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Well, that's a completely different topic. Negotiating for a price is besides the point if 10k is the sale price, period, as in my example. Some people still pay MSRP for cars because 'its easier'.

 

Yes, it is a line item. But one you would pay either way (paying cash or financing the debt) unless you would completely deplete that 100k

 

How old are you? (AKA, how risk-tolerant are you)

Where do you think that money comes from? earnings that would have otherwise been paid out if they didn't have to pay said commissions.

 

And as I said, that same exact "commission" comes out of it regardless of where it goes: to an FP, to the rep at the fund, to the bank.... the same commission is always paid no matter how the product is purchased. There's no magic to it. Do you think there is no commission paid if you buy direct? LOL they guy/girl that picks up the phone, get the same commission. It's not negotiable, it's law and SEC rules built into every investment product.

 

Then you've fallen for their trap. I guarantee you they aren't loaning you money for free. I'll get your 10k final price for less.

 

I'm 50, but I'm for higher risk since my wife and I are maxed out on our Roth IRAs and I have a penson at work.

 

I just dont know what to say. The fact is that what you are telling people here:

-dont use tax-advantaged retirement accounts
- dont use low cost index funds
-use a financial advisor always (which doesn't often benefit much us small timers with under 500k of liquid assets to play with)
- and worse, use a financial advisor who makes sales commission rather than a fee only advisor with no conflict of interest


All 4 of these, go against pretty much every piece of good fiancial advice Ive ever read or been told by people in the industry (yes, I also have fiends that work as investment advisors full time also - most of them making a lot more money - think 500k and up, way up - than their clients. The honest ones tell me straight out that I dont have enough assets to make what they would charge worthwhile). The only thing that would happen if I follow that advice is my advisor would get rich... off of me.

I dont particularly care for your condescending tone either. Which is why im really asking you to lay off.

 

I got the impression that he is is playing in a different league, maybe that's his point.

 

Yeah, i believe so. I put commission based financial "advisors'" in the same camp as the the high end car brands that call their salesmen "client adivsors" now.


"Yes sir, looking at your complete situation I would advise you to pay us $85,000 for this nice 5 series right over here. I'd also strongly advise you to add the $20,000 lifetime warranty. It really is in your best interest sir"

 

You'd be surprised at how many industries sell you their product at a loss. I work for a fortune50 that does just that.

Where they make the money is in the aftermarket. for the car analogy, that's service.

It's also about meeting certain numbers. Most of these items are made ahead of time. Just-in-time mfg'ing isn't popular for big items-- people would rather drive home today, not wait 6 weeks.

but again, that wasn't the point of the example. the example was you negotiated already, and the handshake was on 10k for both purchase methods.

I could steal the truck and get it for free. And then i could drive it in to mexico and never be seen again and win the internetz.

 

I've never made a trade with a person, ever.

I pay my $7.95 through my brokerage and wait for my limit to hit.

 

There's many different ways you can approach this.

IMO, If i was 50, i wouldn't be too worried about trying to lower my tax base. Instead, I'd be focused on earning as much as I possibly could.

See, I wouldn't mind paying 20% on my profit so long as my profit was worth it.

Ie, you can make 5% and keep it all, or make 12% and pay 20% on it and make more. Even making just 8% and paying tax on it will net you more than earning 5% with no taxes (this does not account for compounding, which would make the gains higher)




If you're risk tolerant, Playing high pay out ETNs are where I would have money. In fact, it's where I do have a good portion of my money.

People look at me like I'm crazy when I tell them I make 20% on some of my money.
at about 3.5 years vested, you could lose your entire principal, and still come out even. If the principal stays pretty steady (which for the past 3 years i've been playing these, it has been within a ~$4 spread.

It isn't a scam. It's just VERY high risk. ETNs are products, not physical holdings like an ETF or fund. You are investing in the bank. If the bank fails, you're out.
And then, throw 2x leverage on top of it.
and then, throw your self in to a very volatile sector like mREIT and BDC's.

If you're still not scared,
CEFL pays about 18% apy
MORL pays about 21% apy
http://finance.yahoo.com/news/ubs-declares-coupon-payments-eleven-150000442.html

so yeah, you'll pay tax, but you'll still make more money.


Do read up and do your own due diligence before investing in these super high risk ETNs.

