How to Begin with 1M

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PalmQueen
Posts: 129
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Re: How to Begin with 1M

Post by PalmQueen » Wed Aug 29, 2018 9:09 pm

TylerLearning wrote:
Sat Aug 25, 2018 2:17 pm
Malinois000 wrote:
Sat Aug 25, 2018 1:02 pm
I have a Schwab account with the same balance as yours and my wife has a Vanguard account. I don't think there is much difference - in fact, I prefer Schwab. However, I did not sign up for their advisory services as I invest on my own. No AUM charges if you decide to go that route. In other words, you do not need to leave Schwab - just advise you no longer need or want the advisory services.
Thanks for taking the time to reply. My FA set up my money with him to dump back into my savings if I take his name off. And since the FA isn't in Schwab's "network," they won't look at my account. My experiences with Schwab customer service so far have been poor. Generally, it's been hard to put the just-do-this advice into practice so far. But I look forward to feeling the way you do and it's good information.
Does anyone else see a red flag regarding how the account is setup with the FA and Schwab? How has the FA managed to insert themselves between the client and Schwab?

Is this typical that all the funds would be cashed out and put into his savings if the FA is relieved of duties? Would this mean investments would be liquidated regardless of tax consequences? I would think the holdings would stay in the Schwab account without being cashed out.

TylerLearning, with the amount in your account, I would think Schwab would be working hard to maintain your business.

Hopefully others with more experience are in a better position to address this.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Wed Aug 29, 2018 10:48 pm

PalmQueen wrote:
Wed Aug 29, 2018 9:09 pm
TylerLearning wrote:
Sat Aug 25, 2018 2:17 pm
Malinois000 wrote:
Sat Aug 25, 2018 1:02 pm
I have a Schwab account with the same balance as yours and my wife has a Vanguard account. I don't think there is much difference - in fact, I prefer Schwab. However, I did not sign up for their advisory services as I invest on my own. No AUM charges if you decide to go that route. In other words, you do not need to leave Schwab - just advise you no longer need or want the advisory services.
Thanks for taking the time to reply. My FA set up my money with him to dump back into my savings if I take his name off. And since the FA isn't in Schwab's "network," they won't look at my account. My experiences with Schwab customer service so far have been poor. Generally, it's been hard to put the just-do-this advice into practice so far. But I look forward to feeling the way you do and it's good information.
Does anyone else see a red flag regarding how the account is setup with the FA and Schwab? How has the FA managed to insert themselves between the client and Schwab?

Is this typical that all the funds would be cashed out and put into his savings if the FA is relieved of duties? Would this mean investments would be liquidated regardless of tax consequences? I would think the holdings would stay in the Schwab account without being cashed out.

TylerLearning, with the amount in your account, I would think Schwab would be working hard to maintain your business.

Hopefully others with more experience are in a better position to address this.
Hello PalmQueen. Well, when a family friend set me up with this independent FA, I really was in post-death-and-disaster mode. So I told him I wasn't thinking very clearly and asked what would happen if I changed my mind--he said, oh, I'll just give you all your money back. To tell you how ignorant I was, I even thought I was entering a relationship just with him. It was with one foot out the door that he said over his shoulder that he'd send the paperwork for Schwab--I was unclear on the concept that he'd put my money at Schwab. So I'm not sure who inserted who, where. People here have encouraged me to call Schwab to have him taken off my account, but I imagine from the FA's perspective, he was doing me a special favor to set it up to give me everything back, instead of saddling me with a Schwab account I might well not want.

From reading here, I've been suspicious that there might be "tax consequences" to just liquidating. Here, I was told not. But I'm skittish about pulling the money from him; I don't have the skills, time, or interest to manage what the FA chose; and paying a different "advisor" at Schwab or Vanguard to choose for me is also an expense.

Funny, I wrote here the first time I posted here: "I’ve gotten increasingly concerned about making my own decisions, reading here about loads, exit and hidden fees, bonuses, tax implications, ERs, ladders, AAs, target dates and endless considerations that I won’t know to consider."

And I have to confess that the usurious, scandalous, gouging, non-deductible-in-2018 fee he charges me--$437.50/month at .75% on 700,000--sounds more stomach-able as the days on this thread pass. People say the $1100/month he earns on my money after his fees is a terrible return, but there are also plenty of threads on here about people who lost their money "investing on their own." Yes, I'm hiding money from him; yes, I hate talking to him. But even after multiple calls, Schwab won't give me the time of day, Vanguard doesn't know I exist, and if I end up sleeping in a cardboard box under a freeway overpass, nobody here will bring me a sandwich!

PalmQueen, thanks for your question and comment. I do appreciate everything everyone is saying. It is said: grief doesn't go in a straight line but a spiral--I guess today is one of those spiral days... Best wishes,
Last edited by TylerLearning on Thu Aug 30, 2018 3:48 pm, edited 1 time in total.

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Blister
Posts: 129
Joined: Fri Feb 17, 2012 8:59 am
Location: Tennessee

Re: How to Begin with 1M

Post by Blister » Thu Aug 30, 2018 11:46 am

Tylerlearning

Just reading thru this thread this AM. I get the feeling that you are very overwhelmed at this point. You have been given lots of good advice but I feel your hesitation in making any changes. I am going to take a different approach. I advise you to do nothing for at least a month. You need to educate yourself and learn some of the basics. Read the book by Jane Bryant Quinn "How to Make your Money Last" She is a great writer and makes things very understandable. There are other books in the Wiki here that are also excellent.

In one of your post you said you thought the FA was doing you a favor. No ... You are paying him about 500/mo. He is your employee. I suspect you have a written contract with him somewhere that you need to review. It should be spelled out for you how you can terminate this relationship. He probably has some Power of Attorney over your account and thats why Schwab is not talking to you. This can also be terminated.

One of the first things someone getting a windfall (inheritance, settlement, lottery win, etc) should do is nothing until they have a plan. As you also stated at the time of your parents death you weren't thinking straight and thats when you are more susceptible to making mistakes so just take your time. As you learn more you will be able to ask better questions and act with confidence.

Don't think of this as a race but a journey for the rest of your life. Relax you are in good shape. :happy
Everthing works out in the end. If it doesn't then its not the end.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Aug 30, 2018 1:15 pm

Blister wrote:
Thu Aug 30, 2018 11:46 am
Tylerlearning

Just reading thru this thread this AM. I get the feeling that you are very overwhelmed at this point. You have been given lots of good advice but I feel your hesitation in making any changes. I am going to take a different approach. I advise you to do nothing for at least a month. You need to educate yourself and learn some of the basics. Read the book by Jane Bryant Quinn "How to Make your Money Last" She is a great writer and makes things very understandable. There are other books in the Wiki here that are also excellent.

In one of your post you said you thought the FA was doing you a favor. No ... You are paying him about 500/mo. He is your employee. I suspect you have a written contract with him somewhere that you need to review. It should be spelled out for you how you can terminate this relationship. He probably has some Power of Attorney over your account and thats why Schwab is not talking to you. This can also be terminated.

One of the first things someone getting a windfall (inheritance, settlement, lottery win, etc) should do is nothing until they have a plan. As you also stated at the time of your parents death you weren't thinking straight and thats when you are more susceptible to making mistakes so just take your time. As you learn more you will be able to ask better questions and act with confidence.

Don't think of this as a race but a journey for the rest of your life. Relax you are in good shape. :happy
Blister, thank you very much for the kindness in your thoughtful reply. If there's some urgency in my tone, it's because he's already had my money for a year (August 2017) and now his fees won't even be deductible. Every day I hear that giant sucking sound which is my mom's money--money she hoped would support me--landing in the FA's new summer home. Attempting to stay on point in terms of forum policy, I started a different thread to talk about "the favor" (How to Begin with $50,000), which was to take on my son's money, too, at something like .35% although the FA's minimum is $500,000. I'm not interpersonally shy about getting the money back from him, but I don't know what consequences to expect or prepare for.

Yes, I've received various kinds of advice here about how to put the money somewhere ("invest"). But just the same as with the FA from the start, I don't know what the consequences of putting the money somewhere are. If you're opening a bank account, you still control the money: you know how much to put in, how to withdraw the money, whether there are limits to withdrawals, you know you will earn 0.01% if it's Chase Bank, 1.something% if it's Ally or whatever. You'll get a statement. If you want to move money between your checking or savings accounts, you just do it and it's your own business when or why. If you have a question, you call them up and ask, it's free. You have debit and credit cards, you know how and where you can use them. You can budget for the things you want to have or do. If you change your mind about any of this and want to close your account(s), cancel your cards and move to Timbuktu, you just do it.

Not one of these seems to be true of an investment account. Or if it is, I'll be glad to hear it. Every step seems to have hidden consequences, some of them quite serious. And expensive. Just "give them your money and everything will be fine" doesn't tell me what I need to know to give my money to strangers. Not even close. Believe me, it's not for lack of reading, consulting, considering. I can only think that that kind of advice--just go ahead!--is being exchanged here between people who've had financial lives in companies and, in any case, significantly different from mine: cash-based, self-employed, international, and in the arts. Each of those components requires different skills, thinking, and challenges, many of which would make the investment-brave souls here quail. I also suspect the people here won't lose everything if they lose investment money, and also that they have family or other emotional support while they're taking their risks.

I'm going to keep in mind your closing: journey, relax, good shape, and a smile. I appreciate your writing to me.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Aug 30, 2018 2:28 pm

Blister wrote:
Thu Aug 30, 2018 11:46 am
Tylerlearning

Read the book by Jane Bryant Quinn "How to Make your Money Last" She is a great writer and makes things very understandable. There are other books in the Wiki here that are also excellent.
Blister wrote:
Thu Aug 30, 2018 11:46 am

Bryant says her book is about budgeting, mortgages, debt, and investing while waiting for your pension to kick in. Since I am the world's best budgeter, own my house, have no debt and no pension, this is not a book for me.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Aug 30, 2018 3:52 pm

gilgamesh wrote:
Wed Aug 29, 2018 3:27 pm
TylerLearning wrote:
Wed Aug 29, 2018 12:58 pm
gilgamesh wrote:
Wed Aug 29, 2018 6:12 am
TylerLearning wrote:
Mon Aug 27, 2018 10:07 pm
gilgamesh wrote:
Sun Aug 26, 2018 10:06 am
These historic figures may help

https://personal.vanguard.com/us/insigh ... ns?lang=en

I can’t find a link to a page where you can set ant asset allocation and date range and it will give you the return. If I find it, will post later
Gilgamesh, this link is precious, oooooooh WOW.

