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Everything posted by EdLaFave

  1. Can you define what a private placement vendor is?
  2. The article begins by pushing back on the notion that there is a major problem with teacher pay, but: 1. Teachers are paid less than their similarly educated peers. 2. Some of the top talent in the labor pool refuses to teach because they’re unwilling to accept the lower salary. I know it is anecdotal, but the only reason I’m not a teacher (along with several coworkers) is because of money. I’ve consistently made 2-3x what my wife makes and that has continued even after she moved into higher paying administration jobs. I’m not a fan of suggesting that people who spend more than 25k/year are bad with money. While it may not meet the technical definition of poverty (not sure, since I know we pay full time workers 15k in this country), those are poverty wages that might cover the bare essentials. A one bedroom apartment in Orlando is going to cost you more than half of that...now factor in utilities, food, transportation, healthcare, etc and it looks like home ownership, entertainment, vacations, hobbies, kids, and pets are all luxuries you can’t afford. I also found the article to be quite dystopian and unrealistic when he started to suggest retirement in 7 years was reasonable, when he started suggesting teachers find a way to fill every (most? some?) non-workdays with work, and when he suggested living on 13.5k per person. I don’t like to minimize the pay issue because I think it hurts both the profession and the children. I suppose the author may consider me part of the “whiney internet retirement police,” but my wife and I save over 80% of our post-tax, post-housing income, I’m staunchly anti-consumerism, I’m on pace to hit my FIRE number by 35, and people often consider my finances to be extreme. So if I’m suggesting this article is unrealistic...maybe it is?
  3. Did he live on the border between counties? Some (many?) counties are so big that if you lived in the middle of them then switching to another county would add quite a bit to your commute. The other thing I wonder about is pay. Here in Orange County (FL) they have a salary schedule that is in part based on years of experience. I'm not sure if those years of experience transfer to another district...or if your years of experience in another district would transfer back if you were to return to Orange County. It wouldn't surprise me one bit if moving between counties resulted in pay cuts. Do you know anything about this?
  4. One reason the 401k world will never be as bad as the 403b/457b world is...I can and do quit my job every few years and rollover to a low cost vendor. I feel for teachers stuck in a district with no real choice to quit, unless they’re ready to move.
  5. I’m definitely a tightwad, although I haven’t heard that term in quite a while 😀 Allow me to limit my comments to the legitimate, ethical, and rare advisors who are willing to sign fiduciary paperwork with their clients. If they’re doing their job correctly, then all they’re doing is telling you to buy total market index funds and encouraging you to max out your tax advantaged accounts. These folks are professionals and require a professional’s salary...that’s a lot to pay somebody for something I could teach you in 15 minutes. While I’m clearly opposed to exploítative “advisors”, I also don’t see a role for legitimate advisors because the elementary services they offer (which is freely available in communities like this one or bogleheads) simply isn’t worth the price. Perhaps the one exception is if you’re into all kinds of shady business deals or rare circumstances and you need a professional to work the system for you...I’ve never met anybody in those circumstances.
  6. Just my opinion: don’t let anybody (even yourself) push you towards making a time sensitive financial decision. Walk away every time and make the decision when you’re good and ready. If the “opportunity” has expired by that time then you most likely dodged a bullet. If you ask questions I will happily provide direct answers. I don’t feel comfortable definitively telling you that Aspire is your best option because I haven’t personally researched every vendor on the list and I’m not sure if you also have access to 457b plans (especially the NY state variant). However, I feel entirely comfortable in definitively telling you that using Aspire and the funds I referenced on my site is going to be massively superior to anything an “advisor” would put you in. It isn’t even close. I also feel comfortable telling you that even if you’ve got a great 457b, it cannot be that much better than the Aspire 403b. So if you’re just overwhelmed and can’t get to it, then investing through Aspire is an entirely reasonable middle ground until you find more time to get into it. I should also mention that maxing out your IRA (6k/year) is a great thing to do as well...and it takes almost no effort relative to this 403b/457b mess. I’m not sure if I linked you to my Investing 101 page, but it takes five minutes to read and gives you virtually all of the knowledge you need. The industry makes this appear far more complicated than it actually is because they want you to hand the keys over to them. I’m happy to guide you through all the nonsense.
  7. What I preach is: 1. Vanguard and Fidelity are tied for first place in the 403b space. 2. Any changes I make to my portfolio are done slowly. So I am following my approach. I expect to own Fidelity’s ZERO funds after another year or so. If Fidelity were to raise the price, I’d simply exchange them for something else. Easy. There is no evidence to suggest that Fidelity is being dishonest about anything. ...Fidelity is able to generate revenue from a ZERO fund due to securities lending.
  8. I say they’re lower because you can build a fully diversified portfolio at Fidelity with a lower expense ratio than you’d get if you did the same thing at Vanguard.
  9. Best to stay out of that advisor loop 😀 I’ll happily provide sound information and data for free to anybody who feels the need for an advisor, but prefers to keep their money in their pockets. ...plus I hope everybody knows that an advisor is NOT required to act in your best interests and is almost always incentivized to act against them!
