Done being an employee (by choice)

[Ashful]

Compare your financial advisors performance, net of fees, to the closest asset allocation set forth in Vanguard's series of Life strategy funds (they all use index funds and rebalance using cash flows). Better yet, ask them to do it and watch their reaction.

I was speaking specifically to those intimidated or uninterested in going their own way, it is better to invest than not, no matter the mechanism used to get there. Personally (as of October), we have 45% of our liquid assets, 28% of our retirement assets, and 76% of our trusts (from us to children) under one advisor. There are two other advisors that have 13% of our retirement and 5% of our liquid assets, respectively. The rest we all DIY through 401k's, IRA's, cash, and Fidelity and Vanguard brokerage accounts... but even those 401k assets are mixed between managed and index funds.

And yes, I am well aware that many managed funds underperform after fees, in comparison to index funds, and specifically targeted retirement funds, and this can be most noticeable on smaller portfolios. But I have made the comparison between the performance of our primary wealth management account and the Vanguard strategy funds, and found we are doing better where we are now, by very substantial margin over the last 20 years. Moreover, by putting the majority of our assets with one manager, they assist us with tax positioning and management of several trusts that have been created to move money to our children, with minimal overall tax penalty. There are several reasons to use a wealth management advisor, on the assumption they can at least break even with targeted index funds.

 

[peakbagger]

For me Vanguard PFS is worth what I pay for it, 0.3% which is far less than a typical advisor (usually 1% and many are getting commissions on top of it). I have several different types of investment accounts, Roths, inherited Roths, IRAs, Equities and Rowe Price fund, HSA (Vanguard but held by third party) and a few others. They only manage the Vanguard funds in my accounts, but they factor in the outside funds and if I ask they make recommendations on the non Vanguard funds. so that the entire portfolio is balanced. I used to manage it myself but where I was lacking and what pays for PFS is optimizing for the most tax efficient and when I need cash offsetting the gains with the losses. The game for me now is to minimize taxes while using their various financial models to figure out when the make the withdrawals from what accounts. The other thing I see is the depth of diversification. It is not just stock based mutual funds and bond funds, its various term, domestic and international funds. There are zero commissions when the funds trade inside Vanguard. No front end or rear end load. Folks can and do worse.

I have always been a long term investor, I have known and worked with many folks who always let me know when they are up but they usually dont say much during a market slump. I have rode through several market slumps almost exclusively with Vanguard mutual funds and have always come out ahead in the long run. When I used to look for funds, I ignored the 1 and 5 year performance and looked at the ten.

My assumption is that you probably havent talked to Vanguard PFS as it sounds like you think they are a conventional financial advisor. The vast majority of investments are Vanguard Index funds so I do not think it violates Bogel's basic tenants. They always have offered a few actively advised funds like Wellington and Primecap. Not sure if it was you but someone made the statement that unlike Vanguard they are owned by someone, not sure how he got that impression, but my advisor is paid a salary, no commissions and he works for a separate entity but its owned by Vanguard which is a mutual company (no shareholders, account holder are the owners).

My dad used to manage his own investments and founded several investment clubs. He was in Vanguard long before most people had heard of them and was a fan of Bogle long before the Bogelheads existed. That was his hobby and he was darn good at it. He was conservative but still managed to do quite well year to year decade to decade. I did manage his investments for a few years after he moved into assisted living but I just didnt have the time and the interest to do so after he and my mom passed so I made the right decision for me. I have several friends that should be in Vanguard, but they believe the crap their advisor with other firms tells them as the advisors are great salesman. Look at a typical Edwards Jones advisor, they are hired on personality and salesmanship ability, financial background is optional as they are fed a script to feed to the customers. I see their columns in various papers with local advisors' photo and name but there is always a disclaimer that the article was written by Edwards Jones and supplied to the local advisor.

My advisor at Vanguard is a fiduciary and he never tries to sell me anything, most of the discussion is what they are doing to the portfolio to rebalance it to the goals I set and then how to do it tax efficiently.

 

[Ashful]

My assumption is that you probably havent talked to Vanguard PFS as it sounds like you think they are a conventional financial advisor. The vast majority of investments are Vanguard Index funds so I do not think it violates Bogel's basic tenants. They always have offered a few actively advised funds like Wellington and Primecap. Not sure if it was you but someone made the statement that unlike Vanguard they are owned by someone, not sure how he got that impression, but my advisor is paid a salary, no commissions and he works for a separate entity but its owned by Vanguard which is a mutual company (no shareholders, account holder are the owners).

To whom are you speaking, peakbagger? I never said any of those things, as far as I recall. I don't use Vanguard PFS, nor have I ever made any statements regarding them.