I am waiting eagerly for the other page you mention--crossing fingers you can post it. Thanks in advance!!
https://www.flickr.com/gp/10712628@N02/65v7qL

I could not find the page. But here is a screen capture of the results I saved a while back... You choose AA and time frame with the sliders at the bottom, and results are displayed graphically as above. You may want to do a search and see whether you can find it or someone else may recognize it and post the link.
Really nice of you to find and post this, Gilgamesh. Can I ask you: what kind of search terms did you use to find this? Along with the kinds of links you're sharing, I keep looking for something that would simulate what a statement, trade, sale, or withdrawal would look like. I'm finding that without something like that, the notion of investing in such-and-such feels a bit like throwing the money off a cliff. Advice for how to search?

And I'll remember your help when I use your links, thank so much.
...

in all my learning I found blog posts my Kitces to be absolutely fabulous. He has no agenda, just pure smarts...I would advice you to read everything he had written...Kitces
There doesn't seem to be a member with the name Kitces.

User avatar
gilgamesh
Posts: 1500
Joined: Sun Jan 10, 2016 9:29 am

Re: How to Begin with 1M

Post by gilgamesh » Thu Aug 30, 2018 6:13 pm

TylerLearning wrote:
Thu Aug 30, 2018 3:52 pm
gilgamesh wrote:
Wed Aug 29, 2018 3:27 pm
TylerLearning wrote:
Wed Aug 29, 2018 12:58 pm
gilgamesh wrote:
Wed Aug 29, 2018 6:12 am
TylerLearning wrote:
Mon Aug 27, 2018 10:07 pm


Gilgamesh, this link is precious, oooooooh WOW.

I am waiting eagerly for the other page you mention--crossing fingers you can post it. Thanks in advance!!
https://www.flickr.com/gp/10712628@N02/65v7qL

I could not find the page. But here is a screen capture of the results I saved a while back... You choose AA and time frame with the sliders at the bottom, and results are displayed graphically as above. You may want to do a search and see whether you can find it or someone else may recognize it and post the link.
Really nice of you to find and post this, Gilgamesh. Can I ask you: what kind of search terms did you use to find this? Along with the kinds of links you're sharing, I keep looking for something that would simulate what a statement, trade, sale, or withdrawal would look like. I'm finding that without something like that, the notion of investing in such-and-such feels a bit like throwing the money off a cliff. Advice for how to search?

And I'll remember your help when I use your links, thank so much.
...

in all my learning I found blog posts my Kitces to be absolutely fabulous. He has no agenda, just pure smarts...I would advice you to read everything he had written...Kitces
There doesn't seem to be a member with the name Kitces.
Sorry for the confusion...he’s not a member here

https://www.kitces.com

I just looked at his website, the contents are too cluttered. What I would suggest is, if you have a topic you want to learn, just google Kitces and that topic of interest. If he had written about it, most likely it would be very beneficial.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Aug 30, 2018 6:19 pm

gilgamesh wrote:
Thu Aug 30, 2018 6:13 pm
TylerLearning wrote:
Thu Aug 30, 2018 3:52 pm
gilgamesh wrote:
Wed Aug 29, 2018 3:27 pm
TylerLearning wrote:
Wed Aug 29, 2018 12:58 pm
gilgamesh wrote:
Wed Aug 29, 2018 6:12 am


https://www.flickr.com/gp/10712628@N02/65v7qL

I could not find the page. But here is a screen capture of the results I saved a while back... You choose AA and time frame with the sliders at the bottom, and results are displayed graphically as above. You may want to do a search and see whether you can find it or someone else may recognize it and post the link.
Really nice of you to find and post this, Gilgamesh. Can I ask you: what kind of search terms did you use to find this? Along with the kinds of links you're sharing, I keep looking for something that would simulate what a statement, trade, sale, or withdrawal would look like. I'm finding that without something like that, the notion of investing in such-and-such feels a bit like throwing the money off a cliff. Advice for how to search?

And I'll remember your help when I use your links, thank so much.
...

in all my learning I found blog posts my Kitces to be absolutely fabulous. He has no agenda, just pure smarts...I would advice you to read everything he had written...Kitces
There doesn't seem to be a member with the name Kitces.
Sorry for the confusion...he’s not a member here

https://www.kitces.com

I just looked at his website, the contents are too cluttered. What I would suggest is, if you have a topic you want to learn, just google Kitces and that topic of interest. If he had written about it, most likely it would be very beneficial.
Sorry, I went through the motions of deleting that, seems it didn't take. You did say "blog." Found it but it seems to be directed towards FAs and even selling stuff. Your googling name + topic sounds like a good one. Best again,

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Wed Sep 05, 2018 10:43 pm

TylerLearning wrote:
Sun Aug 19, 2018 3:00 pm
Hello, I am adding this to my OP (below).

Following advice from this forum, I've asked my independent FA to help me end our relationship (and my son's with him, too). He had opened a Schwab account, where my money is now. I talked to Vanguard today, having read here that I could just call Vanguard and they'd take care of moving my money and the whole thing. This is far from the truth. Along with much other news--for example that they charge $7 for what Schwab charges $4.95 for--they've sent me back to the FA to handle all this, and to contact a tax accountant. Here, where readers knew a little more about my situation, I was told the tax aspect of my moving to VG isn't really a consideration.

I asked the FA to review my options and this is what he said. I will appreciate anyone's sense of what he wrote, and also what I should do next. See his A, B, and C. I especially don't know how to evaluate the paragraph about the LT gains. Thank you in advance:

A. Closing the Account

Closing the account requires selling all stocks and funds. Schwab will charge about $12.95 for each stock/etf and $25 for each fund. Note that you can lower the cost of selling stocks/etfs to $4.95/trade by signing up for e-signature and e-statements. I estimate commissions would total around $675, but would be reduced to $400 if you were signed up for reduced commissions.

You would also owe taxes on the gains. As of yesterday (subject to market fluctuation), you had LT gains of $2,417, which are subject to a lower tax rate. You also had short-term gains of $9,404, subject to a less favorable ordinary income tax rate. You also have a Treasury that Matures on 9/15/2018. If you sell everything except that Treasury and the short-term securities with gains that go long-term on 9/17/2018, it will reduce your short-term gains to $307 and increase your LT gains to $11,514. Keep in mind these numbers could change with the market ups and downs over the next two weeks.

Charles Schwab may charge a $50 exit fee for closing the account or transferring the account.

B. Transferring the Account

Transferring the account to another broker would incur an $50 exit fee and the assets would remain fully invested. You would need to find another broker/custodian besides Charles Schwab. Most other brokers will charge comparable fees and expenses.

C. De-Linking

Another option would be for us to “de-link” the account. That would keep the assets invested exactly as they are today and you would interact with Schwab for all investment advice/decisions. There would be no exit fee to de-link the account.

------------------------------------------
------------------------------------------
Original Post:

Hello, I’ve been reading here extensively for several months. Of course touched and impressed by everyone.

I recently inherited 1M (final distribution about an hour ago). 62 (longevity in my family). Nearly retired (means working freelance less). No family except son, 23 (lives abroad). No debt, car, cellphone, or TV. Paid off my house. Savings: high. Live in California.

I need to move forward from an essentially cash-and-savings life. In a chaotic period of grief for my parent, a family friend set me up with a “financial advisor.” Since last year, my $700,000 has earned just under $9000 and, AUM-ing me at .75%, I’ve paid him nearly the same. I so much want to extricate myself from him, but… how? It sounds tricky. And what to do next? I can barely make heads or tails of my statement (Schwab).

I’ve gotten increasingly concerned about making my own decisions, reading here about loads, exit and hidden fees, bonuses, tax implications, ERs, ladders, AAs, target dates and endless considerations that I won’t know to consider.

In my life I've handled complex financial situations (two low- and no-overhead businesses; changing countries) but know nothing about caring for this new sum or what's next: investing—but also trust, will, taxes, life and death insurance, and so on. Other information:

What I have

1. In the high 200,000s/low 300,000s: Chase account, earning pennies (hiding from advisor)
2. $1800: Bank of America checking for bills, with credit card, earning pennies.
3. The Schwab-advisor account (see above).
4. I qualify for Medi-Cal health insurance, and free tax preparation.
Now I’m living from freelance earnings + savings—about $25,00/year

*

What I expect

No retirement accounts or pensions.
Freelance income as long as I’m able: $6-10,000
Will qualify for Medicare.
About $1060 at 66-1/2 from Social Security.

*

Hopes, wild and other

1. To live off interest and dividends from investment.
2. To be a little freer with money than I’ve been for a long time.
3. To have an occasional housecleaner and a monthly gardener.
4. To repair and upgrade the house: $20-30,000?
5. To be able to do something(s) a bit big: take a trip where I’m not squirreling leftovers in the hotel mini-fridge? Buy a good painting? Buy a little room (pied à terre) in another country?
6. To leave my principal (most?) and house to my son.

*

Note 1. If I lose the money, there’s no more where that came from.

Note 2. I saw how the “home care” people sucked six figures from my parent (98 years old) in the last year or less—> don’t-want-to-be-a-burden-to-my-son.

*

Thank you in advance to anyone with advice about how to maximize what I have. A three-fund portfolio? Vanguard advisor? Schwab advisor?No advisor? CDs? FIDC everything? Hourly financial planner? All new and daunting to me.

Best,

User avatar
PalmQueen
Posts: 129
Joined: Sun Jul 08, 2018 6:09 pm

Re: How to Begin with 1M

Post by PalmQueen » Wed Sep 05, 2018 11:29 pm

Congratulations! You're making progress.

I would start with Option C: De-Link the Account.
This will accomplish your objective of removing the FA and associated fees.

That done, you can evaluate whether you want to continue using Schwab or select Option B and transfer the funds to Fidelity or Vanguard.

I see no reason to consider Option A under any circumstance.

Yes, eventually you will likely want to make some changes to your investments, but that doesn't need to happen in order to remove the FA.

I'm happy to see your post that you're getting the information you need to accomplish your objectives. Nice work.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Sep 06, 2018 12:27 am

PalmQueen wrote:
Wed Sep 05, 2018 11:29 pm
Congratulations! You're making progress.

I would start with Option C: De-Link the Account.
This will accomplish your objective of removing the FA and associated fees.

That done, you can evaluate whether you want to continue using Schwab or select Option B and transfer the funds to Fidelity or Vanguard.

I see no reason to consider Option A under any circumstance.

Yes, eventually you will likely want to make some changes to your investments, but that doesn't need to happen in order to remove the FA.