  10. I think a couple 0% funds are enough to sustain my lifetime investment needs and if not I can just as easily purchase another type of fund from a different vendor. I will agree with the sentiment that saving 0.06% per year is far less important than things like maximizing income, maxing our tax advantaged accounts, properly assessing your risk profile, and so on. However, if you’re doing all that then why not take the extra 0.06%? I’ve read people wondering if Fidelity’s ZERO funds will be as tax efficient as Vanguard’s. I’m wondering that too, but it really only matters in a taxable account. I’ve also wondered what would happen if Fidelity shut down the funds because they were losing too much money on them. Again, that’s only consequential in a taxable account. My biggest concern is whether or not Fidelity’s funds will properly track the total market because one of the ways they save money is by NOT tracking a pre-existing index. They’re essentially following their own index (or so I read). I’m not sure how to evaluate the quality of the index. Maybe just review a long enough track record of performance?
  11. I agree with you and that’s exactly why I used the word arguably. No real conflict between our opinions. I also share your instincts about the culture (to a reasonably large degree). However, it is an undeniable fact that Fidelity’s 403b fees are roughly half of Vanguard’s (which you’ve correctly characterized as already being very low). However, I would give some handholding to a rookie because, as we’ve discussed in previous threads, Fidelity does things like have two types of target date funds—one is good and one is quite expensive. Vanguard has nothing of the sort. At the end of the day my web site has Fidelity and Vanguard listed as tied for first place because I’m unable to decide who is best. If Fidelity’s prices were greater to or equal to Vanguard then I’d be comfortable naming Vanguard the winner...but Fidelity’s prices are lower.
  12. Is a 0% fund a good deal? Of course. I will more than likely own the Fidelity ZERO funds in a year or so. The only reason I don’t own them now is because part of my financial strategy is to always move slowly and cautiously.
  13. The best provider is the one that allows you to build a fully diversified portfolio for the lowest price. In practice that means the vendor with low fees and total market index funds. The only vendor that is arguably better than Vanguard is Fidelity...so you’re very fortunate to have Vanguard! The gap between them and everybody else is large. I documented the Vanguard plan here. Your question was fairly basic leading me to believe you might have some other fundamental questions. I wrote an Investing 101 page that might help you. Please come back and ask as many questions as you need (how to pick the right funds, how to split money between stocks/bonds, and so forth).
  14. I just wanted to add a bit of context. Fidelity allows you to build a fully diversified portfolio for 0.03% (or 0% if we’re talking outside of a 403b/457b). Vanguard does the same for 0.06%. In my opinion anybody charging more than 2-3x those rates is clearly taking advantage of you. It is true that some folks have been charged 30x those rates, but that shouldn’t excuse less severe price gouging. We wouldn’t happily accept a 2-3x markup on any other product...I see people curse when gas goes up by 0.5x.
  15. I want to second what whyme said about 457b plans and state sponsored plans. I’m not familiar with every vendor on your list, but I strongly suspect Aspire is your best option. I’ve rated it the 4th best plan that I’ve studied. Read about Aspire here. You can build a fully diversified portfolio for 0.21%. That isn’t the best plan out there but it is somewhere between reasonable and good. Over 30 years that 0.21% fee consumes (approximately) 9% of real returns...since you switch jobs from time to time, you’ll likely give up much less to fees.
  16. If anybody does the work, please post the options and fees of the self directed portion of the plan. That way when people google it they can find the end result on this thread.
  17. I only skimmed the 30 to 40 page PDFs. I didn’t see what the fees and options were in the self directed option. You’re right, that option must be explored.
  18. They’re half right. People do want a person to guide them, but they have no idea what that ends up costing them and are therefore largely incapable of making a decision about the trade off. I suppose that may be true assuming they don’t have a personal moral/ethical obligation that they’re trying to fulfill. The only people teachers can reliably count on to fix this is themselves. This is just more data to support my hypothesis that people (teachers, administrators, school board, etc) are ignorant and generally disinterested even if they themselves are paying the price. This sounds really negative, but it’s actually quite good. It is easier to deal with this attitude than it is to deal with outright corruption or ill intent. If teachers get together, these people can be made uncomfortable and/or enlightened enough such that action is taken. If you weren’t retiring I would have said: I wouldn’t give up. This would only make me amp up the pressure by getting teachers on my side to force change.
  19. It is interesting that the county seems to have a single 403b and 457b vendor. On its own, that would be a good thing because it minimizes confusion. However, the single plan being offered is rather bad. If I were in your shoes (and I was at one point), I’d push to reform the plan. The single Vanguard fund is actually great, but everything else ranges from slightly bad to awful. I don’t know what your preferred asset allocation is, but personally I would strongly consider exclusively using the Vanguard fund and use an IRA or my spouse’s account to hold my international and my bond funds. I’d be willing to compromise on my ideal asset allocation if it meant rock bottom fees.
  20. Security Benefit’s NEA DirectInvest is an elite 403b plan and it’s your best option. I’m enrolled in it. I documented the plan here and I documented how I enrolled in it here. Unfortunately, it isn’t offered as a 457b. If you can max out your 403b, IRA, and every other tax advantaged accounts then PlanMember Direct is your best option for a 457b. I documented that plan here. ...how did we miss this post from all the way back in April?
  21. EdLaFave

