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Post by ironhamster on Nov 14, 2024 6:13:17 GMT -5
LOL - i watched my W's eyes glaze over as I explained how i was trying for us not to retire poor by buying Gilts/Corp bonds and shares... ha ha ha My ex didn't care where the money came from as long as she had it to spend. As I approached the age of 50, one day she demanded to know when I was going to retire. I told her that with the checking account always drained by the time my next paycheck arrived I would never be able to retire. That never registered in her head. |
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Post by dallasgia on Nov 16, 2024 12:56:26 GMT -5
He had me working three jobs because “no money in the budget for groceries” whilst our income exceeded 1./2 mil per year.
Even with his rapid embezzlement last few years, i walked away 50/50 of what was left and I'm told I'm okay - its all paper funny money to me and here i go continuing to work my 3 jobs unable to make my ends meet cause that was the state of my life for so long. Im mot able to change my frame of mind.
I check my little Robinhood multiple times a day. i never log in to the other new to me accts.
I'm sticking with long standing advice - change nothing for a solid year.
Maybe next April i can figure out how to quit one of the jobs.
i feel like there are sharks circling around me - lots of offers to "manage" my portfolio. For fees of course. 2% sounds so innocent until you do the math. and, from my years long attitude of scarcity i just can not go there. so, here i sit juggling bills of a giant family home i didn't want but endeavor to keep
till my "little" boys graduate college - providing the stability of the only house they have ever known.
So so much for me to learn.
DallasGia
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Post by ironhamster on Nov 18, 2024 2:04:08 GMT -5
2% DOES sound like a lot. Simple math, here. Most managed mutual funds don't beat the S&P500 benchmark for annual returns. Check out the expense ratio on the IVV, Vanguard S&P500 exchange traded fund. It's 0.03%.
Now, I will grant, money managers might do a lot more. They may pick some stocks, they may time the markets, and they may make mistakes. They may play it safe, putting the money in mutual funds that will also siphon off one or two percent right off the top. I have worked with two money managers before, and cannot in good conscience recommend either. In their defense, they do provide peace of mind for those that would rather play golf than look after their own money. They may also be good for those that are in good enough financial shape to need to deal with tax avoidance and estate planning.
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Post by mirrororchid on Nov 18, 2024 6:00:32 GMT -5
2% DOES sound like a lot. Simple math, here. Most managed mutual funds don't beat the S&P500 benchmark for annual returns. Check out the expense ratio on the IVV, Vanguard S&P500 exchange traded fund. It's 0.03%. Now, I will grant, money managers might do a lot more. They may pick some stocks, they may time the markets, and they may make mistakes. They may play it safe, putting the money in mutual funds that will also siphon off one or two percent right off the top. I have worked with two money managers before, and cannot in good conscience recommend either. In their defense, they do provide peace of mind for those that would rather play golf than look after their own money. They may also be good for those that are in good enough financial shape to need to deal with tax avoidance and estate planning. This. 75% of active money managers fail to beat the S&P. Of the 25%, only some can do it consistently. Fewer still beat it by enough to pay that 2% markup. Index funds are the way to go. They keep a collection of stocks from a given collection like IronHamster's S&P 500. But you can get the Russell indices, NASDAQ, the Dow. Point being it's many stocks and small pieces of them all, adjusted each day so that each is proportionately the same as the index it's matched to. When you're ten years from retirement, you'd want some money switched to cash investments. (CDs and bonds) It's my understanding bond FUNDS can lose value if interest rates rise and may undermine your retirement, so I'd steer towards CDs, unless rates are so low it's pointless to use them like during the Great Recession and the COVID period. When CD rates are garbage, dividend stocks may be worth a look, but watch their debt amounts. Any fool can borrow money and hand it to you and make you think they've earned it, wen they haven't. You can also check the "Payout Ratio". Lower is better. It is the percentage of their earnings they pay the stock holders. If it's over 100%, they are eating into cash or going into debt. No biggie for a quarter or two, but if it keeps up, they'll need to pay less and lowering your dividend is a warning signal that scares investors away and causes a drop in the stock price. Advice I've heard and like is to keep some (30%?) of your portfolio in stocks even if you're fully retired. If you won't need that 30% for a while (and in theory, that should be the case... the 70% serving your near term needs), you'll need your money to grow a little so you don't outlive it. If yields for CDs/bonds are painfully low, as mentioned before, you may chose to switch more of your funds to stocks. Better to make a switch early, while interest rates are dropping, not when they go flat or start to climb. You want to be ahead of other people's switch. (This can be some guess work. It is a form of "market timing" which is no easy thing. Anyone who gets it right was probably lucky. Al you need to do is be kinda sorta close. If you're too early, that's fine. Too late is worse) |
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Post by ironhamster on Nov 18, 2024 8:06:23 GMT -5
Timing is tricky, and generally a fools game. One tip on timing. Listen to the Fed. If interest rates are going up, move to cash. A tightening money supply from rising interest rates hurts pretty much everything. The 60/40 stock/bond portfolio won't win in a rising interest rate environment.
Interest rates can move down for more than one reason with more than one effect. Generally lower interest rates mean lower borrowing costs and a rise in stock and bond prices, but often the Fed is late in reducing interest rates and it doesn't create the immediate benefit we would hope for.
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Post by isthisit on Nov 18, 2024 15:32:49 GMT -5
For fees of course. 2% sounds so innocent until you do the math. DallasGia I have a managed fund because I can’t be bothered with such matters. Your post prompted me to look at the rate on my deal. I am afraid mine is 0.2%, so these folks seem to be a rip off. The costs to me in GBP seem reasonable and worth the expertise. |
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Post by ironhamster on Nov 18, 2024 16:27:48 GMT -5
Sometimes, the 2% exchange rate is justifiable. Sometimes you never know. Years ago I was in the Fairholme Fund, run by Bruce Berkowitz. Bruce was killing it. He was a master at finding undervalued companies and turn-around stories. He was the top mutual fund manager for three years in a row. Then, he wasn't. I will save the boring details, but the fund crashed. Past performance is no guarantee of future results.
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Post by isthisit on Nov 18, 2024 16:31:08 GMT -5
Past performance is no guarantee of future results. Sounds like my marriage. |
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Post by mirrororchid on Nov 19, 2024 4:59:24 GMT -5
For fees of course. 2% sounds so innocent until you do the math. DallasGia I have a managed fund because I can’t be bothered with such matters. Your post prompted me to look at the rate on my deal. I am afraid mine is 0.2%, so these folks seem to be a rip off. The costs to me in GBP seem reasonable and worth the expertise. "Managed" fund? 0.2%. That's surprisingly low. That is in line with index funds which are dictated by formulae. Can you share which fund it is? |
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