New Friends are the Anti-Bogleheads, what to do?

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SteelPenny
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New Friends are the Anti-Bogleheads, what to do?

Post by SteelPenny »

My spouse and I recently went on a double date with a new couple we met. They are really a nice and interesting couple. However, some of the financial decisions they are making were really unfortunate. The topic of finances never came up at all (at least I never brought it up), but being a Boglehead, I couldn't help but start doing the math in my head upon hearing things like:

1. Bought a brand new $30k-$35k car, traded it in months later for a $60k-$65k car because the first one wasn't "fun".
2. Bought a new boat for rare weekend use.
3. Starting multiple expensive hobbies before abandoning them.
4. Eat regularly at pricey restaurants.
5. Stated "We aren't very good with money," but plan to meet with a financial adviser who travels from a major city to meet new clients.

This couple likely has an income of approx $400k combined, but they likely have debt as well (not sure, but one brand new physician, one new attorney). I would really like to help this couple, but on the one hand we are new friends and so don't have a close relationship at this point. I made it a point not to say anything judgmental, but maybe they could read it on my face or just my lack of commenting because that was when they added the part about not being very good with money during one of the spending stories. Normally, I would not broach the subject, but given that they clearly stated, "we're not very good with money" and are planning to see a financial adviser to manage their investments, I wonder if they aren't really looking for help but not sure where to find it.

Have any of you ever tried to help in a situation like this?
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rob
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by rob »

Why do you want to save the world?...... One of my closest friends day trades..... while we rarely talk about it, we both know we are just using different investing perspectives from the odd conversation. We have so much other stuff in common. Just enjoy the company and skip that topic......
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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Raybo
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Raybo »

I agree that, unless they ask, keep away from talking finances.

On the other hand, I'd enjoy the toys these people have!
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by DTSC »

Keep your mouth shut, except when drinking the expensive wine that they will invariably buy!
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JonnyDVM
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by JonnyDVM »

Don't say a word unless they specifically ask for your opinion. They probably won't listen anyway. Spending money is fun. Saving is not. They sound like an entertaining couple to be around though. :beer
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White Coat Investor
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by White Coat Investor »

I agree with the above about focusing on what you have in common. However, you might mention that since they're considering hiring an advisor and one of them is a doctor that they might check out a webpage like......

this one:

http://whitecoatinvestor.com/investing/ ... dvisers-2/

Might help, might not. But it preserves your reputation and you let me be the bad guy.
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Raymond
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Raymond »

Enjoy their company, they sound like nice people.

Do not bring up the subject of money yourselves.

If they bring it up, then you might refer them to this site, perhaps mention what you and your spouse do, but make no recommendations otherwise.

My wife and I don't even discuss this with close relatives and friends, much less new acquaintances.

Of course, your new friends may be thinking, "Poor SteelPenny and spouse, such pleasant people, but they just don't know how to enjoy life." :twisted:
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island
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by island »

"Help them"?
How they spend their money is there business; stay out of it.
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steadyeddy
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by steadyeddy »

They probably want your investment help about as much as you want theirs.
kenner
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by kenner »

I agree with the opinions that it is best for you to say nothing whatsoever to your new friends about finances unless they ask. Perhaps at some point down the road (maybe even years from now) you could mention that they might want to check out the wisdom that is so readily shared on the Boglehead's website.

From a personal standpoint, I understand what new doctors and attorneys go through. There is certainly celebration upon achieving such status. In my lifetime, I've owned the new Porsches, BMWs and Lexuses. These things are unnecessary luxuries, but sometimes life is fore-shortened. It should be enjoyed while possible. Although my health seems to be failing, I do not regret for one second the extravagant vacations, cars, etc. that I have been privileged to enjoy.

Your friends deserve to live their lives the way they want to.

Eventually, economic reality will probably set in with your friends. It is never too late to create a viable financial plan. One of the great things about being a doctor or lawyer is that they can work for a long time if necessary.
Last edited by kenner on Sun Mar 30, 2014 12:25 am, edited 1 time in total.
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cheese_breath
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by cheese_breath »

If you want this new couple to become your friends stay out of their financial business unless they ask. Even then it can be touchy.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by steve_14 »

