/dev/null Posted March 9, 2016 Share Posted March 9, 2016 It's also the ultimate in "Too Big to Fail" risk, if you think about it. And when it does fail, those greedy people who invested in other things than myRA will be vilified. And the only recourse will be for the Government to step in and manage everyone's retirement account. Because you know, fairness Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted March 9, 2016 Share Posted March 9, 2016 It's also the ultimate in "Too Big to Fail" risk, if you think about it. Absolutely. That's actually spelled out in the product literature (note I said literature rather than prospectus, because the government has exempted itself from that law), where they guarantee that the investment cannot lose money. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 9, 2016 Author Share Posted March 9, 2016 Absolutely. That's actually spelled out in the product literature (note I said literature rather than prospectus, because the government has exempted itself from that law), where they guarantee that the investment cannot lose money. How can they guarantee the investment cannot lose money? That was a rhetorical question. The only thing that is guaranteed by investing in treasuries is that you won't have enough to retire. Link to comment Share on other sites More sharing options...
....lybob Posted March 9, 2016 Share Posted March 9, 2016 How can they guarantee the investment cannot lose money? That was a rhetorical question. The only thing that is guaranteed by investing in treasuries is that you won't have enough to retire. because they have a printing press - they didn't say that the investment wouldn't lose value Link to comment Share on other sites More sharing options...
DC Tom Posted March 9, 2016 Share Posted March 9, 2016 Absolutely. That's actually spelled out in the product literature (note I said literature rather than prospectus, because the government has exempted itself from that law), where they guarantee that the investment cannot lose money. The thing that struck me about it was how strikingly similar it was to a high-yield savings account. (They actually refer to it as a savings account in the literature.) The only real benefit I saw was that interest accrues tax-free...but given how it works, that'll save most people with myRAs about $50/year. To lock up their money long-term in an ultra-conservative portfolio. And it's primarily marketed to young people who should be investing aggressively. I think they might be requiring the wrong people to be fiduciary... Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 The thing that struck me about it was how strikingly similar it was to a high-yield savings account. (They actually refer to it as a savings account in the literature.) The only real benefit I saw was that interest accrues tax-free...but given how it works, that'll save most people with myRAs about $50/year. To lock up their money long-term in an ultra-conservative portfolio. And it's primarily marketed to young people who should be investing aggressively. I think they might be requiring the wrong people to be fiduciary... I was going to say the exact same thing. Who in there right mind would even think that investing for the long term in something tied to the US treasuries is even close to being a good idea. The people running this country are so !@#$ing clueless. Link to comment Share on other sites More sharing options...
DC Tom Posted March 10, 2016 Share Posted March 10, 2016 I was going to say the exact same thing. Who in there right mind would even think that investing for the long term in something tied to the US treasuries is even close to being a good idea. The people running this country are so !@#$ing clueless. I think one of the key points is that once your myRA hits $15k, you have to roll it over in to a traditional Roth (a myRA is a Roth, except with a $15k max value and limited to Treasuries). At which point you can do some serious investing...except you'll have already been trained to take no risks and invest in Treasuries, and will think that in the real world there's a minimum no-risk rate of return. And of course, they market it to people who "can't afford" to invest the minimums in a traditional retirement account, or don't have access to a 401k at work. Precisely the sort of people who would benefit from the pre-tax nature of traditional IRA contributions. So let's put them in Roths...because why not !@#$ 'em over? Most people would be better off putting $20 into a savings account every paycheck, then contributing that into a traditional IRA once they have enough saved. Hell, Fidelity has a no-minimum IRA (even though the mutual funds you can invest in might) - contribute $20/paycheck to that, get the tax break, let it sit in whatever money market account they park it in until you have enough to put it in the funds. Tell me if I'm wrong...but my recollection from my Series 7 days was that, if I advised a young person to invest so conservatively as to put all their money in treasuries at a 2% return, I'd be guilty of misconduct simply for having clearly not done a proper risk analysis of their finances. But if the government does it...it must be a good idea. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 I think one of the key points is that once your myRA hits $15k, you have to roll it over in to a traditional Roth (a myRA is a Roth, except with a $15k max value and limited to Treasuries). At which point you can do some serious investing...except you'll have already been trained to take no risks and invest in Treasuries, and will think that in the real world there's a minimum no-risk rate of return. And of course, they market it to people who "can't afford" to invest the minimums in a traditional retirement account, or don't have access to a 401k at work. Precisely the sort of people who would benefit from the pre-tax nature of traditional IRA contributions. So let's put them in Roths...because why not !