 

For cars its not just that. They can sell it to you at invoice and still make money due to the holdbacks. And because holdbacks are now so well known thanks to resources like Consumer reports, many auto companies have built all kinds of incentives in beyond the holdbacks, even harder to find out. And then their is that theif known asthe F&I guy sneaking all kinds of bgous warranties and "protection" plans in after the deal. All so that the dealer can sell to you below invoice, make you think you got a deal - and still make money. Some of these incentives come in the form of bonuses for hitting volume quotas - which is part of hte reason you can sometimes get deals end of month. Another one is bonuses (and vice versa penalties) for good scores on the after sale customer survey... which is why my Toyota salesman practically tried to bribe me into giving good scores on that last year.

 

One better, I open an account directly with the mutual fund firm and buy into the funds for free. Having all my IRA money there also allows me acess to their premium shares with lower costs than what I can buy through a broker.

So no commissions or fees period, unless of course somebody thinks the circuit board that processed my order is getting a buck ?

 

By the way, for anyone who is considering an advisor take a read of this:

http://investingessentials.blogspot.com/2006/02/chapter-9-on-your-own-or-hire-advisor.html


Note that Im not saying an advisor is necessarily a bad thing - for many situations its a good idea - especially if you have large liquid assets (keeping in mind that large investment firms think you are small time until you start talking to them about 500k-1million or more)

If and when I reach the point in life where I choose to use one, I want them working for me, not working for sales commissions. I'd retain a fee only advisor paid by the hour, not a commission earning broker or asset management firm taking a cut of my account balance yearly.

 

I never said ANY of those. Quite the contrary. I said I don't like 401k's generally, and don't like people saying as you were boasting about how great the matching funds are. They are not all they are cracked up to be, and often you can do better with other products including not taking the "matching money". Years ago most companies matched 100% up to 5 or 6% and it wasn't that bad of a deal. Today they are far and few between and often match far less (50% up to 3% is the most popular today). That fact your money is tied up, gets hit with lots of penalties, and is governed by CHANGING rules and laws is a BIG problem. Today you can take your money at 60, next year it might be 62, then 70, who the hell knows? For all we know, they could give it to Iraq someday! You trust congress to decide when you can and can't use your OWN hard earned money? NOT ME!

"Don't use low index funds"? Care to quote me ? LOL! To the contrary again. Actually what you think might be low index funds, and is "reported" as low index funds is often not reality. A FP can sort that out for yo and show you products that are REALLY low index, not smoke in mirrors. I have some VERY bad personal experience here. Costly ones, we will just leave it at that.

HUH??? That could not be farther from the truth. Most FP's do nothing but assist clients with less than 500k of assets. That's most of their business! What the heck are you talking about??

Your conflict of interest comments are completely off base. A fee based planner is paid based on HOW MUCH money you invest and have. Their personal goal is to yank as much money out of your hands as possible, and they don't give a hoot on what you invest it in. As long as you invest it. No conflict there huh? They are like bookies, the more money you have and hand them, the more they get paid and they do just about anything to get that money.

Commission based planners spend most of their time helping people with their finances, and NEVER get paid for it. Over 50% of my wifes clients have never made her a single dime. That is a fact, period. They often ask her how she makes money and feel bad she spends so much time with them... She makes money from doing the right thing for her clients, NOT by yanking money out of their hands. It’s all about referrals. If you do the right thing, you will end up making money off referrals that may make you some money someday. She doesn’t look at what products pay her, she often has no idea what she will be paid until she receives a check in the mail. The commissions are often so complicated she couldn’t figure out what it will be if she tried. What she does is put people in products that are best suited for them and their scenario. Sometimes she gets paid for it, sometimes she doesn’t, and it all works out. She is not making big money, just enough to make it worthwhile, and it’s very satisfying to help people. Happy clients (aka she does good work), end up referring new clients. And that is what it is all about.
Now fee based planners are completely different. They make money based on how much money you have. So they are out looking for high end, wealthy clients and don’t give a hoot about the regular guys like me and you. They make big money cause they will only deal with “big” clients which is exactly opposite of your claims, again.

Yes, they are making 500k and up because of the above! And they won’t deal with you because they won’t make any money on you. Commission based FP’s will deal with you, and they will spend time with you, look at your big picture, and advise you on what’s best for YOU, regardless if they make money or not. Who's really conflicted, the guy that won't deal with you cause he won't make enough money, or the person that would work for free?

Your kidding right? Are you reading YOUR posts? Not only are your posts condescending, your miss quoting me. Remember something, I’m talking with close experience. Not something I “read on the internet”, or “some guy once told me” type stuff. My wife is in the business. She does business with some of biggest well known brokerage firms in the country, and works with 10’s or I should say 100’s of FP’s. We have seen it all, this is not "hearsay".