SteelPenny wrote:This couple likely has an income of approx $400k combined
Then I'd suggest letting them do whatever the heck they please.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by JonnyDVM »

steve_14 wrote:
SteelPenny wrote:This couple likely has an income of approx $400k combined
Then I'd suggest letting them do whatever the heck they please.
Boats and 60k cars chew through 400k of income pretty quick especially when you consider the tax burden. Additionally, unless they came from wealthy families, they almost certainly have significant educational debt.
I’d trade it all for a little more | -C Montgomery Burns
mnvalue
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by mnvalue »

Everyone's advice here is always, "Just stay out of it." I'll offer a contrarian point-of-view: If someone said to you, "I never change the oil in my car. My brakes don't work well, so I'm going to take my car to this mechanic I know, who says I need to have him overhaul the engine. I'm not very good with cars." Do you think it's ethical to think, "Well, this idiot can make his own choices.", and just say, "That's nice."? I don't. I think you should say, "I don't think that's going to help. You need to find a proper fix to the brake problem, as that could be a safety hazard. When I have a car issue, here are some resources I use: call the dealership, call one of these two specific mechanics I trust, read book X, and/or ask the guys on Car Talk."
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nedsaid
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by nedsaid »

Just remember the old greeting card wisdom, "A fool and his money are good for business." Your new friends will just have to learn the hard way.
A fool and his money are good for business.
mathwhiz
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by mathwhiz »

They could be heavily in debt, but on the other hand maybe one of them was a trust fund baby worth $10 million? In other words, you can't really know what their finances are like. It's not really any of your business unless they ask you for advice or start bumming you up for money.
kenner
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by kenner »

mnvalue wrote: "ethical".
Do you really mean to invoke this concept? Definition of ethical means a determination of morality. Are you saying that this young doctor and this young lawyer are unethical and immoral regarding their decisions on how to spend their well-deserved earnings?
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by JonnyDVM »

mnvalue wrote:Everyone's advice here is always, "Just stay out of it." I'll offer a contrarian point-of-view: If someone said to you, "I never change the oil in my car. My brakes don't work well, so I'm going to take my car to this mechanic I know, who says I need to have him overhaul the engine. I'm not very good with cars." Do you think it's ethical to think, "Well, this idiot can make his own choices.", and just say, "That's nice."? I don't. I think you should say, "I don't think that's going to help. You need to find a proper fix to the brake problem, as that could be a safety hazard. When I have a car issue, here are some resources I use: call the dealership, call one of these two specific mechanics I trust, read book X, and/or ask the guys on Car Talk."
People don't like unsolicited advice on many things. Finances definitely falls into that category, Even if you mean well, you often end up rubbing people the wrong way. If they were basically trying to steer the conversation into getting advice that's one thing, but doling out unsolicited financial advice is not the way to keep friends. If someone says "I'm not very good with X " and there's a pause where they are obviously soliciting your knowledge about X that's one thing, but I did not get the sense from OP that's how the conversation went. Finances are not a matter of life and death like brakes.
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mnvalue
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by mnvalue »

kenner wrote:
mnvalue wrote: "ethical".
Do you really mean to invoke this concept? Definition of ethical means a determination of morality. Are you saying that this young doctor and this young lawyer are unethical and immoral regarding their decisions on how to spend their well-deserved earnings?
I'm saying it's immoral to A) feel strongly that someone is making decisions that you believe will harm them in some significant way, B) have the ability to point them to resources which you think would help them, and C) fail to do so. The OP thinks (unless I misunderstand) that the young doctor and young lawyer's financial choices are significantly harming them. The OP has the power to say, "If you're looking for a financial advisor or have financial questions, you should talk to Vanguard, or check out whitecoatinvestor.com, or read The Boglehead's Guide to Investing, or ask for help on bogleheads.org."

If you believe they're just making different choices than you, but both choices are reasonable, then that's different. It's certainly not immoral to fail to speak up if someone chooses a different color shirt than you would have.

If they disagree with your assessment, that's fine. Then you've said your peace and it's their business.

Edit: Real life is significantly more complicated than the three part test I've listed here. I'm not suggesting that one has to actively try to help everyone in the entire world with everything.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by kenner »

mnvalue wrote:
kenner wrote:
mnvalue wrote: "ethical".
Do you really mean to invoke this concept? Definition of ethical means a determination of morality. Are you saying that this young doctor and this young lawyer are unethical and immoral regarding their decisions on how to spend their well-deserved earnings?
I'm saying it's immoral to A) feel strongly that someone is making decisions that you believe will harm them in some significant way, B) have the ability to point them to resources which you think would help them, and C) fail to do so. The OP thinks (unless I misunderstand) that the young doctor and young lawyer's financial choices are significantly harming them. The OP has the power to say, "If you're looking for a financial advisor or have financial questions, you should talk to Vanguard, or check out whitecoatinvestor.com, or read The Boglehead's Guide to Investing, or ask for help on bogleheads.org."