@#$ 'em over? Most people would be better off putting $20 into a savings account every paycheck, then contributing that into a traditional IRA once they have enough saved. Hell, Fidelity has a no-minimum IRA (even though the mutual funds you can invest in might) - contribute $20/paycheck to that, get the tax break, let it sit in whatever money market account they park it in until you have enough to put it in the funds. Tell me if I'm wrong...but my recollection from my Series 7 days was that, if I advised a young person to invest so conservatively as to put all their money in treasuries at a 2% return, I'd be guilty of misconduct simply for having clearly not done a proper risk analysis of their finances. But if the government does it...it must be a good idea. You're absolutely correct. Suitability is, as you can imagine, very important. You are required to do as best you can to determine someone's tolerance for investment risk. Just because they are 25 and can withstand a lot of risk does not mean you put them into something risky. It has to match their comfort level. So in essence the government is doing zero suitability analysis for these investors and putting everyone, regardless of age, time frames or risk tolerance, into the exact same investment. Can you imagine how long I'd be in business if I put every client in the exact same investment. And these are the nimrods running our government. Imagine what this ruling will do to the inflows to Mutual Funds. You'd think that fee based platforms would be licking their chops but one of the top ones I used, as of last month, closed up shop. A $300 billion company gone in a little over 6 months. It's going to be a cluster!@#$. Link to comment Share on other sites More sharing options...
DC Tom Posted March 10, 2016 Share Posted March 10, 2016 Imagine what this ruling will do to the inflows to Mutual Funds. You'd think that fee based platforms would be licking their chops but one of the top ones I used, as of last month, closed up shop. A $300 billion company gone in a little over 6 months. It's going to be a cluster!@#$. This is where lybob or birddog (I forget which is which, they're indistinguishably stupid to me) chime in and point out that that company must have committed fraud and cheated people, because $300B doesn't just disappear overnight, so clearly this ruling is necessary. Sounds like they're doing to the financial planning industry what they've done to real estate: wreck it with massively ignorant regulation. And like the real estate industry, financial planning will no doubt find a way to work around the ignorant regulation...that will likely involve no small amount of fraud under the new regulations. Link to comment Share on other sites More sharing options...
3rdnlng Posted March 10, 2016 Share Posted March 10, 2016 Guys, a simple well thought out investment strategy in the right kind of real estate will take one far. You don't need a Trump Tower if you have a schitload of Dollar Generals. Link to comment Share on other sites More sharing options...
Nanker Posted March 10, 2016 Share Posted March 10, 2016 Holding my breath here, waiting for the gubment to declare itself a SIFI. Oh right. They're exempt. They always exempt themselves from draconian dictates. Link to comment Share on other sites More sharing options...
Tiberius Posted March 10, 2016 Share Posted March 10, 2016 I'm not going to bother even looking at the details of these reforms as they will impact me in no ways at all. I learned early on not to trusts these financial managers/brokers/whatever. They exist to siphon off a share of your wealth. Fair enough, they are suppose to guide you towards investments that are right for you, and I'm sure some of them actually do. But there is no way of knowing. Just try and figure the information packets they create. Lots of shinny pie charts, graphs and other nonsense. No word on how much of a cut they take or how much that cut will cost you in the long run. Money lost up front is capital you can not benefit from in the long term. These people, even the honest ones, will cost you tens of thousands of dollars in the long run. The best thing to do is to educate yourself so you won't need the services of these institutions. It's your money, you should work to see that its put to the best use. Sadly, finding good information is so hard because so many people want your money and work to get it. Jim Cramer is an example. The dude works for his sponsors to try and get you to buy and sell as mush as possible so etrade, scotttrade, ameritrade with get all the transaction fees. I've always figured big investment houses took "back door" payments to have the brokers/advisors steer the naive investor into low performing "packages" but I don't see how any reforms will stop that. I know a guy that use to work at hawking these packages and he said he was just salesmen and not real financial advisors. He sold the packages that he was told to sell by the company and did not know much about them himself. If I could suggest one book to everyone interested in investing it would be "A Random Walk Down Wall Street" http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338 Great advice and very thought provoking Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 I'm not going to bother even looking at the details of these reforms as they will impact me in no ways at all. I learned early on not to trusts these financial managers/brokers/whatever. They exist to siphon off a share of your wealth. Fair enough, they are suppose to guide you towards investments that are right for you, and I'm sure some of them actually do. But there is no way of knowing. Just try and figure the information packets they create. Lots of shinny pie charts, graphs and other nonsense. No word on how much of a cut they take or how much that cut will cost you in the