My primary accounts manager is also a fiduciary, and has also never tried to sell me anything. I see his primary advantage to us being in tax avoidance, in addition to diversification and stability beyond what I'm doing on my own, with the fraction of our portfolio my wife and I (try to half-assed) manage on our own.

 

[Ashful]

Your humble bragging doesn't look good here, and your recommendation for people to follow in your costly miscalculation is doing no one any service.

You sure have an unnecessarily confrontational way of making your point. There was no mention of numbers or bragging in the post you had quoted from me. Statements like this aren’t friendly, and aren’t useful to the discussion.

 

[peakbagger]

To whom are you speaking, peakbagger? I never said any of those things, as far as I recall. I don't use Vanguard PFS, nor have I ever made any statements regarding them.

My primary accounts manager is also a fiduciary, and has also never tried to sell me anything. I see his primary advantage to us being in tax avoidance, in addition to diversification and stability beyond what I'm doing on my own, with the fraction of our portfolio my wife and I (try to half-assed) manage on our own.

It was not directed at you, there was another poster that was throwing shade at Vanguard for what I thought were no valid points.

 

[Easy Livin’ 3000]

It was not directed at you, there was another poster that was throwing shade at Vanguard for what I thought were no valid points.

Not throwing shade at Vanguard at all. Vanguard is the good guy here. Thier pricing in that space has had a tremendous effect in the space, just as it did with mutual funds.

I am shading the additional fees charged by advisors, including Vanguard's advisory. PAS is a strong money maker for them, I don't believe it's run at cost as thier funds are, I might be wrong. If you are going to hire an advisor, Vanguard is one of your better options, mostly because of the lower cost, philosophy, the use of indexes, and they are honest about what to expect. It's just not necessary to give them even .3%, year after year, to invest in 4 index funds (or thier munis for higher tax rate investors), a little tax advice regarding asset location, and semi- annual rebalancing to a static target allocation. That said, I do believe Vanguard's advisory service will provide the best outcome among available advisors. You just don't need the additional cost.

 

[Easy Livin’ 3000]

You sure have an unnecessarily confrontational way of making your point. There was no mention of numbers or bragging in the post you had quoted from me. Statements like this aren’t friendly, and aren’t useful to the discussion.

Come on now, numbers are not required to be bragging. I've always assumed your self proclaimed largess was schtick, and amused by it, but maybe not? If not, sorry bro, and happy holidays to ya!

And your point about your advisors outperforming the market, I believe it. They almost always do during a bear market following a raging, EPS multiple expansion manic market like the the current situation. Keep track on how they do following the next bull market.

And hey, maybe you've found the holy grail in your advisors and they are worth every penny. Keeping track of all those trusts and other accounts does sound unwieldy.

Take these comments for what they are worth. Financial advice from a firewood chat room, fun

 

[peakbagger]

BTW, One of the things I did this week was look at my social security payout for working for most of an extra year. The difference between retiring at 62 and near 63 at my full retirement age (66-10 months) is $4 a month. Obviously, I have to self fund the years between now and when I officially retire but it is surprising how little the benefit changes. Note it can make a big difference for someone who has not worked a full 35 years as SS just enters a zero in the years income for every year under 35 years they have worked so getting rid of those zeros by working a year longer might have a larger impact.

 

[PaulOinMA]

Very pleased I kept my CL (Colgate-Palmolive) stock after I left in 1999. Set it up to do quarterly dividend reinvestment. CL is always mentioned in articles on buy-and-hold dividend stocks. Pleased with how it's done.

 

[BoiledOver]

Congrats on your decision @peakbagger

This whole thread is awesome.

 

[old greybeard]

Congratulations Op, enjoy freedom. I quit work at 56, was burnt out, and hated the job. 40 years in TV broadcasting will do that. Low pay, 24/7 work, physically hard doing transmitter and vehicle repairs. But worse was the job was turning into 4 hours a day trying to keep computer systems going, my back couldn’t handle that much sitting. 2 years after I left we were attacked and ransomed by Russian hackers, happy I missed it.
Now we do our many hobbies during the day, and relax in the evenings. Gardening, hiking, kayaking, hunting, 6 weeks a year at the beach, 5 months a year at our camp living off grid.
Marriage to a like minded saver and worker was key. Wife retired at 56 as well. There is some down time, and it’s more of a mental adjustment, hard to drop the mindset that I must be busy after working since I was 12. Took two years to adjust.
And with the world possibly falling apart the last 6 years doing what I want to do while healthy and fairly young has been priceless.
Savings and paid off homes are a must. I have friends working into their 70’s still paying mortgages, even though they never had kids. New cars, clothes, stupid money practices, paying interest instead of earning it. So simple to be wealthily, time is the tru wealth.