I'm happy to see your post that you're getting the information you need to accomplish your objectives. Nice work.
--> Thank you for your reply and encouragement.
--> I don't have much sense of what "kind" of account I'll end up in Schwab post-de-linking. Sadly, I couldn't get a clear answer from Schwab. [insert frowny face]
--> Can it make sense to de-link and then just let everything sit in Schwab while making no further decision about going or staying? Option B-ing or no? I swear, this is all coming at a terrible time, I need to come back to it in December or so.
--> Well, Option A was aligned with some responders here who recommended just selling everything and starting over. But I had no idea it would be so expensive.
--> Your reply gives me some sense of breathing room, which is very helpful. OK, on to Option C. I kind of dread asking Schwab's help tomorrow--their much-lauded customer service has been awful. Sigh...
Thanks again.

User avatar
PalmQueen
Posts: 129
Joined: Sun Jul 08, 2018 6:09 pm

Re: How to Begin with 1M

Post by PalmQueen » Thu Sep 06, 2018 9:01 am

I messed up the quote system - Quote is in italics - response below in regular text.
[/quote]

--> Thank you for your reply and encouragement.
--> I don't have much sense of what "kind" of account I'll end up in Schwab post-de-linking. Sadly, I couldn't get a clear answer from Schwab. [insert frowny face]
--> Can it make sense to de-link and then just let everything sit in Schwab while making no further decision about going or staying? Option B-ing or no? I swear, this is all coming at a terrible time, I need to come back to it in December or so.
--> Well, Option A was aligned with some responders here who recommended just selling everything and starting over. But I had no idea it would be so expensive.
--> Your reply gives me some sense of breathing room, which is very helpful. OK, on to Option C. I kind of dread asking Schwab's help tomorrow--their much-lauded customer service has been awful. Sigh...
Thanks again.
[/quote]


The account you'll have at Schwab will be a brokerage account, exactly what you have now except that now you won't have the FA inserting themselves between you and your investments. The account isn't changing. The change is what you set out to do in the beginning, removing the FA.

And yes, you have breathing room. You can let everything sit at Schwab while you decide whether to leave it there long term.

There is no reason for you to be nervous about meeting with a representative from Schwab. You are the client. They work for you.
I would approach it as an informative session. You want them to explain how their services work and how to use their website interface and its features. That should be good for one meeting. You will likely want to have a series of meetings with them. Your account balance entitles you to this.

It's not unlike countless meetings you've had over the years related to your other business interests.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Thu Sep 06, 2018 11:11 pm

PalmQueen wrote:
Thu Sep 06, 2018 9:01 am
I messed up the quote system - Quote is in italics - response below in regular text.


--> Thank you for your reply and encouragement.
--> I don't have much sense of what "kind" of account I'll end up in Schwab post-de-linking. Sadly, I couldn't get a clear answer from Schwab. [insert frowny face]
--> Can it make sense to de-link and then just let everything sit in Schwab while making no further decision about going or staying? Option B-ing or no? I swear, this is all coming at a terrible time, I need to come back to it in December or so.
--> Well, Option A was aligned with some responders here who recommended just selling everything and starting over. But I had no idea it would be so expensive.
--> Your reply gives me some sense of breathing room, which is very helpful. OK, on to Option C. I kind of dread asking Schwab's help tomorrow--their much-lauded customer service has been awful. Sigh...
Thanks again.
[/quote]


The account you'll have at Schwab will be a brokerage account, exactly what you have now except that now you won't have the FA inserting themselves between you and your investments. The account isn't changing. The change is what you set out to do in the beginning, removing the FA.

And yes, you have breathing room. You can let everything sit at Schwab while you decide whether to leave it there long term.

There is no reason for you to be nervous about meeting with a representative from Schwab. You are the client. They work for you.
I would approach it as an informative session. You want them to explain how their services work and how to use their website interface and its features. That should be good for one meeting. You will likely want to have a series of meetings with them. Your account balance entitles you to this.

It's not unlike countless meetings you've had over the years related to your other business interests.
[/quote]

PalmQueen, this was a helpful and reassuring reply, I thought of it during the day when I got shaky. The FA is hostile and leaving weird phone messages, which I'm not returning. Actually, I'll be talking to Schwab on the phone, not in person, but your comments still stand. Funny, when I called Vanguard, they told me Schwab would be cheaper. I feel like I'm either joining or leaving a cult. Your last sentence is a treasure and clears my head. Thank you very, very much.

mweivoda
Posts: 7
Joined: Sat Aug 04, 2018 1:21 pm

Re: How to Begin with 1M

Post by mweivoda » Fri Sep 07, 2018 12:04 am

TylerLearning wrote:
Wed Aug 29, 2018 8:53 pm
gilgamesh wrote:
Wed Aug 29, 2018 3:27 pm
TylerLearning wrote:
Wed Aug 29, 2018 12:58 pm
gilgamesh wrote:
Wed Aug 29, 2018 6:12 am
TylerLearning wrote:
Mon Aug 27, 2018 10:07 pm


Gilgamesh, this link is precious, oooooooh WOW.

I am waiting eagerly for the other page you mention--crossing fingers you can post it. Thanks in advance!!
https://www.flickr.com/gp/10712628@N02/65v7qL

I could not find the page. But here is a screen capture of the results I saved a while back... You choose AA and time frame with the sliders at the bottom, and results are displayed graphically as above. You may want to do a search and see whether you can find it or someone else may recognize it and post the link.
Really nice of you to find and post this, Gilgamesh. Can I ask you: what kind of search terms did you use to find this? Along with the kinds of links you're sharing, I keep looking for something that would simulate what a statement, trade, sale, or withdrawal would look like. I'm finding that without something like that, the notion of investing in such-and-such feels a bit like throwing the money off a cliff. Advice for how to search?

And I'll remember your help when I use your links, thank so much.
I found those links about 3 yees ago. I tried every imaginable search term to find you the link and I had no success. I put a lot of effort and as I failed,bI think that particular page may not be available any more.

I’m type A like I suspect you are...once I need to solve something, I’m like a Rottweiler on a bone. 3 years ago I spent every breathing moment to learn this stuff...I’m sure I was dreaming about this stuff. There’s no way for me to tell you which branch/search of my learning lead to the links. Sorry!...but in all my learning I found blog posts my Kitces to be absolutely fabulous. He has no agenda, just pure smarts...I would advice you to read everything he had written...Kitces

Statement? That shouldn’t be so complicating...what’s holding you back there?

Trade, sale has everything to do with whether you are doing it inside a retirement account or taxable. If the former you can do to your hearts content as long as it’s within the same institution. If you are jumping institutions then you have to follow some rollover rules.

If it’s taxable, then my rule is better prepare so there’s no such trades and sales until you are ready to retire. Tax loss harvesting is IMO is peanuts...either you pay taxes now or later, benefits are minimal given human capital. That last sentence may not make much sense, but basically invest your taxable account so you don’t have to withdraw (ideally not have to touch it to rebalance) from it until after retirement.

Withdrawal? Oh boy! That can be easy or infinitely complicated based on how far you want to venture into the rabbit hole. It’s infinite...just study sequence risk and and it’d be fine now.

Sorry! I couldn’t help you with the search terms...when I was learning, even when I thought I was correct and others were wrong, I bit my tongue and listened to all advice. Only thing that mattered was gaining knowledge and saving face was irrelevant ...I’m glad you’ve learned that too (just an archaic observation...doesn’t mean much) :sharebeer
Gilgamesh, thanks for all this, for looking for the link, and also for sharing a little of your own learning curve.
No matter how many posts I post or questions I ask, there always seem to be more terms, considerations, concepts, and so on.
At this point, if I don't take the whole wad and simply burn it, I'll surely be referring back to your excellent and friendly posts.
Seems like this might be the second link you're looking for:
https://www.vanguardinvestor.co.uk/inve ... sset-mixer

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Fri Sep 07, 2018 12:10 am

mweivoda wrote:
Fri Sep 07, 2018 12:04 am
TylerLearning wrote:
Wed Aug 29, 2018 8:53 pm
gilgamesh wrote:
Wed Aug 29, 2018 3:27 pm
TylerLearning wrote:
Wed Aug 29, 2018 12:58 pm
gilgamesh wrote:
Wed Aug 29, 2018 6:12 am


https://www.flickr.com/gp/10712628@N02/65v7qL

I could not find the page. But here is a screen capture of the results I saved a while back... You choose AA and time frame with the sliders at the bottom, and results are displayed graphically as above. You may want to do a search and see whether you can find it or someone else may recognize it and post the link.
Really nice of you to find and post this, Gilgamesh. Can I ask you: what kind of search terms did you use to find this? Along with the kinds of links you're sharing, I keep looking for something that would simulate what a statement, trade, sale, or withdrawal would look like. I'm finding that without something like that, the notion of investing in such-and-such feels a bit like throwing the money off a cliff. Advice for how to search?

And I'll remember your help when I use your links, thank so much.
I found those links about 3 yees ago. I tried every imaginable search term to find you the link and I had no success. I put a lot of effort and as I failed,bI think that particular page may not be available any more.

I’m type A like I suspect you are...once I need to solve something, I’m like a Rottweiler on a bone. 3 years ago I spent every breathing moment to learn this stuff...I’m sure I was dreaming about this stuff. There’s no way for me to tell you which branch/search of my learning lead to the links. Sorry!...but in all my learning I found blog posts my Kitces to be absolutely fabulous. He has no agenda, just pure smarts...I would advice you to read everything he had written...Kitces

Statement? That shouldn’t be so complicating...what’s holding you back there?

Trade, sale has everything to do with whether you are doing it inside a retirement account or taxable. If the former you can do to your hearts content as long as it’s within the same institution. If you are jumping institutions then you have to follow some rollover rules.

If it’s taxable, then my rule is better prepare so there’s no such trades and sales until you are ready to retire. Tax loss harvesting is IMO is peanuts...either you pay taxes now or later, benefits are minimal given human capital. That last sentence may not make much sense, but basically invest your taxable account so you don’t have to withdraw (ideally not have to touch it to rebalance) from it until after retirement.

Withdrawal? Oh boy! That can be easy or infinitely complicated based on how far you want to venture into the rabbit hole. It’s infinite...just study sequence risk and and it’d be fine now.

Sorry! I couldn’t help you with the search terms...when I was learning, even when I thought I was correct and others were wrong, I bit my tongue and listened to all advice. Only thing that mattered was gaining knowledge and saving face was irrelevant ...I’m glad you’ve learned that too (just an archaic observation...doesn’t mean much) :sharebeer
Gilgamesh, thanks for all this, for looking for the link, and also for sharing a little of your own learning curve.
No matter how many posts I post or questions I ask, there always seem to be more terms, considerations, concepts, and so on.
At this point, if I don't take the whole wad and simply burn it, I'll surely be referring back to your excellent and friendly posts.
Seems like this might be the second link you're looking for:
https://www.vanguardinvestor.co.uk/inve ... sset-mixer
Oh, that's interesting, yes, thank you.

tlev89
Posts: 5
Joined: Mon Jul 23, 2018 6:52 pm

Re: How to Begin with 1M

Post by tlev89 » Fri Sep 07, 2018 12:19 am

What's the tax implications for a single premium annuity?

