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Posts posted by EdLaFave

  1. You can search my history to find my answers to this type of question. Cliff notes (likely incomplete):

    1. Get an understanding of how well he understands the problem.

    2. Clearly explain the problem.

    3. Get an understanding of why they may not want to change after they now understand the problem.

    4. Offer a clearly defined solution to the problem and offer to do as much of the work as possible for them.

    5. Listen and respond to what is motivating this person...be so well prepared that you can respond to the unexpected on the fly.

    6. Go in expecting that this problem exists due to ignorance and/or not making it a priority, which is quite different than corruption or ill intent. 

  2. 2 hours ago, MNGopher said:

    I started at 20K back in 1990...Starting pay now in my district is about 40K

    That’s 39k in today’s dollars, so not much has changed. 

    2 hours ago, MNGopher said:

    Teachers at the top of the pay scale who also coach a few activities can now make over 100K.

    Presumably in MN? That’s a lot better than here in Orange County FL where the maximum base is 74k (not sure what you get for taking on activities, but you get 2-5k extra depending on how advanced your degree is).

    2 hours ago, MNGopher said:

    I can't complain too much about the compensation.

    I take your point, but if you feel the urge then complain anyways. 😀

    I’d like to see teachers paid as much (or at least in the ballpark) as our “respected” occupations (engineer, lawyer, doctor, finance, etc.). It’s just such an important job, even if it isn’t valued as such.

    I often wonder how much of this job will be automated away or augmented by technology/AI, but that’s a conversation for another day.

    19 minutes ago, whyme said:

    It dismisses basically all other priorities in pursuit of a nest egg, and uses dubious assumptions while doing it

    I couldn’t have said it better myself.

    Sometimes FIRE/personal responsibility arguments seem to get very close to arguing that there are two groups of people:

    1. Those who find happiness with poverty-level resources.

    2. Those who are wasteful and flawed in some way.

    ...those arguments always irk me because:

    1. With so much inequality I have no intention of conceding the notion that people should get comfortable with the existence of poverty.

    2. Money can absolutely buy happiness in many ways. I’m not interested in shaming people who want more out of life than a spartan existence centered around work and stretching a dollar to its absolute limit.

  3. 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?


  4. 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?

  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. 51 minutes ago, Patrick said:

    there's simply no way to assemble this information into a coherent body of knowledge while also working to make time-sensitive financial decisions

    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.


    51 minutes ago, Patrick said:

    I have enough homework to keep me busy for years, and as a doctoral student and full-time administrator, I don't know where I'll find the time. So that's how people like me come to rely on advisors. I'm not saying I've made that choice, but between now researching 457bs, learning about 403b plans, comparing vendor charges (which aren't posted anywhere publicly), and then trying to figure out what exactly I'm supposed to do once I start the sign-up process for some of these services, I'd really just as soon get some help.

    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. 

    51 minutes ago, Patrick said:

    that takes me right back to step 1: staring at a million options I don't really understand, trying to find time I don't have to do homework that seems like it'll take months.

    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. 43 minutes ago, tony said:

    Maybe things have change as I've been out of the loop for  a while. I totally understand some folks value using an advisor when making financial decisions. I get that completely as long as they get the right kind.


    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!

  9. 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?

  10. 1 hour ago, tony said:

    I must disagree with this with all due respect to Ed...Fidelity is only better than Vanguard in only a very very limited way.

    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. 

  11. On 5/31/2019 at 10:02 AM, Kelly Engelman said:

    How do I choose the best 403(b) provider?

    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).

  12. 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. 

  13. 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.

  14. On 5/31/2019 at 4:22 PM, MoeMoney said:

    The superintendent feels strongly that people want to talk to a person and would choose a 403b product despite the costs

    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.

    On 5/31/2019 at 4:22 PM, MoeMoney said:

    He also feels no obligation to inform employees of the existence and availability of the 457 plan

    I suppose that may be true assuming they don’t have a personal moral/ethical obligation that they’re trying to fulfill.

    On 5/31/2019 at 4:22 PM, MoeMoney said:

    He refuses to consider hiring anyone to educate staff on it.

    The only people teachers can reliably count on to fix this is themselves.

    On 5/31/2019 at 4:22 PM, MoeMoney said:

    He alluded to the fact he was unaware of its costs but grateful they both saved in their 403b and 457 plans.


    On 5/31/2019 at 4:22 PM, MoeMoney said:

    my principal understood he is paying high fees (and his wife) and knows why his accounts are not going up as expected. But he does not/has not taken action

    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.


  15. 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. 

  16. 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?

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