge with this account.
You can do this? First I've ever heard of that if so. Thanks for teaching me something new today MT.
Posted on 6/16/21 at 8:28 am to ZaphodBeeblebrox
Did you roll the old 401k to an IRA? Or still part time employed w old employer? If not, I don't know how you are still actively contributing to 401k. According to quick Google search that doesn't appear to be an option.
This post was edited on 6/16/21 at 8:29 am
Posted on 6/16/21 at 9:17 am to ZaphodBeeblebrox
My 2 cents …
I consider 45 to be young …. So yes, I’d put it in an equity fund like VT and leave it alone.
Wealth accumulation takes patience and discipline. Also, despite what others say, you have just as good of a chance of underperforming the market as beating it in the long haul. Stick to diversified funds … and at 45 yo, I’d say mostly equity.
Best of luck!
I consider 45 to be young …. So yes, I’d put it in an equity fund like VT and leave it alone.
Wealth accumulation takes patience and discipline. Also, despite what others say, you have just as good of a chance of underperforming the market as beating it in the long haul. Stick to diversified funds … and at 45 yo, I’d say mostly equity.
Best of luck!
Posted on 6/16/21 at 9:38 am to TorchtheFlyingTiger
quote:
Did you roll the old 401k to an IRA?
Yes. Sorry for misrepresenting that. The 401K was established when I started working in 1998. I left the private sector five years ago to teach because it is less stress on my body (but more stress on my heart and head).
Posted on 6/16/21 at 10:49 am to frogtown
quote:
This financial consultant is taking your money. I see he put you in American Funds. A lot of the American Funds are "front loaded" to the tune of 5.75%. I would check on this if I where you.
I bet most of these funds he put you in are "loaded".
None of those are front loaded.
Posted on 6/17/21 at 9:01 am to RoyalWe
quote:
Sure. 100% VTSAX.
Wonderful idea.
Other reasonable options:
Have something near 20% in international
Consider 5-10% in that small/med value fund if you truly believe that it is going to pay a long-term premium over large cap. You can probably skip this step
Consider 5-10% real estate in the REIT fund, but I don’t personally own a REIT and don’t plan on it anytime soon.
So, yeah. 100% VTSAX is a pretty solid option.
Posted on 6/19/21 at 1:14 pm to cgrand
Why is my balance going down?
Started out @ $30,798.00 on 6/15
Then I made future allocation changes & saw this activity.
6/16 $30,717.91
6/17 $30,526.52
6/18 $30,454.96
6/19 $30,075.51
Any idea?
Started out @ $30,798.00 on 6/15
Then I made future allocation changes & saw this activity.
6/16 $30,717.91
6/17 $30,526.52
6/18 $30,454.96
6/19 $30,075.51
Any idea?
Posted on 6/19/21 at 1:37 pm to ZaphodBeeblebrox
The s&p is down about 2% this past week which was roughly $600 based on your starting balance so seems about right. Don’t worry about checking that balance so often it does you no good.
This post was edited on 6/19/21 at 1:39 pm
Posted on 6/21/21 at 10:29 am to ZaphodBeeblebrox
Four funds is all you need. See Paul Merriman link below. He has a more complex version but the 4 model works almost as well. I wouldn’t be in a significant amount of bonds unless you are over 60. You get no return and they are correlated with stocks generally anyway.
LINK
LINK
This post was edited on 6/21/21 at 10:30 am
Posted on 6/21/21 at 1:56 pm to ZaphodBeeblebrox
I hate mutual funds. They all have fees and from those fees are the commissions for the "financial consultant". A better name for him is "mutual fund salesperson".
If you want a consultant get a fee based guy so at least you know the cost and it is not hidden in fund yields. If in your plan you buy individual stocks buy them.
These great big funds like the American Funds are limited in the number of stocks they buy simply because they need stocks with enough volume for them to take the huge positions they need to invest.
If you want a consultant get a fee based guy so at least you know the cost and it is not hidden in fund yields. If in your plan you buy individual stocks buy them.
These great big funds like the American Funds are limited in the number of stocks they buy simply because they need stocks with enough volume for them to take the huge positions they need to invest.
Posted on 6/21/21 at 5:09 pm to I B Freeman
quote:It is all about return after all costs of investment (ROI). The key is knowing what ROI should be -- alpha vs beta.
If you want a consultant get a fee based guy so at least you know the cost
I'd happily pay 2/20 if ROI is good. Likewise, I'll pay marketmaker premiums for option spreads or "structured products" if that makes sense. Consultants can bring fresh ideas to the table.