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Fri Sep 07, 2018 1:26 am

tlev89 wrote:
Fri Sep 07, 2018 12:19 am
What's the tax implications for a single premium annuity?
I'm new to the entire matter and hope someone(s) will give you helpful answers.
I've also had some luck putting search terms in the Subject box--in your case, "tax implications" and so on, try as many variations as you can think of, I bet there are comments somewhere on the vast forum that will hit the spot. (And I'll be watching here for the answer to your questions, too.)

User avatar
PalmQueen
Posts: 129
Joined: Sun Jul 08, 2018 6:09 pm

Re: How to Begin with 1M

Post by PalmQueen » Fri Sep 07, 2018 11:07 am

TylerLearning wrote:
Thu Sep 06, 2018 11:11 pm
PalmQueen wrote:
Thu Sep 06, 2018 9:01 am
I messed up the quote system - Quote is in italics - response below in regular text.


--> Thank you for your reply and encouragement.
--> I don't have much sense of what "kind" of account I'll end up in Schwab post-de-linking. Sadly, I couldn't get a clear answer from Schwab. [insert frowny face]
--> Can it make sense to de-link and then just let everything sit in Schwab while making no further decision about going or staying? Option B-ing or no? I swear, this is all coming at a terrible time, I need to come back to it in December or so.
--> Well, Option A was aligned with some responders here who recommended just selling everything and starting over. But I had no idea it would be so expensive.
--> Your reply gives me some sense of breathing room, which is very helpful. OK, on to Option C. I kind of dread asking Schwab's help tomorrow--their much-lauded customer service has been awful. Sigh...
Thanks again.


The account you'll have at Schwab will be a brokerage account, exactly what you have now except that now you won't have the FA inserting themselves between you and your investments. The account isn't changing. The change is what you set out to do in the beginning, removing the FA.

And yes, you have breathing room. You can let everything sit at Schwab while you decide whether to leave it there long term.

There is no reason for you to be nervous about meeting with a representative from Schwab. You are the client. They work for you.
I would approach it as an informative session. You want them to explain how their services work and how to use their website interface and its features. That should be good for one meeting. You will likely want to have a series of meetings with them. Your account balance entitles you to this.

It's not unlike countless meetings you've had over the years related to your other business interests.
[/quote]

PalmQueen, this was a helpful and reassuring reply, I thought of it during the day when I got shaky. The FA is hostile and leaving weird phone messages, which I'm not returning. Actually, I'll be talking to Schwab on the phone, not in person, but your comments still stand. Funny, when I called Vanguard, they told me Schwab would be cheaper. I feel like I'm either joining or leaving a cult. Your last sentence is a treasure and clears my head. Thank you very, very much.
[/quote]

You're most welcome.
Does Schwab have an office in your area? If so, when you're ready you could make an appointment to meet with a Senior Financial Consultant. They aren't Financial Advisors so there's no fee for talking with them. They can give you an overview of how to use their online system to review and monitor your holdings, research investment choices, develop investment strategies, etc. Their job is to support and educate clients and potential clients.

It's OK to work with both the phone customer service department and a local consultant. (You don't need to wait for an in-person meeting to continue to move forward with de-linking the FA from your account.)

Kaktus
Posts: 73
Joined: Sun Apr 10, 2016 1:57 pm

Re: How to Begin with 1M

Post by Kaktus » Wed Jan 30, 2019 9:09 am

Hallo TylerLearning, I just browsed quickly through your travail.:) I got curious. It seems you are still not settled?

If this is all too overwhelming now I think as someone suggested that you should just leave it be and do some reading and discussing. To give a tip anything that John Bogle wrote. His books are very easily understandable technically also for an amateur like me. Also he never lost perspective on whats really important in life.
Or (what I would do) you call up Scwhab now and ask them how to disconnect your financial advisor, and ask how to get the dividends from your stocks transferred to your bank account. As long as I had stocks, I would use the dividends to live on. When that is done you can leave your investments as they are until you feel you know what to do.
I think that charge byyour "advisor" is costing you money for nothing. To all probability an advisor gambling with someone elses money and charging a fee for it will not beat the market over say ten years. This is proven again and again by Bogle in his books and many scholars. It can happen in a year. It can even happen in two. And those years he will tell you alot about it.:) Others here can give better and more advice than I can. Many people here who think its fun to discuss investing so just fire away.

I think that no one reacted to how much is possible to spend without running out? To give my view my rule of thumb is 3 percent (I am younger). This means that it is extremely probable that I will not run out of money if I don't sell more than 3 percent per year of my stocks value (3 percent of the market value the year I start to withdraw). Say that you have 500.000 worth of stocks to start with. 3 percent of that is 15.000. So I should not withrdraw more than 15.000 per year. As one more safety feature, I have some money in a bank account. So if it is a really bad year in the stock market I will take money from the bank account instead. If you can avoid to sell stocks in a really bad year for stocks it makes a great difference. As I want to be able to decide for myself if I should take money from my stocks or from bonds or from bank account I personally don't like the fonds that are mixing diffeent assets. But each to his own and I am Swedish and so not familiar with your tax system.

It seems you feel one must be very savvy to manage stocks and funds. But it really is not more difficult than using a regular bank account. If your advisor cannot explain it so that you can easily understand everything it is his fault and not yours. There is nothing very abstract or complex about investing. everything can be described in plain language (if you want to).

Best wishes!

typical.investor
Posts: 1223
Joined: Mon Jun 11, 2018 3:17 am

Re: How to Begin with 1M

Post by typical.investor » Wed Jan 30, 2019 9:32 am

TylerLearning wrote:
Wed Aug 29, 2018 10:48 pm

And I have to confess that the usurious, scandalous, gouging, non-deductible-in-2018 fee he charges me--$437.50/month at .75% on 700,000--sounds more stomach-able as the days on this thread pass. People say the $1100/month he earns on my money after his fees is a terrible return, but there are also plenty of threads on here about people who lost their money "investing on their own." Yes, I'm hiding money from him; yes, I hate talking to him. But even after multiple calls, Schwab won't give me the time of day, Vanguard doesn't know I exist, and if I end up sleeping in a cardboard box under a freeway overpass, nobody here will bring me a sandwich!
I don't think it's nearly as difficult as you are making it out to be. Ditch the advisor as an unneeded expense.

Simply choose an allocation and use broad based funds.

Something like 70% US - 30% International with 70% stocks and 30% bonds. (adjust to your risk tolerance - probably keep the amount in fixed income similar to what you have now as that's what you are used to).

When you plug those numbers into the spread sheet below (look for the yellow highlighted fields), you will see what the market cap weighted holding will be.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

I suggest giving it a shot, post what you came up with and ask for feedback on it.

Schwab also has a tool to suggest broad based index fund portfolios.

Notes:

* data is from Morningstar
* it's a publicly viewable/changeable form
* log in to a google account, access the page and you can save your own copy

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Fri Feb 08, 2019 4:39 pm

Kaktus wrote:
Wed Jan 30, 2019 9:09 am
Hallo TylerLearning, I just browsed quickly through your travail.:) I got curious. It seems you are still not settled?

If this is all too overwhelming now I think as someone suggested that you should just leave it be and do some reading and discussing. To give a tip anything that John Bogle wrote. His books are very easily understandable technically also for an amateur like me. Also he never lost perspective on whats really important in life.
Or (what I would do) you call up Scwhab now and ask them how to disconnect your financial advisor, and ask how to get the dividends from your stocks transferred to your bank account. As long as I had stocks, I would use the dividends to live on. When that is done you can leave your investments as they are until you feel you know what to do.
I think that charge byyour "advisor" is costing you money for nothing. To all probability an advisor gambling with someone elses money and charging a fee for it will not beat the market over say ten years. This is proven again and again by Bogle in his books and many scholars. It can happen in a year. It can even happen in two. And those years he will tell you alot about it.:) Others here can give better and more advice than I can. Many people here who think its fun to discuss investing so just fire away.

I think that no one reacted to how much is possible to spend without running out? To give my view my rule of thumb is 3 percent (I am younger). This means that it is extremely probable that I will not run out of money if I don't sell more than 3 percent per year of my stocks value (3 percent of the market value the year I start to withdraw). Say that you have 500.000 worth of stocks to start with. 3 percent of that is 15.000. So I should not withrdraw more than 15.000 per year. As one more safety feature, I have some money in a bank account. So if it is a really bad year in the stock market I will take money from the bank account instead. If you can avoid to sell stocks in a really bad year for stocks it makes a great difference. As I want to be able to decide for myself if I should take money from my stocks or from bonds or from bank account I personally don't like the fonds that are mixing diffeent assets. But each to his own and I am Swedish and so not familiar with your tax system.

It seems you feel one must be very savvy to manage stocks and funds. But it really is not more difficult than using a regular bank account. If your advisor cannot explain it so that you can easily understand everything it is his fault and not yours. There is nothing very abstract or complex about investing. everything can be described in plain language (if you want to).

Best wishes!
-----------------
Dear Kaktus, it's nice of you to write after so long, and your intuition is right: the money has done nothing but languish except for when I was losing $500/day. Some of the problems I ran into on this site were that 1) People "advising" me hadn't read my original post so they were just talking out of their hats, 2) as the thread got longer, people were writing without reading so I was repeating myself in an endless loop, 3) I had no way of evaluating the expertise of the people advising me, 4) if anything went wrong, nobody here would take any responsibility, and 5) even preliminary steps suggested to me didn't go anything like what I was told to expect. As you say, many people here are here for the "fun" of discussing all this, which is kind of inappropriate for my situation. NOTES --> The advisor has already been gone for five months. --> At my age, I should not be relying on stocks. --> It's not that I don't understand Bogle, it's that he didn't understand me. --> I don't have the temperament to care about "markets" or to want this consideration in my life. --> I am just now getting back to the amount I originally invested in August 2017, after all the $1000s I wasted on the advisor, and time and energy reading, calling, figuring, considering, asking, and so on. --> I am looking for the time to put all my money is good CDs for 12-18 months, at which time I will see if I have the heart to discuss money--a very personal matter--with strangers who might be simply posturing. I imagine I will try reading here about CDs.

Other parts of my experience here: Many people have been confused about how to use the site--even about replying, quoting, and so on. But the people running the site never reply or change anything. And while setting up access to an email account overseas, the page offered up my super-duper-safe username from this site. But I'd like to thank you very much for your kind message, Kaktus, and for sharing your own experience about how to "decide for yourself." I'm not ungrateful, and I look forward to having the time to read or post when I have more of a safety net or support network. Thank you again for thinking of me, and wishing you all the best.

