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About Me:

Anniebird

A few years ago, I retired early from a large corporation. I had significant money in my 401k simply because my company stock had done well. I knew nothing at all about proper investing principles. I decided to hire a 'professional' to handle my money.

I interviewed Financial Advisors and also did some basic research about investing. My basic research sent up red flags about things Financial Advisors were telling me. None of them suggested any index funds and if I asked about them, the advisors �advised� against them. None stressed the importance of keeping costs low. And when I figured out their approximate costs to me (no easy task!), they were all very expensive.

I was fast losing trust in �professionals� and I had no trust in myself. I just wanted someone to take care of me! Things went from bad to worse. I knew that I needed to reinvest my money, but I was paralyzed. There was too much to learn, I had no self-confidence, none of the advisors seemed right and I was afraid to make any decision at all.

I kept researching and interviewing Financial Advisors and slowly something wonderful started to happen � I started to �get it�. I saw that I was making things much more complicated than they needed to be. What seemed unknowable before became both knowable and fascinating. I set up a diversified, low-cost portfolio of mainly index funds and the cost per year for my fees is under .20%. I am saving literally hundreds of thousands of dollars over time by doing my own investing and I am very happy with my returns. I spend less than 8 hours a year on my investments.

Chapter Two - Helping Others

After I started doing my own investing, I wondered: Were my friends and family in expensive, poor performing funds? Did they understand any of what I had learned? I asked about their investments and sadly, I learned what was being done to them.

After finding out how much they were paying and what kind of service they were getting, my friends and family were no longer interested in continuing a relationship with their �advisor�. I gave them information and support and they would start out just like I had�scared and ignorant. But that doesn�t last long. People can learn. Knowledge is power.

I help people by simply telling them the truth and giving them information and resources. It's that simple. That's what this blog is about. I do not tell people what to invest in. I can�t think or act for others. Part of what I am about is self-responsibility.

I hope you enjoy and find value in my blog!!

A scary table

March 16th, 2008 at 03:44 pm

My husband informed my that he never thought much about paying 2.5% in fees for investing. After all, what's 2.5%?

What he didn't get (yes, I married a financial idiot but he's a great guy) was that the 2.5% was coming out of the entire managed assets (not just gains) and that it added up to an amazing amount of money over time.

Take a look at this table and you'll see what 2.5% can mean to your retirement nest egg:

http://www.retireearlyhomepage.com/advise.html

Shouldn't a Financial ADVISOR be showing his clients this chart and carefully reviewing fees and keeping them as low as possible? But they do not. Did yours?

Posted in Uncategorized | 6 Comments »

6 Responses to “A scary table”

Ima saver Says:
March 16th, 2008 at 04:14 pm 1205684045
1205684045

Welcome. I am like you. At the ripe old age of 44, I started learning how mutual funds, stocks and how to invest. I have done it all on my own since then and never paid a penny in commission.
Anniebird Says:
March 16th, 2008 at 04:45 pm 1205685915
1205685915

Good for you! It's really not brain surgery like they make it out to be.

There's a huge ongoing study that found this:

"...the BCT study found that the raw returns of equally weighted mutual funds (net of all expenses) for 1996 to 2002 were 6.626% for the investors working on their own and were 2.924% for funds provided by advisors.

In other words, the public working on its own did more than 100% better than financial advisors when it came to selecting equity mutual funds. After factoring in inflation and taxes, clients of financial advisors lost money and lost purchasing power."

http://trendfollowing.com/whitepaper/The%20Study%20of%20the%20Decade.pdf

I'll be blogging about this study in the future.

I'm very happy to meet another diy-er.
aevans1206 Says:
March 16th, 2008 at 05:00 pm 1205686834
1205686834

Anniebird, I love you already and don't even know you! Welcome aboard and I look forward to learning much from you.
Anniebird Says:
March 16th, 2008 at 05:25 pm 1205688329
1205688329

Thank you soooo very much. You guys have no idea how much I appreciate your nice comments. Usually I have 'financial advisors' calling me terrible names and threatening me or doubletalking everything I try to say to confuse people.

This is wonderful!
creditcardfree Says:
March 16th, 2008 at 05:47 pm 1205689679
1205689679

Welcome! The fees on a mutual funds are on page 2-3 of the prospectus for every mutual fund out there. It's one of the best ways to show how much you may pay over time. I'm sure you know this...just sharing with the others!
Anniebird Says:
March 16th, 2008 at 06:09 pm 1205690943
1205690943

Thanks for the welcome!

Sadly, ALL the fees are not in the expense ratio.

http://www.buyupside.com/articles_other/mutualfundhighhiddenfees.htm

http://www.zeroalphagroup.com/news/mufucost012404.cfm

And I feel badly about the fact that I haven't been able to figure out how to tell people how to calculate all the hidden fees they pay because it confuses even me. If anyone knows a simple calculation, I'd love to find out.

Thanks much for telling people about the prospectus! It is a simple place to look. I just like Morningstar and it gives a nice overview of fees.

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Anniebird's Personal Finance Blog

The truth about the financial advice industry - and it isn't pretty.

A scary table

6 Responses to “A scary table”

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