Actually, yes. The “circuit” board DID get a buck. That circuit board is owned by a 1%’er who you just paid the COMMISON to. You just didn’t see it.

What you guys are missing is the fee's and commission’s are and WERE paid to somebody, it HAS to be, again it is an SEC RULE and LAW built into the products. If your referring to buying a stock or bond or simple product, that is a different story and that is not what we are talking about. You can trade those with an FP for free. My wife doesn’t even charge the $7 to trade a simple product. But we are talking about a retirement type funds (401s, mutual fund accounts, managed funds, insurances...). They ALL have fee's and commissions built into them, and they are always paid regardless of how, where or by whom the product is purchased/invested in. You just don't see the commission, that's all. If you buy from a broker/FP, they have to disclose the commissions and fee's by law. If you buy directly from certain institutions (vanguard direct for example), they are not required to disclose them to you (which by the way is what 60 minutes has been going after for a while now!). So people like you guys "think" nobody made any money or commission on it, but somebody did based on your zip code. So this is my point, why not use a FP that has YOUR interest in mind in designing the product, instead of somebody on the phone or website or whatever that does not know you, does not care about you, and lets you do whatever you want? By the way, these self made investments are often the wrong thing to do. People think they are making a good decision, and often find out later it was not a good decision. An FP can head that off for you, that is what they do for a living.

Think of it this way: Most people know little about the motor in their car. Sure, you can read on the interweb how to fix your motor and go buy the parts, and try and hack at it and maybe get it fixed, maybe not fix it and waste a bunch of money on parts and your time, and maybe even make the problem even worse cause you diagnosed the problem wrong in the first place, or fixed something that wasn't broken and now you still have the problem... we've all been there! ..... OR, you can go to a trained mechanic who knows what they are doing and knows most of the cause and affects of the problems with it. Pay them to fix your motor. In the long run it will likely be cheaper (cause they actually fix the right thing, and fix it correctly so it won't occur again..), and you won't have wasted your time, and best of all your car now works instead of still sitting in your garage. The big difference here is in this scenario your car doesn't work, big deal. In the retirement and investment scenario, you end up with little or know money in retirement, or you loose your money outright in bad market decisions, or you just don't get the growth and tax savings you could have. All making a HUGE impact on your life which could have been avoided by using an expert in the field instead of trying to "wing" it yourself. It's a VERY complicated industry, and every single person is a completely different scenario. Reading something on the internet that worked for one guy, is meaningless for the next guy. Income streams, location, savings, pensions, current investments, debt, expenses of all sorts (bills, divorce, child support, taxes....), and lastly your goals are ALL different for everybody. If you don't consider all of this, your missing the boat and could be going down a bad road that looks great now, but someday you may see a light at the other end of the tunnel and that light just might be another train coming right at you that you didn't know about!
I’m just trying to help you with some experience, that’s all. Take it or leave it, and good luck!

 

my wife is a brain doctor. Anyone want a lobotomy? 15% off for FWHC members with discount code WIFECERTIFIED15



I get it that you hear things and listen and do things being close to it, but at the end of the day, you're no more qualified than I am.

 

Its funny.. I keep saying fee only (charge by the hour) and you quote me out of context saying fee based (who take a % of assets. Conveniently twisting my words around.


I wouldn't even care, since I know better, but a lot of unsuspecting folks out there with very few asset or retirement plan buy into this marketing and then get taken to the cleaners through fees, commissions and bad advice, so I believe its a point worth raising. ( think of that scene in WOWS with DeCaprio and McConaughey in the restaurant right now)

There is nothing you can possibly say, even if you wrote 10 more pages of text, that will convince me that a "financial planner" selling me investments on commission actually has my best interest at heart, anymore than anyone who is selling me any product or service on commission does. (and noting that anyone, even with no training at all can use that title so long as they leave off the "C", just like Fidelity calls every person who answers the phone a "VP" - its not the same thing as a certified CFP ).


The funny part of it all, is that in auto repair also, more than once Ive been screwed by taking the car to a mechanic vs. doing it myself so I know its right. primarily dealer mechanics. Ive had dealer service department deliberately break things to sell me more repair - thinking I'm too stupid to know any better.. I called them on it too. I know I'm not the only one. as always, buyer beware.


Now I am definitely and permanently out of this thread. good day.

 

My wife works with loans.