Wenonah
Posts: 75
Joined: Sat Nov 24, 2012 1:30 pm

Re: How to Begin with 1M

Post by Wenonah » Fri Feb 08, 2019 7:31 pm

As someone who also asks a lot of questions before they make any moves, I, too, recognize paralysis by analysis. Call Vanguard Financial Advisory Services and get an appointment with an advisor and they will help you and ask you questions, but guide you. We went to a fee only financial advisor in our town and got little advice and then went to Vanguard and my husband said, "Why do I feel so much better after talking to Vanguard than the other guy?" Just call and you will be on your way. They will tell you how to transfer things, etc. 800-962-5209. Break a leg!

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Fri Feb 08, 2019 7:43 pm

Wenonah
Wenonah wrote:
Fri Feb 08, 2019 7:31 pm
As someone who also asks a lot of questions before they make any moves, I, too, recognize paralysis by analysis. Call Vanguard Financial Advisory Services and get an appointment with an advisor and they will help you and ask you questions, but guide you. We went to a fee only financial advisor in our town and got little advice and then went to Vanguard and my husband said, "Why do I feel so much better after talking to Vanguard than the other guy?" Just call and you will be on your way. They will tell you how to transfer things, etc. 800-962-5209. Break a leg!
----------------------
Wenonah, thank you for your nice note. You're sweet but I'm neither paralyzed nor over-analyzing. Really.

I did call Vanguard on the basis of advice I got here, and they said they didn't know why I'd gotten the referral I got, that they didn't do what I was told here they did. Including helping me transfer things. And their help was more expensive than Schwab's.

Of course it's good to know that so many people are being helped by all the helpful people here. I've just had iffy luck with it, but it's clearly making sense to many, many others. Good wishes to you and your husband.

typical.investor
Posts: 1223
Joined: Mon Jun 11, 2018 3:17 am

Re: How to Begin with 1M

Post by typical.investor » Fri Feb 08, 2019 8:48 pm

TylerLearning wrote:
Fri Feb 08, 2019 7:43 pm
Wenonah
Wenonah wrote:
Fri Feb 08, 2019 7:31 pm
As someone who also asks a lot of questions before they make any moves, I, too, recognize paralysis by analysis. Call Vanguard Financial Advisory Services and get an appointment with an advisor and they will help you and ask you questions, but guide you. We went to a fee only financial advisor in our town and got little advice and then went to Vanguard and my husband said, "Why do I feel so much better after talking to Vanguard than the other guy?" Just call and you will be on your way. They will tell you how to transfer things, etc. 800-962-5209. Break a leg!
----------------------
Wenonah, thank you for your nice note. You're sweet but I'm neither paralyzed nor over-analyzing. Really.

I did call Vanguard on the basis of advice I got here, and they said they didn't know why I'd gotten the referral I got, that they didn't do what I was told here they did. Including helping me transfer things. And their help was more expensive than Schwab's.

Of course it's good to know that so many people are being helped by all the helpful people here. I've just had iffy luck with it, but it's clearly making sense to many, many others. Good wishes to you and your husband.
Did you look into Schwab’s Intelligent portfolios or their Intelligent advisory.

Both are reasonable if you don’t want to do things yourself.

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Fri Feb 08, 2019 8:54 pm

typical.investor wrote:
Fri Feb 08, 2019 8:48 pm
TylerLearning wrote:
Fri Feb 08, 2019 7:43 pm
Wenonah
Wenonah wrote:
Fri Feb 08, 2019 7:31 pm
As someone who also asks a lot of questions before they make any moves, I, too, recognize paralysis by analysis. Call Vanguard Financial Advisory Services and get an appointment with an advisor and they will help you and ask you questions, but guide you. We went to a fee only financial advisor in our town and got little advice and then went to Vanguard and my husband said, "Why do I feel so much better after talking to Vanguard than the other guy?" Just call and you will be on your way. They will tell you how to transfer things, etc. 800-962-5209. Break a leg!
----------------------
Wenonah, thank you for your nice note. You're sweet but I'm neither paralyzed nor over-analyzing. Really.

I did call Vanguard on the basis of advice I got here, and they said they didn't know why I'd gotten the referral I got, that they didn't do what I was told here they did. Including helping me transfer things. And their help was more expensive than Schwab's.

Of course it's good to know that so many people are being helped by all the helpful people here. I've just had iffy luck with it, but it's clearly making sense to many, many others. Good wishes to you and your husband.
Did you look into Schwab’s Intelligent portfolios or their Intelligent advisory.

Both are reasonable if you don’t want to do things yourself.
Thank you for being in touch, of course.

Lafder
Posts: 3992
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: How to Begin with 1M

Post by Lafder » Fri Feb 08, 2019 10:24 pm

It sounds like you are a cautious investor and would prefer the safety of CDs to the higher growth/loss of more stocks and bonds.

Someone had posted long ago to consider Vanguards Life Strategy Conservative Growth. That may be a good possibility to hold some of your money in addition to CDs.

Vanguard's Life Strategy conservative growth is mutual fund made up of 40% stocks and 60 % bonds, so it is quite conservative and would add diversity to your holdings. It includes US and International stocks and bonds.

Another possibility would be Vanguard Target Retirement Income which is an all in one fund with 30% stock and a little more diverse in its holdings than the above.

I think some CDs is good to guarantee the value won't go down on some of your money. But over time, the interest rates seem unlikely to keep up with inflation. So I would at least consider some investments with potential for higher return if you can handle some years with drops.

I am sorry you were frustrated by the replies. You do have to sort out the ones that make sense to you as you learn more and more.

lafder

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 12:47 am

Lafder wrote:
Fri Feb 08, 2019 10:24 pm
It sounds like you are a cautious investor and would prefer the safety of CDs to the higher growth/loss of more stocks and bonds.

Someone had posted long ago to consider Vanguards Life Strategy Conservative Growth. That may be a good possibility to hold some of your money in addition to CDs.

Vanguard's Life Strategy conservative growth is mutual fund made up of 40% stocks and 60 % bonds, so it is quite conservative and would add diversity to your holdings. It includes US and International stocks and bonds.

Another possibility would be Vanguard Target Retirement Income which is an all in one fund with 30% stock and a little more diverse in its holdings than the above.

I think some CDs is good to guarantee the value won't go down on some of your money. But over time, the interest rates seem unlikely to keep up with inflation. So I would at least consider some investments with potential for higher return if you can handle some years with drops.

I am sorry you were frustrated by the replies. You do have to sort out the ones that make sense to you as you learn more and more.

lafder
Hello Lafder. Thank you for your considered replies. I keep hearing that I'm cautious and have a lot to learn. But when I started in August 2017, I had a very high threshold for risk and it's my reading that's raised the red flags.

Question: The people I've encountered who invest and used to say they were taking out 4%/year have, on closer inquiry, shifted to talking about 3%/year or less--that is, not "earning" so much as staying just ahead of projected inflation. The erstwhile "financial adviser" was earning me 2.58%. There are CDs with rates in this same 2.58-3% range. What is the advantage of maybe making that much by investing, instead of for-sure making that much in a CD? Thanks.

Another question: said advisor encouraged me in 2017 to take $30,000 out to cover home repairs. When the repairs were delayed, in 2018 he encouraged me to send it all back. Now I see that Schwab has made it look on my 2018 statements as if my investments earned this $30,000. Is that normal?

No, I'm too old to go for someone's promise of "potential" growth, and too old to handle years with drops.

"Vanguard Target Retirement funds are... designed to give you a good, but not guaranteed, investment outcome." Hmm. I try to imagine what kind of person would be eager to give their money to someone saying that.

Among my peers, nobody invests. Some never got interested; some tried it and quit after losing money. The appeal of investing isn't clear for many of us living far from conventional lives.

Thanks for your comments--they make a difference to me in my thinking.

Very best,

User avatar
alpine_boglehead
Posts: 359
Joined: Fri Feb 17, 2017 9:51 am
Location: Austria

Re: How to Begin with 1M

Post by alpine_boglehead » Sat Feb 09, 2019 1:46 am

Hi Tyler,

There's lots of ongoing (and past) posts on this forum by people like yourself who seek help and receive usually very thoughtful advice. Read these threads, you'll gain a perspective how others are doing, what options there are and how you can weigh these against each other.
TylerLearning wrote:
Sat Feb 09, 2019 12:47 am
"Vanguard Target Retirement funds are... designed to give you a good, but not guaranteed, investment outcome." Hmm. I try to imagine what kind of person would be eager to give their money to someone saying that.
This gets a bit philosophical, but (as in life in general) there's only so much guarantees and safety.

As soon as you move out CDs, things are not guaranteed. If you want higher return, you'll have to bear some risk. That's the fine print with all things financial, only that some people choose to make that very fine print. That higher return is what we are hoping/expecting to receive when investing in stock funds and bond funds, and also target funds (which hold both). The target date funds recommended earlier (e.g. 40/60 stocks/bonds) are rather on the safe side, but with some risk. Many here have accepted you can't entirely eliminate risk, even with CDs you only get a guaranteed nominal return, which can be eaten by inflation.

I'm from Europe, there's like 1% nominal return on CDs, which after taxes and inflation is -1.3% real. So here, putting money in a CD is a guaranteed risk - I'll be losing that money, each and every year (unless inflation is somehow lower, but the central bank is attempting to achieve an inflation target of 2%). In the US you're currently better off, but there's no guarantee that a zero-interest scenario won't show up for you (again).

All in all, educate yourself, make a good-enough plan you're comfortable with, and live a good life.

germark
Posts: 69
Joined: Thu Sep 06, 2018 2:18 pm

Re: How to Begin with 1M

Post by germark » Sat Feb 09, 2019 12:17 pm

TylerLearning wrote:
Sat Feb 09, 2019 12:47 am
Another question: said advisor encouraged me in 2017 to take $30,000 out to cover home repairs. When the repairs were delayed, in 2018 he encouraged me to send it all back. Now I see that Schwab has made it look on my 2018 statements as if my investments earned this $30,000. Is that normal?
It would depend on the details, but at first glance this seems appropriate to me. In 2017 did the same statement show a loss?

In general you'll get different types of statements. One will be a financial statement showing all flows of money into and out of your account. This will include all activity that occurred in your account. This statement can be difficult to read because it can easily get cluttered with dividends and capital gains and all the securities have abbreviated names. On that statement, it should be clear that there was a $30k deposit from an external source. Can you find it? Can you find the $30k transfer out in 2017?

