What if you made $500,000 year?

Bushmaster

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And that is not unusual cause many people with that income want to PROVE they have that income with all that spending........stupid. I probably need some financial advice but my income is pretty set and Detroit pays for my insurance so I am in great shape. Lets say I have 500 a month for stocks.......what should I do at my age (born in 55)


I put my money with my broker. I am not a stock picker. Don't have time to follow it that closely.
 

Politigator

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and that is not unusual cause many people with that income want to PROVE they have that income with all that spending........stupid. I probably need some financial advice but my income is pretty set and Detroit pays for my insurance so I am in great shape. Lets say I have 500 a month for stocks.......what should I do at my age (born in 55)

Not sure what Detroit pays for my insurance means.

In terms of what you should invest in, that really depends on your total financial picture. If I knew nothing else I'd say put it in a vanguard target date fund or a vanguard life strategy fund. Don't bother with individual stocks. If people think their stock broker in the corner strip mall has information that wall street doesn't they are sorely mistaken.
 

ChiefGator

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Not sure what Detroit pays for my insurance means.

In terms of what you should invest in, that really depends on your total financial picture. If I knew nothing else I'd say put it in a vanguard target date fund or a vanguard life strategy fund. Don't bother with individual stocks. If people think their stock broker in the corner strip mall has information that wall street doesn't they are sorely mistaken.

Well if it depends on your total financial picture, individual stocks might be the best alternative. Now if you are too lazy to get educated then probably those funds are a good idea. And yes your broker goes by the company line.
 

ChiefGator

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Did you build your own house or buy it?

Interesting comparison, but not really accurate. Building a house has several objective type of evaluations, being a broker does not.
 

Bushmaster

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Interesting comparison, but not really accurate. Building a house has several objective type of evaluations, being a broker does not.

Wrong. I built mine. It looks great, but I got short sighted in some areas where someone who does this for a living could have steered me in the right direction.

Same with anything really. I could do my own investing, my dad is a money manager and could help me. But saving that 1-2% may cost me more in the long run. I get the same jive when people tell me they can do their own taxes as good as I can do them. I just nod. You may can do them well, but are you PLANNING well?
 

Politigator

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Well if it depends on your total financial picture, individual stocks might be the best alternative. Now if you are too lazy to get educated then probably those funds are a good idea. And yes your broker goes by the company line.

If you want to play with individual stocks fine but using funds is not laziness. It is a recognition that diversification is a good thing and very few people, and certainly nobody here, has some unique ability to sort out publicly available information and beat wall street and the market in general.
 

ChiefGator

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Wrong. I built mine. It looks great, but I got short sighted in some areas where someone who does this for a living could have steered me in the right direction.

Same with anything really. I could do my own investing, my dad is a money manager and could help me. But saving that 1-2% may cost me more in the long run. I get the same jive when people tell me they can do their own taxes as good as I can do them. I just nod. You may can do them well, but are you PLANNING well?

So it "looks good", to me that means almost nothing. Is it built to proper code? Does it have the type of access that you need, for example handicapped access? And yes a computer program can do my taxes pretty well, and planning is for folks with more complex investments than I have.

I have been rooked by some professionals, now I insist on understanding my investments, then any mistakes are mine. I made a few, but overall it has worked out well.
 

ChiefGator

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If you want to play with individual stocks fine but using funds is not laziness. It is a recognition that diversification is a good thing and very few people, and certainly nobody here, has some unique ability to sort out publicly available information and beat wall street and the market in general.

Why do you need to beat wall street? I sure don't even consider that. What I do is consider my goals and invest to meet or exceed them. So far my deciding is way better than what was recommended by my broker. Not to mention most of that publicly available information is worthless. Management can manipulate the finances pretty easily.
 

Politigator

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So it "looks good", to me that means almost nothing. Is it built to proper code? Does it have the type of access that you need, for example handicapped access? And yes a computer program can do my taxes pretty well, and planning is for folks with more complex investments than I have.

I have been rooked by some professionals, now I insist on understanding my investments, then any mistakes are mine. I made a few, but overall it has worked out well.

I think if you have the ability and time it is helpful to learn your own taxes, to the extent they aren't too complicated. By understanding them it helps you plan better. I could have saved money in the past when self employed by paying myself a lower salary and dodging some payroll taxes, or perhaps paying my kid to empty my office waste baskets, but I decided that the marginal savings wouldn't be worth the time and complicated, and would have mostly been offset by fees paid to the cpa. If I had a full fledged business I would absolutely hire a cpa but I'd understand every damn line on the return.

But at least a good cpa is worthwhile in some applications. I honestly believe there are very few good financial advisors, because the way the are compensated is not in alignment with the clients interest. And people think it is very complicated but it doesn't have to be. You can literally put it on one low fee index based target date fund and be better off than what you get with most advisors, which will likely consist of high fee / load funds and a whole array of different individual stocks, which is really a completely pointless approach other than maximizing broker commissions.
 