If you believe they're just making different choices than you, but both choices are reasonable, then that's different. It's certainly not immoral to fail to speak up if someone chooses a different color shirt than you would have.

If they disagree with your assessment, that's fine. Then you've said your peace and it's their business.
Thank you for the clarificaion.

I can certainly appreciate your desire to help other people. I tend to be that way myself. I sometimes write some pretty caustic posts to get the attention of other people, hopefully to get them to analyze the big picture.

But it seems to me that there are times in life where it is advisable to make the decision to let people live their own lives and not interfere. I agree that it is sometimes difficult to choose between the options of helping vs. informing, but as for me I would opt for the decision to let other people make their own decisions, albeit perhaps ultimately with a subtle nudge in an appropriate direction. Maybe its an art form.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Caduceus »

I've only spoken about what has worked for me if friends ask. Apart from that, I usually don't broach the topic. The challenge is that a little knowledge can be a dangerous thing. Say you mention in passing that index funds are great; and then they think that anything that's indexed is great. Or if you mention that Target Date retirement funds are sufficient for anyone, but maybe you don't really know the specifics of their tax-advantaged situation/space available.

Something like "I really like The Bogleheads' Guide to Investing and am working through it" sounds like a non-intrusive, fairly ordinary level of conversational sharing. It shows them a path that has worked for you and it doesn't sound prescriptive. If they see you as someone who is financially-savvy and with sound judgment, they may just pick up that book for themselves.

Something like "active trading doesn't work, and you should do X, rather than Y" may be over-stepping the line a little (just my subjective opinion, of course) -- although indexing is fairly straightforward, prescribing a plan within the context of a person's overall financial situation is not, and it would involve fairly detailed conversations. It would be better for them to read and acquire the investing skills themselves.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by obgyn65 »

To the OP: I would not talk about financial matters with your new friends, if you want to keep them as friends.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by sunnyday »

Sounds like great friends to me. Enjoy some weekend outings on their boat and chip in for some gas instead of recommending how much they should save.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by hudson »

Consider sending them Boglehead posts on beverages, cars, boats, travel or anything else...except financial posts....they may or may not make the leap.
Last edited by hudson on Sun Mar 30, 2014 6:37 am, edited 1 time in total.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Kosmo »

Get newer friends?
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by frugalhen »

island wrote:"Help them"?
How they spend their money is there business; stay out of it.

Bingo
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by 4nursebee »

Most people are anti BH
They can't relate to what I do/say.
If they ask, I tell them the basics.
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kenner
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by kenner »

4nursebee wrote:Most people are anti BH
They can't relate to what I do/say.
If they ask, I tell them the basics.
Hi,

I can understand that many people may be anti-Boglehead. Have you been able to discern why they have anti-Boglehead feelings?
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by livesoft »

As described, these folks are not Anti-Bogleheads*. They are Non-Bogleheads. What to do? To start with, let them pay for dinner and use their boat.

*Anti-Bogleheads would have their own forum and be discussing ways on how to get their Boglehead friends to change.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by VTXVX »

Delete
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Cuzz35 »

My little experience has been that friends don't often listen to good advice from other friends. I hope I an wring and these have just been my experiences.

One example, I built a savings plan for a friend who had recently married. They wanted to buy a home. They had two large auto loans for brand new cars they bought. My plan would have them pay off the cars and save aggressively for a 20% down payment. With their income they would have done so in three years. However, they ignored my advice put 5% down on a home. Wife traded her new car for a newer car. A year later they are now divorced. In large part due to finances.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by YttriumNitrate »

SteelPenny wrote:2. Bought a new boat for rare weekend use.
Tis better to have friends that own boats than own a boat yourself...you and your wife should help them use the boat more often. :D
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by jfn111 »

I tried to offer some advice to a friend that took a high 6 figure lump sum instead of a monthly DB payout. The talk didn't go well. :oops:
Now I just shut up and let him buy the beer.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by basspond »

You don't have to tell them what to do but casually bring up books or this web site that has helped your financial understanding.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Grt2bOutdoors »

Mind your own business. If your input isn't asked for, then don't stick your nose into other people's affairs.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by boomergeneration »