Another type of report you will be a computer generated, contain graphs and tables, and generally try to give you a better understanding of the performance of your investments in your account. In this sense the $30k addition to your account was real, and so probably included there. If you find the 2017 statement, it probably shows a loss as well. Can you find it?

In short, I suspect that Schwab is simply accurately stating the activity in your account. They're relying on you to understand that there is non-investment activity that occurred that might be skewing the results. This same issue would occur at any financial institution: they have an obligation to report account activity.

Note that there are other ways to find out performance of specific assets in your account. For example, someone earlier recommended you look at Vanguard LifeStrategy Conservative Growth Fund (VSCGX). If you simply type the security symbol ("VSCGX") into google, a chart will appear. And all the links below the chart will provide additional details about that specific security.

More broadly: it seems unlikely that your advisor or institution would literally try to claim that a $30k transfer into your account was something else (such as a $30k increase in value of another security you hold). That's not the primary reason people here are against AUM advisors.

The reason people here are against AUM compensation structures are because it's a significant drag on performance returns. And if people learn enough to make their own investment decisions, then the service they provide generally becomes unnecessary.

Topic Author
TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 3:23 pm

alpine_boglehead wrote:
Sat Feb 09, 2019 1:46 am

Alpine, hello and thank you. I will skip over all the misunderstandings about my situation, how much I've hesitated, studied or understand, and so on. There are simply factors involved for me that aren't appropriate to discuss on a public forum.

But I'm curious about this that you took the time to send for me:

<<As soon as you move out CDs, things are not guaranteed. If you want higher return, you'll have to bear some risk. That's the fine print with all things financial, only that some people choose to make that very fine print. That higher return is what we are hoping/expecting to receive when investing in stock funds and bond funds, and also target funds (which hold both). The target date funds recommended earlier (e.g. 40/60 stocks/bonds) are rather on the safe side, but with some risk. Many here have accepted you can't entirely eliminate risk, even with CDs you only get a guaranteed nominal return, which can be eaten by inflation.>>>

But how does that go with the question I asked? I couldn't see that risky investments were actually earning more than the best CD rates. Can you? I wrote:

"Question: The people I've encountered who invest and used to say they were taking out 4%/year have, on closer inquiry, shifted to talking about 3%/year or less--that is, not "earning" so much as staying just ahead of projected inflation. The erstwhile "financial adviser" [long gone] was earning me 2.58%. There are CDs with rates in this same 2.58-3% range. What is the advantage of maybe making that much by investing, instead of for-sure making that much in a CD? Thanks."

You wrote:

<<So here, putting money in a CD is a guaranteed risk - I'll be losing that money, each and every year>>

Again, it sounds to me as if the actual return on investments is not different from the CD rates. What am I missing?

When I'm writing with people here, I always wonder what decade of their life they are in, whether they have support from family/friends, and what they would do if they lost the money they had invested. You?

Thank you again,

Mr.BB
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Re: How to Begin with 1M

Post by Mr.BB » Sat Feb 09, 2019 3:33 pm

Before you fire your advisor you need to have an exit plan. Collect all your paperwork/holdings and talk with a fee-based only advisor to put a plan together for you (probably about $2000-$2500), also talk with a Vanguard advisor as a comparison. Once you know the direction you want to go in then you can contact your current advisor with specific instructions on how to proceed.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Sandtrap
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Re: How to Begin with 1M

Post by Sandtrap » Sat Feb 09, 2019 3:47 pm

TylerLearning wrote:
Fri Feb 08, 2019 4:39 pm
Kaktus wrote:
Wed Jan 30, 2019 9:09 am
Hallo TylerLearning, I just browsed quickly through your travail.:) I got curious. It seems you are still not settled?

If this is all too overwhelming now I think as someone suggested that you should just leave it be and do some reading and discussing. To give a tip anything that John Bogle wrote. His books are very easily understandable technically also for an amateur like me. Also he never lost perspective on whats really important in life.
Or (what I would do) you call up Scwhab now and ask them how to disconnect your financial advisor, and ask how to get the dividends from your stocks transferred to your bank account. As long as I had stocks, I would use the dividends to live on. When that is done you can leave your investments as they are until you feel you know what to do.
I think that charge byyour "advisor" is costing you money for nothing. To all probability an advisor gambling with someone elses money and charging a fee for it will not beat the market over say ten years. This is proven again and again by Bogle in his books and many scholars. It can happen in a year. It can even happen in two. And those years he will tell you alot about it.:) Others here can give better and more advice than I can. Many people here who think its fun to discuss investing so just fire away.

I think that no one reacted to how much is possible to spend without running out? To give my view my rule of thumb is 3 percent (I am younger). This means that it is extremely probable that I will not run out of money if I don't sell more than 3 percent per year of my stocks value (3 percent of the market value the year I start to withdraw). Say that you have 500.000 worth of stocks to start with. 3 percent of that is 15.000. So I should not withrdraw more than 15.000 per year. As one more safety feature, I have some money in a bank account. So if it is a really bad year in the stock market I will take money from the bank account instead. If you can avoid to sell stocks in a really bad year for stocks it makes a great difference. As I want to be able to decide for myself if I should take money from my stocks or from bonds or from bank account I personally don't like the fonds that are mixing diffeent assets. But each to his own and I am Swedish and so not familiar with your tax system.

It seems you feel one must be very savvy to manage stocks and funds. But it really is not more difficult than using a regular bank account. If your advisor cannot explain it so that you can easily understand everything it is his fault and not yours. There is nothing very abstract or complex about investing. everything can be described in plain language (if you want to).

Best wishes!
-----------------
Dear Kaktus, it's nice of you to write after so long, and your intuition is right: the money has done nothing but languish except for when I was losing $500/day. Some of the problems I ran into on this site were that 1) People "advising" me hadn't read my original post so they were just talking out of their hats, 2) as the thread got longer, people were writing without reading so I was repeating myself in an endless loop, 3) I had no way of evaluating the expertise of the people advising me, 4) if anything went wrong, nobody here would take any responsibility, and 5) even preliminary steps suggested to me didn't go anything like what I was told to expect. As you say, many people here are here for the "fun" of discussing all this, which is kind of inappropriate for my situation. NOTES --> The advisor has already been gone for five months. --> At my age, I should not be relying on stocks. --> It's not that I don't understand Bogle, it's that he didn't understand me. --> I don't have the temperament to care about "markets" or to want this consideration in my life. --> I am just now getting back to the amount I originally invested in August 2017, after all the $1000s I wasted on the advisor, and time and energy reading, calling, figuring, considering, asking, and so on. --> I am looking for the time to put all my money is good CDs for 12-18 months, at which time I will see if I have the heart to discuss money--a very personal matter--with strangers who might be simply posturing. I imagine I will try reading here about CDs.

Other parts of my experience here: Many people have been confused about how to use the site--even about replying, quoting, and so on. But the people running the site never reply or change anything. And while setting up access to an email account overseas, the page offered up my super-duper-safe username from this site. But I'd like to thank you very much for your kind message, Kaktus, and for sharing your own experience about how to "decide for yourself." I'm not ungrateful, and I look forward to having the time to read or post when I have more of a safety net or support network. Thank you again for thinking of me, and wishing you all the best.
The way to negate this is to post a new post requesting a "Portfolio Review" in the appropriate format.
I believe this has been suggested earlier.
https://www.bogleheads.org/wiki/Asking_ ... _questions
You will have few responses from the senior experienced portfolio advisers without this format.
Why?
Because:
1
The format itself is designed so that many questions will be answered in gathering and organizing one's financial data.
2
Rather than a narrative, the "portfolio review format" is easier to scan and evaluate for forum responses.
3
The forum is designed to encourage actionable content/responses in a comprehensive long term financial strategy while encouraging and providing financial reading, information, and resources as required per each individuals situation.
4
When a thread seeking actionable input is more narrative oriented, input tends to get scattered because it is based on the limited information/data given, and, again, lacks the data based "Porfolio Review" format which has less room for interpretation.

You are correct that as a thread goes out to 3 pages, many might respond without reading the entire thread for additional information you might have given or have given in response to quieries/dialogue. Thus #1-4.

As far as privacy concerns, leave out any specific data or generalize within your comfort zone. IE: (age) (30's) (earning years), etc.
Good luck in your efforts.
j

Edit:
Eggads. I just noticed this thread dates back to August 2018.

:oops:
Please disregard if no longer applicable.
Last edited by Sandtrap on Sat Feb 09, 2019 6:48 pm, edited 1 time in total.
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CurlyDave
Posts: 1311
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Re: How to Begin with 1M

Post by CurlyDave » Sat Feb 09, 2019 3:59 pm

RickBoglehead wrote:
Sun Aug 19, 2018 3:27 pm
It's sad that you're hiding money from your advisor in a low interest account. I've read many posts like yours where people say "how do I fire my advisor"?

Send an email:

Dear Fred:

Your services are no longer needed. Please get Schwab to remove your trading authority from my account today.

Thanks,

Wiser than I was a year ago
I think you need to expand this just a little bit:

Dear Fred:

Your services are no longer needed. Please get Schwab to remove your trading authority from my account today. Also immediately stop charging any AUM fees.

Thanks,


It is also worthwhile to do a little research to find the "compliance officer" at the branch where you account is located and copy him on the email. This will prevent the situation where "Fred's" copy is somehow lost.

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alpine_boglehead
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Re: How to Begin with 1M

Post by alpine_boglehead » Sat Feb 09, 2019 4:27 pm

TylerLearning wrote:
Sat Feb 09, 2019 3:23 pm
alpine_boglehead wrote:
Sat Feb 09, 2019 1:46 am

Alpine, hello and thank you. I will skip over all the misunderstandings about my situation, how much I've hesitated, studied or understand, and so on. There are simply factors involved for me that aren't appropriate to discuss on a public forum.

But I'm curious about this that you took the time to send for me:

<<As soon as you move out CDs, things are not guaranteed. If you want higher return, you'll have to bear some risk. That's the fine print with all things financial, only that some people choose to make that very fine print. That higher return is what we are hoping/expecting to receive when investing in stock funds and bond funds, and also target funds (which hold both). The target date funds recommended earlier (e.g. 40/60 stocks/bonds) are rather on the safe side, but with some risk. Many here have accepted you can't entirely eliminate risk, even with CDs you only get a guaranteed nominal return, which can be eaten by inflation.>>>

But how does that go with the question I asked? I couldn't see that risky investments were actually earning more than the best CD rates. Can you? I wrote:

"Question: The people I've encountered who invest and used to say they were taking out 4%/year have, on closer inquiry, shifted to talking about 3%/year or less--that is, not "earning" so much as staying just ahead of projected inflation. The erstwhile "financial adviser" [long gone] was earning me 2.58%. There are CDs with rates in this same 2.58-3% range. What is the advantage of maybe making that much by investing, instead of for-sure making that much in a CD? Thanks."