MsNC and I handle substantial assets own our own. So our risk/returns are benchmarks. If consultants don't meet benchmark over time, we dismiss them.
We fired a litany of underperformers before landing decent consultant teams. Some were lower cost, but lower ROI. Others were generating decent returns, but underperformed d/t fees.
Our present folks do well for themselves. We get what we pay for.
Posted on 6/21/21 at 5:22 pm to NC_Tigah
Consultants whose solutions are more mutual funds are mutual fund sales people.
If you own "substantial assets" there is no need to ever own a fund. You can own every individual stock in it and pay no fees.
If you want to get in a hedge fund that does wilder things then the fees are generally fairer to the investor---most are based on a percent of the gain and very little on just the value of the asset.
I have never hired a financial consultant. I watch my employees in the simple IRAs we provide (100% match of 3%) use brokers and see them loaded up on funds and I simply shake my head. There is no way a bunch of funds beats the market over time---particularily these large funds with literally scores of positions---given their fees.
If you own "substantial assets" there is no need to ever own a fund. You can own every individual stock in it and pay no fees.
If you want to get in a hedge fund that does wilder things then the fees are generally fairer to the investor---most are based on a percent of the gain and very little on just the value of the asset.
I have never hired a financial consultant. I watch my employees in the simple IRAs we provide (100% match of 3%) use brokers and see them loaded up on funds and I simply shake my head. There is no way a bunch of funds beats the market over time---particularily these large funds with literally scores of positions---given their fees.
Posted on 6/21/21 at 5:35 pm to I B Freeman
quote:We don't hold many. But e.g., we've owned TRBCX and JFRDX for a few years. They've done well.
If you own "substantial assets" there is no need to ever own a fund.
Posted on 6/21/21 at 5:47 pm to I B Freeman
quote:Good for you. Seriously.
I have never hired a financial consultant.
MsNC is a dual Finance/Accountant type who handled our d2d management full-time for years while I worked 60-80hrs/wk on 'other things'. So we were set +/- consultants. It was a high mark.
Sans that, there is no way I'd not have had financial specialists working all my accounts when I was otherwise occupied.
This post was edited on 6/21/21 at 5:48 pm
Posted on 6/21/21 at 6:14 pm to ZaphodBeeblebrox
Beware of anyone giving advice who does not know/consider your age/time to retirement, financial goals, risk appetite, future expenses, tax rate, and many more...
And beware of any financial consultant whose reward structure is not aligned with yours. Further, IMO, one who takes flat fee for basic portfolio re-balancing that you can learn yourself and give yourself 1% return, for example, right back.
Lastly, beware of yourself. If you are trying to maximize return while living a bloated lifestyle (ie, there is 1-3% return in your direct control with 100% certainty of return by lowering your expenses), may be wise to start with your own expenses.
Otherwise, when in doubt, VTSAX and don't look back.
And beware of any financial consultant whose reward structure is not aligned with yours. Further, IMO, one who takes flat fee for basic portfolio re-balancing that you can learn yourself and give yourself 1% return, for example, right back.
Lastly, beware of yourself. If you are trying to maximize return while living a bloated lifestyle (ie, there is 1-3% return in your direct control with 100% certainty of return by lowering your expenses), may be wise to start with your own expenses.
Otherwise, when in doubt, VTSAX and don't look back.
Posted on 6/21/21 at 6:31 pm to slackster
If you are a long ways away from retirement (10+ yrs), this is what I would do:
3 Vanguard index funds (investor shares):
VTSMX (Total Stock Mkt) - 70%
VBMFX (Total Bond Mkt) - 10%
VGTSX (Total Int'l Mkt) - 20%
Re-allocate annually to your risk/age profile as recommended by boglehead.org.
Some may challenge having any in bond allocation (ie, interest rates are artificially low and when they inevitably come up (ie, Fed vs. inflation), bond prices will go down). Keep in mind the inherent diversification that is in these 3 funds, and reallocation over time is key.
I should have stated this in above post but got lazy.
Good luck!
3 Vanguard index funds (investor shares):
VTSMX (Total Stock Mkt) - 70%
VBMFX (Total Bond Mkt) - 10%
VGTSX (Total Int'l Mkt) - 20%
Re-allocate annually to your risk/age profile as recommended by boglehead.org.
Some may challenge having any in bond allocation (ie, interest rates are artificially low and when they inevitably come up (ie, Fed vs. inflation), bond prices will go down). Keep in mind the inherent diversification that is in these 3 funds, and reallocation over time is key.
I should have stated this in above post but got lazy.
Good luck!
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