Politigator

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Wrong. I built mine. It looks great, but I got short sighted in some areas where someone who does this for a living could have steered me in the right direction.

Same with anything really. I could do my own investing, my dad is a money manager and could help me. But saving that 1-2% may cost me more in the long run. I get the same jive when people tell me they can do their own taxes as good as I can do them. I just nod. You may can do them well, but are you PLANNING well?

1-2% sounds like a low number, but that is likely 20-30% of your long term return. A 2% fee over 50 years will eat away 2/3 of your portfolio at a return of 8%. Even a 1% fee over 40 years eats away about 25% of your ending portfolio value.

How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings - NerdWallet
 

78

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Most brokers add no value. Just put your money in a target date fund and you'd be far better off.
Most CPA's allow the already populated tax software to spit out several pages of superfluous worksheets and then include it in the delivery at an inflated price.
 

Concrete Helmet

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I honestly believe there are very few good financial advisors, because the way the are compensated is not in alignment with the clients interest. And people think it is very complicated but it doesn't have to be. You can literally put it on one low fee index based target date fund and be better off than what you get with most advisors, which will likely consist of high fee / load funds and a whole array of different individual stocks, which is really a completely pointless approach other than maximizing broker commissions.
I think this is debatable depending on personal investment strategy and portfolio make up to say the least...BTW I'm not saying you're wrong and in fact for someone like me it sounds....well pretty sound. Most of my investments are in local RE, Why? Because I have lived here for over 50 years and have been involved in the LOCAL market for about 30. I've had an Real Estate Appraisal license, Mortgage Broker License and have worked in Title Insurance for the last 5 years now ....I know more about Orlando area RE than probably any RE Broker in the area....I can invest with the utmost confidence.

On the other hand I don't live anywhere near Wall Street and don't know the inner workings of the stock market for sh!t.
If I had a large stock portfolio I would damned sure invest in the highest quality professional money manager/advisor I could find....
 

ChiefGator

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I think this is debatable depending on personal investment strategy and portfolio make up to say the least...BTW I'm not saying you're wrong and in fact for someone like me it sounds....well pretty sound. Most of my investments are in local RE, Why? Because I have lived here for over 50 years and have been involved in the LOCAL market for about 30. I've had an Real Estate Appraisal license, Mortgage Broker License and have worked in Title Insurance for the last 5 years now ....I know more about Orlando area RE than probably any RE Broker in the area....I can invest with the utmost confidence.

On the other hand I don't live anywhere near Wall Street and don't know the inner workings of the stock market for sh!t.
If I had a large stock portfolio I would damned sure invest in the highest quality professional money manager/advisor I could find....

Or become educated to the extent that you desired. I have had investments that were supposed to be fool proof, make money no matter the economic conditions. They lost almost everything I paid for them. Most of the "advice" is highly biased and if they were so great why would they help you?

That said I fully support whatever you might think best for you, after all I don't know you. I do wish I was as good at RE as you consider yourself to be.
 

BNAG8R

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Most CPA's allow the already populated tax software to spit out several pages of superfluous worksheets and then include it in the delivery at an inflated price.

Oh.


Snap.
 

ChiefGator

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If you want to play with individual stocks fine but using funds is not laziness. It is a recognition that diversification is a good thing and very few people, and certainly nobody here, has some unique ability to sort out publicly available information and beat wall street and the market in general.

Why would anybody need to sort out all that information, most of it is not that reliable at all. Surely you know that corporate accounting has vast means to manage the numbers. And as I said I don't care to beat wall street or the market, I want to meet my objectives, that generally don't care about that.

A good example is Apple, some time ago it hit about 100, a friend and I decided to buy, I chickened out. No need for analysis, it was a great buy.

Great to know you are a good investor.
 

BMF

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Financial Samurai is one of my favorite financial blogs. The guy (Sam) is a right-leaning San Francisco native, which is interesting. His blog and facebook page are great reading.

Lot's of good comments here. These people making $500K do what most people do....they upgrade their lifestyle when they make more money.
 

ChiefGator

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I think if you have the ability and time it is helpful to learn your own taxes, to the extent they aren't too complicated. By understanding them it helps you plan better. I could have saved money in the past when self employed by paying myself a lower salary and dodging some payroll taxes, or perhaps paying my kid to empty my office waste baskets, but I decided that the marginal savings wouldn't be worth the time and complicated, and would have mostly been offset by fees paid to the cpa. If I had a full fledged business I would absolutely hire a cpa but I'd understand every damn line on the return.

But at least a good cpa is worthwhile in some applications. I honestly believe there are very few good financial advisors, because the way the are compensated is not in alignment with the clients interest. And people think it is very complicated but it doesn't have to be. You can literally put it on one low fee index based target date fund and be better off than what you get with most advisors, which will likely consist of high fee / load funds and a whole array of different individual stocks, which is really a completely pointless approach other than maximizing broker commissions.

Exactly the point, few advisors on just investments are worth their costs. So go simple, or get educated and go your own way. Just a choice.
 

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