You wrote:

<<So here, putting money in a CD is a guaranteed risk - I'll be losing that money, each and every year>>

Again, it sounds to me as if the actual return on investments is not different from the CD rates. What am I missing?

When I'm writing with people here, I always wonder what decade of their life they are in, whether they have support from family/friends, and what they would do if they lost the money they had invested. You?

Thank you again,
Hi Tyler,

there's nothing wrong with CDs (I also own some myself). In some cases (when you shop for the best CDs) you'll find ones that yield more than treasuries of the same duration (e.g. 2 year treasuries now have 2.5% yield), and the safety (up to the 100k FDIC insured amount) should be them same.

It depends what you define as "risky" investments. Investing in the S&P 500 has returned like 14% per year over the last 10 years. That's an arbitrary time range of course, the risky part is obviously that now that it's 2019, directly before these 10 years lies a loss of 40%. So yes, stocks are risky. Treasury notes/bonds are quite safe, investment-grade bonds, less, but still quite safe. If you can find better alternatives (like insured CDs), go for it.

I'm part of the crowd that thinks that diversification is useful, so from my perspective a portfolio with a small portion of bonds (like 20% in the more conservative target date funds) is actually safer (because it spreads across more asset classes) even though it actually includes a helping of (in the short term) more risky assets, that is stocks. And, theoretically, it should also give you improved return.

I've also lost invested money (it was a considerable sum for me) due to being too gullible towards my back-then advisor, who put me in a Bernie Madoff-fed fund in 2007. After 10 years, I finally might get back some of it all goes well. What I did was grind my teeth at the loss, get a grip on my finances, let go of the advisor, and earn new money.

My background is subject to the same restriction as yours. Everyone's different, only you know what situation you're in and what is your "sleep well" portfolio. If an all-CD portfolio is the right one for you - that's ok. An often-quoted heuristic goes that one should invest according to one's ability, willingness and need to take risk. When you have no need to take risk (e.g. because you're 62 and have enough money), then there's no need to trade safety for potential higher return. I also feel with you and understand your fear of losing hard-earned and needed money, so part of my portfolio is invested as conservatively and safely as humanly possible. But part of me also thinks about diversification - who knows whether the EU as it is now and the tiny speck on the map that's my home country will exist 20 years down the line. Who knows if inflation won't pick up and wipe out a part of my safe assets. And part also thinks about the opportunity that lies in investing in more risky asset classes like stocks. But that's only my take on it. In general - take all advice (especially from advisors with a profit motive :D , but also from strangers on the internet, like me) with a grain of salt.

All the best.

Topic Author
TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 4:31 pm

Germark, hello.

1.
I have and can read all statements--for me, this in your reply was the core of the matter:
germark wrote:
Sat Feb 09, 2019 12:17 pm
They're relying on you to understand that there is non-investment activity that occurred that might be skewing the results.
Calling Schwab three times I still had no one say: the results are skewed and we expect you to accept that.

2.
Supposedly authoritative information is like this--two statements exactly opposite within a few months:

Investopedia

(Bonds are riskier)
Dec 18, 2018 - ... "when interest rates rise, bonds may become more of a gamble... In short, there's a high probability of not getting back some or all of your investment in a bond when rates rise."

(CDs are riskier)
Oct. 3, 2018
"Federal savings bonds are regarded as the least-risky debt instruments... the risk of investing in a savings bond [is] lower than the risk of investing in a CD."

Nonsensical!

3.
Yes, I fired my advisor last summer on advice from here. Yes, the VSCGX was good advice, but when I called Vanguard, what happened was not what was described to me, and the Schwab equivalent has been hard to get to with terrible customer service and other obstacles.

4.
Question: I had advice to keep $100,000 in emergency money. After that, dividing money between CDs and 60/40 investments, what percentage should go where? With no other income for the last 20 or 30 years of life.

Thank you for your time and perspective.

Topic Author
TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 4:42 pm

CurlyDave wrote:
Sat Feb 09, 2019 3:59 pm
Dear Fred:
Your services are no longer needed. Please get Schwab to remove your trading authority from my account today. Also immediately stop charging any AUM fees.
Thanks,

It is also worthwhile to do a little research to find the "compliance officer" at the branch where you account is located and copy him on the email. This will prevent the situation where "Fred's" copy is somehow lost.
CurlyDave, thank you for giving your time to my situation. In fact, on advice from here, I fired my advisor last August.

Best,

Topic Author
TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 6:57 pm

Alpine, hello,
there's nothing wrong with CDs (I also own some myself). In some cases (when you shop for the best CDs) you'll find ones that yield more than treasuries of the same duration (e.g. 2 year treasuries now have 2.5% yield), and the safety (up to the 100k FDIC insured amount) should be them same. ...If you can find better alternatives (like insured CDs), go for it.

Well, Ally Bank is the one recommended to me here. An 18-month CD is 2.70% and insured up to $250,000.

Here I send my regrets: I wrote a long message here and seem to have deleted it by mistake. Sigh. Of course I thanked you, looked forward to reviewing what you sent me, and wished you, the EU, and your small country all the very best.

Topic Author
TylerLearning
Posts: 79
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Re: How to Begin with 1M

Post by TylerLearning » Sat Feb 09, 2019 7:08 pm

Sandtrap, hello,

[/quote]
The way to negate this is to post a new post requesting a "Portfolio Review" in the appropriate format.
I believe this has been suggested earlier.
https://www.bogleheads.org/wiki/Asking_ ... _questions
You will have few responses from the senior experienced portfolio advisers without this format.
Why?
Because:
...
2
Rather than a narrative, the "portfolio review format" is easier to scan and evaluate for forum responses....
...
As far as privacy concerns, leave out any specific data or generalize within your comfort zone. IE: (age) (30's) (earning years), etc.
Good luck in your efforts.
j

Edit:
Eggads. I just noticed this thread dates back to August 2018.

:oops:
Please disregard if no longer applicable.
[/quote]

Thank you for your message. Indeed, I had not been or planned to be on the forum here at this time. A nice person called "Kaktus" came across my old posts and wrote out of the blue. My "narrative" was simply to tell her the reasons I had stopped posting. To my surprise, other helpful posts have followed. Best,

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calmaniac
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Re: How to Begin with 1M

Post by calmaniac » Sat Feb 09, 2019 10:33 pm

TylerLearning wrote:
Sun Aug 19, 2018 3:00 pm

What I expect
....
About $1060 at 66-1/2 from Social Security.

I am sorry for your loss.

Strongly suggest waiting until age 70 to take Social Security. For every year deferring after full retirement age you get an additional 8% monthly. By age 70, that's $1,357 per month by my calculations. You note longevity in your family. The usual break-even point is around age 82. You have enough money to keep you afloat until Social Security kicks in.

Kaktus
Posts: 73
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Re: How to Begin with 1M

Post by Kaktus » Mon Feb 11, 2019 10:47 am

Hello TylerLearning,
Sorry to hear you seem so frustrated still. It seems you are getting so much bits and pieces of suggestions it gets confusing. I shouldn add to that.

Absolutely most people in your situation will end upp with a mix of equity funds (stocks), bond funds (or CDs, which option matters very little to my mind) and some for buffer in bank account. How your capital will develop in total will depend on your allocation between these assets and how much you pay for managing it. You should realize that the difference in outcome between the suggestions you get here is very small.
If you want more holistic advice here at Bogleheads I think you need to post for a Portfolio review as recently suggested by Sandtrap.

Best wishes

Topic Author
TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Tue Feb 26, 2019 8:23 pm

calmaniac wrote:
Sat Feb 09, 2019 10:33 pm
TylerLearning wrote:
Sun Aug 19, 2018 3:00 pm

What I expect
....
About $1060 at 66-1/2 from Social Security.

I am sorry for your loss.

Strongly suggest waiting until age 70 to take Social Security. For every year deferring after full retirement age you get an additional 8% monthly. By age 70, that's $1,357 per month by my calculations. You note longevity in your family. The usual break-even point is around age 82. You have enough money to keep you afloat until Social Security kicks in.
Hello Calmaniac, thanks for your note. I have always mostly been self-employed and wasn't planning to retire. My Social Security will never be much because most of my salaried positions were overseas, so I will always need to work to supplement the amount coming to me. I'm going to hang onto your note to refer back to it. Thanks for the condolences. Best,

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Randtor
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Re: How to Begin with 1M

Post by Randtor » Wed Feb 27, 2019 1:11 am

Hi Tylerlearning,
I know this is a long thread over a long time, but I did notice you are still responding so let me relate to you my recent experience. I'll try and keep it short.....
I had 90% of my portfolio with Ameriprise, and unhappy for years but afraid to make a move. Didn't realize how much I was paying in fees as I am an investment dumb dumb. Long history of some good, mostly bad investments. Also had about 10% with Fidelity, 100% in 5-6 individual stocks held long term and doing well.
After discovering this forum and reading late into the night, I decided to post my portfolio and got good advice. Here's what I did, and believe me it is a very simple (for the most part) process:
1. I called Vanguard, explained I wanted to open an account and move my portfolio over. They assigned me a manager. He in turn assigned me a 'transfer specialist", and an Advisor. Appointment was set up with the both.
2. Shortly thereafter I talked with the transfer specialist who started the process of bringing my holdings over to Vanguard. She held my hand (over the phone!) and walked me through the process.Some paperwork (digitally and some in paper form) was done, and transfers were initiated.... 7-10 business days to complete. There were a few hiccups but overall an easy peasy process.
3. First appt with the advisor he asked questions, was very friendly and got a sense of what I was comfortable with for investing. Again, nothing major, just gauging my personality so he could decide what my risk tolerances were - in general.
4. Next appt he had set up a plan of funds to invest in once my $$ were transferred over. All were suggestions based on his feelings about what he thought was best for me, and with my input.
5. Funds are still transferring, and once that occurs we will have another meeting and start transitioning me over from my present holdings (Stocks, bonds, stock and bond funds, mutual funds and an annuity or two!) to vanguard index funds. He will take care of making the moves from about 50 funds that I had previously (talk about a complicated portfolio.. and very profitable for my previous advisor!) to potentially 3-6 funds overall.

When I left my previous advisor, I sent her an email, thanked her for her services and said I decided to self direct my portfolio. She has been gracious and helped me settle some holdings that VG couldn't transfer. All contact with her has been emails so non confrontational.