    Crying Poverty

    I know you’re not judging anybody in a negative way. I like the articles you link to. I’m just reacting to how this article made me feel on a personal level. If the author is going to discuss poverty and responsibility then IMO he must simultaneously acknowledge the realities of our economic structure. As my mom once told me, “I know it’s not fair, but this how you can get by playing their game.” I grew up on the higher end of poor and worked with pretty poor people. I now have a fancy job and work with people who are decidedly not poor. The poor people worked much harder and were less wasteful (not that they had much choice). It felt like this article was too focused on individuals’ mistakes. I’ve watched a political party echo that message as they’ve transformed the rules of our economy towards inequality (sometimes in a bipartisan way). They blame my generation’s circumstances on our desire to have avocados and toast for breakfast rather than on the structures they’ve intentionally built. They tell us our collective circumstances are a result of our flawed character rather than the system we were born into. This article reminded me of that type of argument because it was one sided.
  22. EdLaFave

    Crying Poverty

    Great to have you back Tony. Two principles: everything/everybody is interconnected and we lack the balance we require. Yes the individual should take responsibility for the decisions they make. At the same time, we aren’t born with the belief that our value as human beings can be measured by the things we own. We aren’t born believing that things are just as important (if not more so) than people. This is something we’re taught at an early age and we are social creatures who are heavily influenced by everything around us whether we want to accept it or not. I’d feel a bit foolish scolding somebody (whether they’re blowing their $1,000/year surplus on shoes or blowing their $100,00/year surplus on a boat and vacation home) too thoroughly for trying to attain success in exactly the way society has defined it for them. At that point I think it would be more useful to have a discussion about whether these purchases bring them anything more than fleeting happiness and what they’re giving up in exchange. I’d feel incredibly foolish scolding low wage workers who literally don’t have enough to survive when you can clearly see that over the last forty years nearly all of the wealth has shifted to the top. If I ever talk to an individual, I focus on what they have control over (personal responsibility). If I ever talk to a group, I focus on what they have control over (economic structures and values).
  23. I’m too lazy to type much, but I got Vanguard and Fidelity added to my wife’s district. Nobody helped me and I wasn’t even an employee. This is achievable. I can help.
  24. I’m confused because I don’t know what an aggregator is and I don’t know what GWN stands for. Didn’t take the time to google, sorry. I’m also confused by you saying that you already have a SB account, but SB isn’t an approved vendor. It would seem you couldn’t have the former without the latter. Aspire is an entirely different vendor that is separate from SB.
  25. Thanks. I’m trying to find time to improve the software, the two big ones: 1. Model social security and possibly pensions. 2. Instead of just calculating a specific outcome if you follow a specific strategy, I want to determine the best outcome by having the software examine a variety of different strategies (take SS early, go beyond the 0% bracket on Roth conversions, etc). ...I haven’t gotten into the Mega Backdoor Roth. My software models Roth conversions. I personally only fully understand the regular Backdoor Roth, I haven’t had the energy to learn the Mega Backdoor Roth yet (maybe never will).
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