I agree with all the other posters who say not to give advice. However, what I would do IF the subject comes up in conversation, is share what I do. If they are talking about meeting with possible advisors, I would mention they could get a free financial plan from Vanguard if they had a certain amount of money to invest. And mention how they have the lowest fees. If they were interested it would be up to them to ask more questions. Even rich people like to save money.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Fallible »

SteelPenny wrote:My spouse and I recently went on a double date with a new couple we met. They are really a nice and interesting couple. However, some of the financial decisions they are making were really unfortunate. The topic of finances never came up at all (at least I never brought it up), but being a Boglehead, I couldn't help but start doing the math in my head upon hearing things like: ...
As you say, these are "new" friends, so I would at least let the friendship develop further, concentrate on getting to know each other better and having fun doing it. Finances later, if necessary and then only if they seek your advice and then only say something like your interest is in low-cost index investing.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Jack FFR1846 »

Your friends are just fine.

Our best friends, since college have the idea that investing means to buy numbered prints from an artist's gallary and keeping up on the seasons tickets for all the local sports teams because....well....they can sell some of the tickets when they can't go for a profit.

We stay out of their business. It isn't our life and they have not asked. They're remortgaging their house to help pay for one of their kids in college (my savings have both my kids college expenses covered with zero aid) and both of them HAVE to work (my wife hasn't worked in a dozen years).

They have been friends for 30 years and we're able to stay out of their business. I think a new couple you just met with incomes probably tripple our friends would be easy to avoid the finance topic. Chances are, a financial advisor taking 5% would set them straighter than they presently are. Just back away and leave it alone.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by bengal22 »

If you make 400K a year, you can still spend a lot and be a good saver. Enjoy their company.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by cfs »

Respected forum members, good morning/afternoon/evening.

Sometimes the best thing to do is to do nothing. In 2006 a good friend recommended an investment making a ton of money in foreign exchange, he had invested the cash he had available to pay for his home, and I just said no (I did not tell my friend that the investment returns were unrealistic, too good to be true, he was one of the promoters of the investment). In 2008 during one of our meetings he bragged about making money while the large majority of investors (my SWAN portfolio included) were losing tons of money. By 2011 the leader of the group he was investing with was indicted, and I know that my friend lost every single penny, but I never dared to bring this up during our friendly conversations.

Now back to the original post, good to see that you want to help this family, but I would avoid the subject unless specifically asked for "an opinion" without giving any "financial advise" unless you are fully qualified and licensed to do so.

Thanks for reading this note.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by tadamsmar »

What to do?

Thank Creation for them, without some anti-Bogleheads there would be no liquidity and therefore no markets.

Whatever you do, don't convert too many of them. We need them.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by tibbitts »

There is sometimes an assumption here that the "boglehead way" is also the "right way." It's not - it's just one reasonable path of many. Another reasonable path for a couple making $400k is to buy two cars, a boat, and try some expensive hobbies.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by KyleAAA »

Do nothing. Annoying evangelist types make us all look bad.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by midareff »

memory not being what it was... it is either from Bobby Blue Bland or B.B. King .... I try to mind my own business, I leave other people's business alone.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by sscritic »

Big Bill Broonzy?
I'm just mindin' my own business
Lord, and I'm leavin' other peoples alone
Yeah, I'm just mindin' my own business
Oh, and I'm leavin' other peoples alone

Oh, because I got plenty of trouble
Already in my home
https://www.youtube.com/watch?v=lnTIWuAzRKo

[The quoted lyrics don't match the recording, but I am not going to fix it.]
heyyou
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by heyyou »

"When the student is ready, the teacher will appear" has the hidden hammer that the student may not be seeking the hard lesson that is encountered.

Consider letting the couple spend for a while to celebrate their educational achievements. The expensive financial advisor is better than their current situation. Give them some room to grow wiser from their own experiences.
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by dlw322 »

Raybo wrote:I agree that, unless they ask, keep away from talking finances.

On the other hand, I'd enjoy the toys these people have!
+1 :sharebeer
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Re: New Friends are the Anti-Bogleheads, what to do?

