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> Paying an expert for advice appeals to me just because I have no confidence that I'm not taking something important into account. I've got good news and bad

> Paying an expert for advice appeals to me just because I have no confidence that I'm not taking something important into account. I've got good news and bad news for you. The good news is that you're not as clueless as you think. The bad news is that person you're paying to give you advice? They also don't have a clue, but it's their job to make you feel like they do. Anecdotal evidence: 12 years of investing with Edward Jones in various mutual funds (2005-2017), and I would have made waaaay more money if I'd just bought ETFs to begin with. Sure, a financial advisor is comforting to talk to, but the fees they charge are murder on your long-term return, and in the end they're just paid to spend all day reading strategy papers which at best will give them the same return as a cat picking stocks. [0] [0] http://www.businessinsider.com/cat-beats-professional-stock-traders-2013-1?IR=T http://www.businessinsider.com/cat-beats-professional-stock-...

logfromblammo 9y ago
All available evidence points to x% of financial advisors being no better at picking investments than those they are advising, and the remaining (small) fraction capturing all the additional value they provide, and then some, via their fees. So either your advisor is good, and you pay them more than they are worth, or your advisor is bad, and you still pay them more than they are worth. You cannot create more (dollar-denominated) value for yourself by engaging a financial advisor. You aren't missing anything. You need extraordinary skills, contacts, or crimes to beat the market, and if you had what it took, you'd already be in the financial industry. So just buy the index funds and hold them in a non-margin account, year after year, until you can live for a year on 3% of your accumulated principal. That's all the investments advising you and everyone else in the 99% will ever need.
- criddell 9y ago
  So, say I had $1 million in my retirement account at age 67 (I have maybe 1/2 that today). I could use $30k of that each year on top of my social security benefits, correct? Seems like I will want about twice that. Maybe $2 million saved so I can have $60k / year and I don't think that's going to happen. Shit.
  - logfromblammo 9y ago
    The prevailing advice for a long time was 4%, but bond yields have been so low for so long, that people have been questioning whether 4% is truly safe any more. If you're retiring at 67, 4% is probably safe. $1.5M would be an acceptable target for you at that age.
    - criddell 9y ago
      Thanks for taking the time to write all this. I'm going to dig into this some more (I really dread it) but I'm guessing I need to save another $500k or so over the next twenty years. Not impossible but not painless either. I'm glad I started college savings accounts for my kids when they were born. They should each have $75-100k in them by the time they need it. Not enough, but it's a start.

logfromblammo 9y ago

All available evidence points to x% of financial advisors being no better at picking investments than those they are advising, and the remaining (small) fraction capturing all the additional value they provide, and then some, via their fees. So either your advisor is good, and you pay them more than they are worth, or your advisor is bad, and you still pay them more than they are worth. You cannot create more (dollar-denominated) value for yourself by engaging a financial advisor. You aren't missing anything. You need extraordinary skills, contacts, or crimes to beat the market, and if you had what it took, you'd already be in the financial industry. So just buy the index funds and hold them in a non-margin account, year after year, until you can live for a year on 3% of your accumulated principal. That's all the investments advising you and everyone else in the 99% will ever need.

criddell 9y ago
So, say I had $1 million in my retirement account at age 67 (I have maybe 1/2 that today). I could use $30k of that each year on top of my social security benefits, correct? Seems like I will want about twice that. Maybe $2 million saved so I can have $60k / year and I don't think that's going to happen. Shit.
- logfromblammo 9y ago
  The prevailing advice for a long time was 4%, but bond yields have been so low for so long, that people have been questioning whether 4% is truly safe any more. If you're retiring at 67, 4% is probably safe. $1.5M would be an acceptable target for you at that age.
  - criddell 9y ago
    Thanks for taking the time to write all this. I'm going to dig into this some more (I really dread it) but I'm guessing I need to save another $500k or so over the next twenty years. Not impossible but not painless either. I'm glad I started college savings accounts for my kids when they were born. They should each have $75-100k in them by the time they need it. Not enough, but it's a start.