Jump to content
bucknuts

Newbie Question

Recommended Posts

Am I correct in assuming that I would find this "example" on any prospectus of any fund I was considering?

 

Yes. And they all use the same example. $10,000 initial investment with 5% return- what are the costs for 1, 3, 5, and 10 years. It makes the comparison rather easy. Every time you purchase a mutual fund they send you a prospectus-people need to learn to look at them PRIOR to making an investment. Unfortunately sales reps don't want you reading a prospectus because it brings up questions they don't want to answer.

Share this post


Link to post
Share on other sites

Correct me Marc if I am wrong that they are required to explain and disclose expenses in the prospectus. In fact I heard that there was talk about having companies to state all pertinent information in a shorter and simpler format. Of course that must not have happened. Some of my investment statements actually have that kind of chart right on the quarterly statement although others do not. It should be in my opinion stated on every statement you receive clearly and visibly.

 

Insurance companies are as Marc said very secretive. They even state their net asset values as units instead of shares that makes the process even more confusing because you can't easily compare the funds performance very easily.

 

Vanguard states all its expenses clearly in its mutual funds section online right next to its performance. They don't seem to have anything to hide. Like Marc and Steve

have pointed out it really is a dirty little business. Its so unfair to the little guy but big business would suffer if everything was revealed so the deceptive show must go on.

 

Its back to school for me Monday 4 more years. I HOPE I CAN MAKE IT.

 

 

Tony

 

 

P.S. I am using the edit function now so there should be some improvement in my word processing :)

Share this post


Link to post
Share on other sites

I believe you guys/gals. I was just reading how Shullo had to pay the surrender charges and lost 6K. I'm at a loss. I'm still trying to figure out what to do and at this point at 32, I have 24,000 sitting in there and I just want to take my 10% penalty and move on. I'll take that money, open a Roth IRA and put some money into the stock market with my uncle that knows a thing or 2 about it. I'm reading a book now about the stock market and feel I would like to dip my toe into the water. It can't be any worse than what is happening now. I would LOVE to be an advocate for your site and knowledge here in Ohio. I could start in my district. If you would give me the basic information that I EVERYBODY would know, I will do everything in my power to be your voice in Ohio. Thanks.

Share this post


Link to post
Share on other sites

There are 2 penalties. One is a surrender fee assesed by the Plan provider. Usually 7-8% for contributions made in the past year and then 1-2% less on a sliding scale for subsequent years. And then the IRS charges a 10% penalty for early withdrawal. Finally you pay 25% or 28% tax because that money coming out counts as income received. So after all that you are looking at a significant chunk of your savings going out the window-close to $8000-9000 by my math. You may want to consult an accountant or fee only advisor before doing something drastic. There are better strategies.

 

Disclaimer: I'm a fee only CFP. Your situation is what I do.

Share this post


Link to post
Share on other sites

1st investors tells me there is no surrender fees because that is wrapped in the 5% I am paying, but they also told me that I could keep my money invested with them with no expense charges. Everybody is telling me that is untrue so I don't know what to do. Was thinking I'd withdraw 1/2 this year and 1/2 next year to lower the blow as far as income. I've asked 2 different people there if it costs money to just keep the money in there and they so I will incur no more charges.....guess I may just leave it in and see if I do actually get charged....I'm starting a Roth now that I've stopped funding my 403 so I'll be ok. Wifes 403 is getting matched so she is going to have plenty of cash I'm thinking.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...