Post by Saving$ »

mnvalue wrote:
kenner wrote:
mnvalue wrote: "ethical".
Do you really mean to invoke this concept? Definition of ethical means a determination of morality. Are you saying that this young doctor and this young lawyer are unethical and immoral regarding their decisions on how to spend their well-deserved earnings?
I'm saying it's immoral to A) feel strongly that someone is making decisions that you believe will harm them in some significant way, B) have the ability to point them to resources which you think would help them, and C) fail to do so. The OP thinks (unless I misunderstand) that the young doctor and young lawyer's financial choices are significantly harming them. The OP has the power to say, "If you're looking for a financial advisor or have financial questions, you should talk to Vanguard, or check out whitecoatinvestor.com, or read The Boglehead's Guide to Investing, or ask for help on bogleheads.org."

If you believe they're just making different choices than you, but both choices are reasonable, then that's different. It's certainly not immoral to fail to speak up if someone chooses a different color shirt than you would have.

If they disagree with your assessment, that's fine. Then you've said your peace and it's their business.

Edit: Real life is significantly more complicated than the three part test I've listed here. I'm not suggesting that one has to actively try to help everyone in the entire world with everything.
This.
You should say SOMETHING, but you need to be judicious about it, and it must be said at an appropriate time, and be very relevant.

As soon as I read the initial post, I thought of White Coat Investor. Going to a site directed specifically to doctors addressing the specific challenge they have might resonate and hook them. I don't think Bogleheads would hook them unless they are already seeking advice on low cost investing. Chances are they don't even know what that is. If they get hooked by White Coat, they will make their way here soon enough.

I would find a time they are likely to be receptive, which is only when/if they mention wanting to learn more about how to manage their finances, to direct them to White Coat, with a comment that you are aware doctors find it to be a great resource for what they should look for in an advisor, and what they should ask the advisor. That way you are not shooting down their idea of an advisor, just offering a helpful resource. After that, leave it alone unless they specifically ask.
pingo
Posts: 2638
Joined: Sat Sep 19, 2009 8:24 pm

Re: New Friends are the Anti-Bogleheads, what to do?

Post by pingo »

Preach the word at all times, but use words only if necessary.

I think it's wise advice, not that I'm good at it.

They'll pick up on the differences as acutely as you did. Be careful not to judge. Don't let disapproval betray your underlying desire for their welfare. Find ways to encourage them when you believe they're exercising good judgment. If is not something you think you would do, it is out of your hands, so always wish them the best because the best is what you truly want for them.

I am reminded of a colleague who knew I am enthusiastic about investing. One day she asked me what I thought about an investment "opportunity" she learned about…

...at a hotel…
...that was combined with some insurance product…
…"guaranteed" not to lose money...
...that focused on past returns of an asset class (as if the company could keep reproducing them).

Mind you, this was after the market had already crashed 50% so it's not like it was a bad time to invest. I realized that she had come to me only hoping for my blessing because she had already put up the money and there was no turning back.

I told her that it might have helped to have come to me before making the decision so she could have someone else to help her bounce around the idea (and that she can always do so); that there may have been stronger choices for her to look into. But I also said that no one knows the future and that I hoped it would end up being a great thing.

Sadly, the money and the company have vanished. A very expensive lesson, but one that may have only come from experience rather than lecturing. It may have been a net postitive in the end, painful as it was.

If your friends see that something's working for you, or if experience brings them to a place where they can hear and digest what you have to offer, they'll ask. Then they'll make their own choice, which will still be different than you, but they'll have weighed their options and determined how best to apply what they know for their situation and dispositions. In a way, we all need "corrective lenses", but my prescription is not likely to help someone to see more clearly when our vision is so different. And, of course, it is wise to always remember that we aren't automatically right about what is best for others, though we may believe in what works for us.

I'm reminded of how many newbies come to this forum, including me. We arrive more by attraction, than by promotion; when we are searching, rather than being sought out.
Last edited by pingo on Tue Apr 01, 2014 10:02 pm, edited 6 times in total.
bogle_rad
Posts: 8
Joined: Mon Jul 01, 2013 7:04 pm

Re: New Friends are the Anti-Bogleheads, what to do?

Post by bogle_rad »

I agree that you should not offer unsolicited advice. Nobody really likes being unwittingly preached to.

However, also think about the possibility that you could be still be friends in 10 years or so, have never discussed your financial perspectives with them, and they then bring up whitecoatinvestor.com or some similar Boglehead-ish site...and say, "Gee, wish we had found this sooner!" That would be rather embarrassing to reply that you had known about it all along. Many of us have had that 'wish I had known about it earlier' sentiment. So again, don't offer unsolicited advice, but a casual comment at an apropos time about a useful site or book or your own general perspective could assuage your conscience.
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