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#991 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
That fund has a high 5.75 load fee, an "ok" expense ratio of .61% and 10 year gain of 4.15%. That pretty terrible gains given the fact you're paying up front just to put money there. You could simply park money in a target date fund with Vanguard (this fund changes your allocation as you age), pay 0 for a load fee, with an expense ratio of .16% and a 10 year gain of 5.71%. All of this is better than the fund you mentioned and simply requires hands off investing until you retire. We have so much research at our fingers today that even an average investor, like myself, doesn't require the need of an adviser at this point in life. If later, when my assets have grown and I'm more worried about retirement (less than 5 years out), I may pay for guidance. At a younger age, paying for "guidance" is simply stunting your portfolio growth by tens of thousands of dollar....and this is not an exaggeration as far as dollar amount goes. |
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Posts: 45,974
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#992 |
Woman should only make babies
Join Date: Nov 2003
Location: Apartment "G UNIT!"
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sounds good thanks for explaining
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Posts: 54,408
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#993 |
Woman should only make babies
Join Date: Nov 2003
Location: Apartment "G UNIT!"
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The good thing is i got 8 years of saving in vanguard on my first job some money in wells fargo for my second job and some money with merril lynch from my current. I also have a small pention from my first job. So I don't think I am too ****ed.
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Posts: 54,408
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#994 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
There's no reason you can't consolidate all your 401k's from previous employers to an IRA of your choosing. Easier to manage your money for many if they're together and once rolled over you can dictate how the money is invested, instead of what your employer offered (which usually has limited options). I'd be doing that if you haven't already. |
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Posts: 45,974
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#995 |
Woman should only make babies
Join Date: Nov 2003
Location: Apartment "G UNIT!"
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sounds good
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Posts: 54,408
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#996 |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Hopefully others chime in. I don't want to look like a know-it-all and I myself am still a young investor (31). I do like talking about finances though and reading about it. I have done a lot of financial planning reading in the past few years. Learning about wealth building, retirement planning and investing. There's lots of decent forums where you can find information and for the most part, I think does a pretty good job of educating without someone trying to sell you something like seeing an adviser, plus the fees on top of that.
My parents were good role models in this. Able to retire fully at 57 years old in 2010 having never made a combined household income over $100k. They simply made consistent investments from their mid 20's on. Never sacrificing a years worth of savings for a "major" life event. I hear people use this reasoning all the time. Not saving for retirement to buy a new house, a new car. Taking years off investing when you're young loses you so much money in compounding interest by the time you hit retirement. I don't solicit any financial advice to people in real life, like friends, unless they directly ask me a question about it. We have some friends who are terrible with money. Close to $100k of debt (that's also their yearly income), outside of a mortgage they barely afford. I just smile and nod when they talk about all their new purchases. A recent example was our other close friends who asked my opinion on not contributing to retirement for 2 years to save up for redoing their kitchen and floors. Mind you their house is nice, but they didn't like the tile color or the kitchen setup. They are very open with us about finances and told me he contributes 10% of his salary to his 401k. He makes $120k, so he was contributing $12k per year. His wife doesn't work. They contribute to no other investment accounts outside of his 401k. I showed them that if they did not contribute that $24k to retirement over 2 years, that even with a modest 5% gain over 30 years, they'd have $100k less in retirement in 30 years just for missing those 2 years! They were shocked and decided cutting expenses was a better way to save. If more people understood compounding interest, with decades to continue investing, more young people wouldn't skimp on their contributions. |
Posts: 45,974
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#997 | |
Politically Incorrect
Join Date: Feb 2009
Location: Scottsdale, AZ
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Quote:
![]() One account and probably the best performing/lowest fee would be the best. |
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Posts: 51,511
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#998 | |
Woman should only make babies
Join Date: Nov 2003
Location: Apartment "G UNIT!"
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Quote:
Its all good I just need to get a fire lit under my ass to get those accounts together. |
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Posts: 54,408
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#999 |
Supporter
Join Date: Apr 2007
Location: Scott City KS
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Lew is right.
But my perspective is something is better than nothing. It's really easy to get bogged down in details and research. Sometimes paying someone to set it all up is cheap money if you wouldn't otherwise do it. My grandpa was a farmer. Grew up in the depression. So he did everything himself. Built his house. All his sheds. Airplanes. Rebuilt his tractors. If he couldn't do it himself it largely didn't happen. But he had 2 mutual funds. One he put $3,000 sometime in the 60s and $3,000 sometime in the 70s. Both had well over 150,000 in them when he died in 08 (right about the time the market puked all over everything). He didn't pay any attention to loads, fees, commission, whatever. He just made a little extra money and had his ground paid off and just stuck it somewhere. I'm sure it wasn't the most efficient and one vastly out yielded the other but the return over time on either one was huge. Just do something. |
Posts: 57,469
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#1000 | |
Veteran
Join Date: Oct 2008
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Quote:
You have the choice to roll these into your current 401k, but this is not advisable because you are limited to whatever funds that company offers, and they usually have higher expense ratios than if you have it elsewhere. A best case scenario would be that they do have a terrific choice of funds that match your objectives, but they are still more expensive annually. Additionally, when you retire and a required to take Required minimum distributions, having to withdraw from 3 separate places complicates the calculation. If you only have 1 merged account, they will tell you exactly what you need to withdraw, so you don't run the risk of having an insufficient RMD penalty. |
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Posts: 1,606
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#1001 | |
Veteran
Join Date: Oct 2008
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Quote:
Most people think you are paying someone to go out and get you above average returns. That's what a hedge fund is. Great example of this is a hypothetical where the market as a whole has a 10-15% dip, an advisor who has you in a good asset allocation minimizes your losses during this period to something like 5- 7%. Because you are in a moderately defensive allocation, during good years you may not return exactly what the market returns. It's a safe bet for the less risky of us. When you are nearing retirement and have more complex requirements, paying an advisor to minimize your risk is usually worthwhile. |
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Posts: 1,606
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#1002 |
Veteran
Join Date: Dec 2005
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Financial gurus of the CP, I come to you with a question. I have a 401K with the company I have been with for the last 12+ years. What is the differences between 401K and IRA? They also offer a IRA and I can start contributing to that as well as with the 401k, should I be doing that?
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Posts: 2,816
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#1003 | |
Supporter
Join Date: Apr 2007
Location: Scott City KS
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Quote:
Now, you can essentially do the same thing with a IRA, but it is done after the fact on your tax return and it is limited at $5,000. 401k limits are $14,000. I'd keep it in the 401k unless you are hitting your limits. |
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Posts: 57,469
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#1004 | |
He's Mahomie!
Join Date: Aug 2001
Location: Jax, FL
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Quote:
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Posts: 17,387
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#1005 |
He's Mahomie!
Join Date: Aug 2001
Location: Jax, FL
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I will say I'm like lewdog in being obsessed with the financial investments. I try to teach my kids this stuff all the time. They already have their own stock accounts. My son just graduated from high school and is unsure of college, even with good scholarship offers for golf. Instead of being $100k in debt, we're taking his college savings and placing it in the stock market. Can you imagine the compound interest on $25k starting at age 18?
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Posts: 17,387
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