All in all a pretty smooth painless move, and one that will save me money from fees, thereby earning me more over the years that my money will be working for me instead of her AND me. I am going to pay the .3% at Vanguard for an Advisor for a year, just to help me get everything in order. Once it is done, I will have very little to advise on (except rebalancing 1-2 times a year, which I think I can do on my own), so I anticipate no longer needing the advisory service and will opt out of it. Even so, the money I'm saving in the first year alone will pay for the advisory service with plenty still left over. Yes there are fees associated with each account being moved (Ameriprise charges) but I am sure the move will save me a lot more than the cost of the move.

The big thing is, don't hesitate out of fear. You are only going to make it better for yourself in the long run, and the sooner the better. I will be 68 in a few weeks. I only wish I had found this forum 3 decades ago, but it's never too late.

HTH, good luck!
"Whats done is done, and can't be undone"

retiredwrench
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Re: How to Begin with 1M

Post by retiredwrench » Wed Feb 27, 2019 3:09 pm

Hi TylerLearning, just happened upon this thread today. I have read your past posts on worrying about losing your money or control of your money. That is the beauty of Vanguard. You are the boss! Once you establish a basic portfolio you can tweak and modify it as your knowledge increases or your life situation changes! My wife passed about 3 years ago. She was the boss of the money, I trusted her. So in a similar fashion I was in an overwhelmed mode. After 3 years I am pretty confident of my financial decisions and actions. The people on this forum are an invaluable resource. We have been blessed with wealth, knowledge and freedom from making our own smart wealth choices. I was lucky enough to have the Bogle head philosophy inbedded in me for 20 years by way of my father in law. When I had the Edward Jones guy calling, showing up at my front door and taking me out to lunch I knew how valuable it was for me to keep keep his cut for myself. Also if you have any local Boglehead meetings, great learning resource, you dont have to say a word, just listen. It will get easier, the grief and the finances. God Bless

WhiteMaxima
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Re: How to Begin with 1M

Post by WhiteMaxima » Wed Feb 27, 2019 4:12 pm

You don't need an advisor. Just use Vanguard and buy 1M of Total world stock indexed fund or ETF.

Topic Author
TylerLearning
Posts: 79
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Re: How to Begin with 1M

Post by TylerLearning » Mon Mar 04, 2019 4:32 pm

Randtor wrote:
Wed Feb 27, 2019 1:11 am
"Hi Tylerlearning,
I know this is a long thread over a long time, but I did notice you are still responding so let me relate to you my recent experience.
...
1. I called Vanguard, explained I wanted to open an account and move my portfolio over. They assigned me a manager. He in turn assigned me a 'transfer specialist", and an Advisor. Appointment was set up with the both.

All in all a pretty smooth painless move, and one that will save me money from fees, thereby earning me more over the years that my money will be working for me instead of her AND me. I am going to pay the .3% at Vanguard for an Advisor for a year, just to help me get everything in order. Once it is done, I will have very little to advise on (except rebalancing 1-2 times a year, which I think I can do on my own), so I anticipate no longer needing the advisory service and will opt out of it. Even so, the money I'm saving in the first year alone will pay for the advisory service with plenty still left over. Yes there are fees associated with each account being moved (Ameriprise charges) but I am sure the move will save me a lot more than the cost of the move.

The big thing is, don't hesitate out of fear. You are only going to make it better for yourself in the long run, and the sooner the better."

---------------------
MY REPLY

Randtor, hello and thanks for sharing your thoughts. On advice from here, I tried what you did at Vanguard and had a poor experience. I'm still stuck at Schwab, where the customer service is also poor.

Thanks about your Advisor plan--sounds worth thinking about. And your notes about balancing savings and costs are wise. Not hesitating--well, also good to consider.

Just to say thanks.

"TL"

Topic Author
TylerLearning
Posts: 79
Joined: Wed Jul 11, 2018 11:41 pm

Re: How to Begin with 1M

Post by TylerLearning » Mon Mar 04, 2019 4:39 pm

WhiteMaxima wrote:
Wed Feb 27, 2019 4:12 pm
You don't need an advisor. Just use Vanguard and buy 1M of Total world stock indexed fund or ETF.
Oh, White Maxima. The thread is so long. On advice from here, I left my advisor already last August. First attempt to move from Schwab to Vanguard was a bust. Thanks, "TL"

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TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Mon Mar 04, 2019 4:43 pm

retiredwrench wrote:
Wed Feb 27, 2019 3:09 pm
Hi TylerLearning, just happened upon this thread today. I have read your past posts on worrying about losing your money or control of your money. That is the beauty of Vanguard. You are the boss! Once you establish a basic portfolio you can tweak and modify it as your knowledge increases or your life situation changes! My wife passed about 3 years ago. She was the boss of the money, I trusted her. So in a similar fashion I was in an overwhelmed mode. After 3 years I am pretty confident of my financial decisions and actions. The people on this forum are an invaluable resource. We have been blessed with wealth, knowledge and freedom from making our own smart wealth choices. I was lucky enough to have the Bogle head philosophy inbedded in me for 20 years by way of my father in law. When I had the Edward Jones guy calling, showing up at my front door and taking me out to lunch I knew how valuable it was for me to keep keep his cut for myself. Also if you have any local Boglehead meetings, great learning resource, you dont have to say a word, just listen. It will get easier, the grief and the finances. God Bless
Thanks for your kind message. All points taken, truly. - "TL"

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BlueSkies
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Re: How to Begin with 1M

Post by BlueSkies » Mon Mar 04, 2019 4:51 pm

Rantandtor,

You wrote:
The big thing is, don't hesitate out of fear. You are only going to make it better for yourself in the long run, and the sooner the better. I will be 68 in a few weeks. I only wish I had found this forum 3 decades ago, but it's never too late.


I agree. Late bloomer myself re investments.
Vanguard has been quite easy for me , but wherever an investor goes, good to get low fees.
I seek to help novice investors do this with my blog . https://grandmasinvestingforbeginners.b ... ey-begins/
Glad you are on a good track.

Grandma Sylvia

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TylerLearning
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Re: How to Begin with 1M

Post by TylerLearning » Tue Mar 05, 2019 2:27 pm

WhiteMaxima wrote:
Wed Feb 27, 2019 4:12 pm
Just use Vanguard and buy 1M of Total world stock indexed fund or ETF.
White Maxima, thinking back over what you advised. I can't put your idea to invest 100% of my money together with the rule of thumb I read everywhere that I should be investing 10% of my money and putting the rest in savings of one kind or another. On this site, I've also been told to invest 90% and save 10%. Can you say what you're thinking? (Note that, as I've said many times, I am at Schwab.)

Frankly, I've been astonished by the casual way people here describe handling their money when there is no other money or family to rely on. I don't personally know anyone who invests--except for the very rich--or certainly who invests their entire worldly holdings.

Eager to hear your perspective, thanks. "TL"

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Re: How to Begin with 1M

Post by 3-20Characters » Tue Mar 05, 2019 4:07 pm

TylerLearning wrote:
Sat Feb 09, 2019 12:47 am
Lafder wrote:
Fri Feb 08, 2019 10:24 pm
It sounds like you are a cautious investor and would prefer the safety of CDs to the higher growth/loss of more stocks and bonds.

Someone had posted long ago to consider Vanguards Life Strategy Conservative Growth. That may be a good possibility to hold some of your money in addition to CDs.

Vanguard's Life Strategy conservative growth is mutual fund made up of 40% stocks and 60 % bonds, so it is quite conservative and would add diversity to your holdings. It includes US and International stocks and bonds.

Another possibility would be Vanguard Target Retirement Income which is an all in one fund with 30% stock and a little more diverse in its holdings than the above.

I think some CDs is good to guarantee the value won't go down on some of your money. But over time, the interest rates seem unlikely to keep up with inflation. So I would at least consider some investments with potential for higher return if you can handle some years with drops.

I am sorry you were frustrated by the replies. You do have to sort out the ones that make sense to you as you learn more and more.

lafder
Hello Lafder. Thank you for your considered replies. I keep hearing that I'm cautious and have a lot to learn. But when I started in August 2017, I had a very high threshold for risk and it's my reading that's raised the red flags.

Question: The people I've encountered who invest and used to say they were taking out 4%/year have, on closer inquiry, shifted to talking about 3%/year or less--that is, not "earning" so much as staying just ahead of projected inflation. The erstwhile "financial adviser" was earning me 2.58%. There are CDs with rates in this same 2.58-3% range. What is the advantage of maybe making that much by investing, instead of for-sure making that much in a CD? Thanks.
CDs or financial advisors that return somewhere near 3% will not guarantee a 3% real return due to inflation. It’s closer to 0-1% return, depending on future rate of inflation. The 4% (or 3%) safe withdrawals discussed here are predicated on real returns.

Another question: said advisor encouraged me in 2017 to take $30,000 out to cover home repairs. When the repairs were delayed, in 2018 he encouraged me to send it all back. Now I see that Schwab has made it look on my 2018 statements as if my investments earned this $30,000. Is that normal?

No, I'm too old to go for someone's promise of "potential" growth, and too old to handle years with drops.
This makes you a very conservative investor. If you cannot handle seeing any loss at all to portfolio, you are at high risk of falling victim to inflation over the years. It is considered SOP for the most risk averse investor who needs growth to have a minimum of 20-30% in stocks. That is why Vanguard’s most conservative target retirement income fund holds 30%. And that’s at the very last stage of investing which kicks in 7 years years after the retirement date (going from memory here). This is not unique to vanguard. These are time honored investing principles. You may read up on them if you wish, accept them at face value as best practices, or simply ignore them. Your choice.

Btw, ironically, the investor who can afford to ignore this is the one who holds lots of $$$. Say you had a pile of money and could afford to live comfortably off just ~2% withdrawals. You could put it all in TIPS to guard against inflation and not risk a drop in principal. But for mere mortals that need every bit of 4% or so, this is not an option. With a low SS payout and no pension, your portfolio needs to do the heavy lifting for your long term retirement income.


"Vanguard Target Retirement funds are... designed to give you a good, but not guaranteed, investment outcome." Hmm. I try to imagine what kind of person would be eager to give their money to someone saying that.
See above.

Among my peers, nobody invests. Some never got interested; some tried it and quit after losing money. The appeal of investing isn't clear for many of us living far from conventional lives.
You have here in this forum, some of the best advice available anywhere. When you smooth out the inconsistencies (such as someone telling you to put it all in 100% stocks, or put it all in a savings account, etc), you will see that many of the comments mirror a very cosistent pattern. That pattern includes one of Jack Bogle’s saying, “invest, we must.” Another often advised step is to segregate large sums of money that will be needed soon into cash like instruments to protect them from sudden market decline (eg., a home down payment). Still another is to invest the rest of your portfolio in passive funds at an allocation that lets you sleep at night. Lastly, to do all this with minimal fees. Unlike market returns, fees are where we have control/choices.

Thanks for your comments--they make a difference to me in my thinking.

Very best,

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