long run. Money lost up front is capital you can not benefit from in the long term. These people, even the honest ones, will cost you tens of thousands of dollars in the long run. The best thing to do is to educate yourself so you won't need the services of these institutions. It's your money, you should work to see that its put to the best use. Sadly, finding good information is so hard because so many people want your money and work to get it. Jim Cramer is an example. The dude works for his sponsors to try and get you to buy and sell as mush as possible so etrade, scotttrade, ameritrade with get all the transaction fees. I've always figured big investment houses took "back door" payments to have the brokers/advisors steer the naive investor into low performing "packages" but I don't see how any reforms will stop that. I know a guy that use to work at hawking these packages and he said he was just salesmen and not real financial advisors. He sold the packages that he was told to sell by the company and did not know much about them himself. If I could suggest one book to everyone interested in investing it would be "A Random Walk Down Wall Street" http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338 Great advice and very thought provoking So you're backing something you've not yet read? How progressive of you. Now I know why you back people on the left. Are there bad people in this industry? Sure. But I have a tip for you. If you want to know how much money an advisor is making off the plan ask them. If they waffle leave. My clients very rarely ask how much I'm getting paid. You know why? I tell them. If I use fee based planning I have them sign a fee agreement that tells exactly what they are paying. If they don't use fee based planning I tell them what the up front charges are and the on going expense ratios of the investments I've chosen. Sure those fees will cost you a lot over time however you will likely be in a better place than your peers who do it on their own because they make mistakes. Deadly mistakes that they cannot overcome. Use only advisors that come highly recommended and I suggest you take the recommendations more from other trusted professionals than friends or relatives and you'll be fine. The issue is that the industry is being painted with a broad brush. Those that will likely benefit the most are those that are not doing real planning. They're gathering assets, tacking on a fee and moving on. Typically never to be heard from again unless they have something to sell you. So you're right educate yourself. A true financial planner does not do only investments. Link to comment Share on other sites More sharing options...
Tiberius Posted March 10, 2016 Share Posted March 10, 2016 So you're backing something you've not yet read? How progressive of you. Now I know why you back people on the left. Are there bad people in this industry? Sure. But I have a tip for you. If you want to know how much money an advisor is making off the plan ask them. If they waffle leave. My clients very rarely ask how much I'm getting paid. You know why? I tell them. If I use fee based planning I have them sign a fee agreement that tells exactly what they are paying. If they don't use fee based planning I tell them what the up front charges are and the on going expense ratios of the investments I've chosen. Sure those fees will cost you a lot over time however you will likely be in a better place than your peers who do it on their own because they make mistakes. Deadly mistakes that they cannot overcome. Use only advisors that come highly recommended and I suggest you take the recommendations more from other trusted professionals than friends or relatives and you'll be fine. The issue is that the industry is being painted with a broad brush. Those that will likely benefit the most are those that are not doing real planning. They're gathering assets, tacking on a fee and moving on. Typically never to be heard from again unless they have something to sell you. So you're right educate yourself. A true financial planner does not do only investments. Where did I say I backed it? You sure read a lot into things that are not there. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 Where did I say I backed it? You sure read a lot into things that are not there. You didn't and sure that was pretty presumptuous of me however you said you didn't read it but then began to bash advisors. I just put two and two and your history together. Link to comment Share on other sites More sharing options...
Tiberius Posted March 10, 2016 Share Posted March 10, 2016 You didn't and sure that was pretty presumptuous of me however you said you didn't read it but then began to bash advisors. I just put two and two and your history together. Yes, you were making assumptions based upon pre-conceived biases and ignorance. Par for the course for you Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 Yes, you were making assumptions based upon pre-conceived biases and ignorance. Par for the course for you No assumptions based on your well documented track record. Link to comment Share on other sites More sharing options...
Tiberius Posted March 10, 2016 Share Posted March 10, 2016 No assumptions based on your well documented track record. But not assumptions that matched what I actually wrote. Assuming= making an ass of u Link to comment Share on other sites More sharing options...
Chef Jim Posted March 10, 2016 Author Share Posted March 10, 2016 Assuming= making an ass of u Hey now that's clever. But you even !@#$ed that up. Link to comment Share on other sites More sharing options...
DC Tom Posted March 10, 2016 Share Posted March 10, 2016 But not assumptions that matched what I actually wrote. Assuming= making an ass of u And ming. Don't forget ming. Link to comment Share on other sites More sharing options...
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