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Paige

PLEASE HELP!! Young teacher with a 403b

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"Have you been listening to Dave Ramsey?"  I'm chuckling at that response.  These guys are friendly and personable, but make no mistake they are ripping you off.  The standard to sell insurance is very low.  He is not acting in your best interest and none of his plans are cheaper than Fidelity or Vanguard.

 

 

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On 9/30/2019 at 9:02 PM, Paige said:

If you go direct to Vanguard you can only use vanguard funds, so you limit yourself and pay the same costs. 

You won't pay the same costs and you won't be limiting yourself. Vanguard has a a wide array of  dirt cheap fund options. The only limitations with Vanguard is when you go through a third party or middleman. They may only offer a few Vanguard funds on their menu and you can bet you will pay more.Vanguard funds have everything you need. Most mutual funds are repetitive in their offerings and offer no better value or diversification  than basic Vanguard Index Funds. There are only so many stocks. Mutual Fund companies  just rewrap and rebrand basic stock funds to sound exciting and better and charge you more for them. They are not better. They are worse. Even a basic index fund will cost too much  when going through an insurance company making it not worth buying. They might try to persuade you by showing that their fund outperformed a vanguard  index fund but you have to look long term to see that low cost funds outperform higher cost funds overtime significantly. In fact index funds out perform 80% of all funds.

On 9/30/2019 at 9:02 PM, Paige said:

There is a big misconception that Insurance companies charge excessive fees.

No misconception. Its fact

On 9/30/2019 at 9:02 PM, Paige said:

 

 

On 9/30/2019 at 9:02 PM, Paige said:

Some of our plans are cheaper than Vangaurd & Fidelity. It just depends on the type of plans you are choosing

I can maybe believe some Fidelity Funds might be more expensive in certain instances but their basic index  mutual funds are very very cheap. I doubt anything Mass Mutual offers can be as cheap as Vanguard's  direct overall landscape in a 403b product.  I notice he mentions 401k. It's a different ballgame there. 403bs don't have the same protections as 401k's.

On 9/30/2019 at 9:02 PM, Paige said:

Have you been listening to Dave Ramsey?

 

Dave Ramsey gives good basic financial advice but I'm not sure he is the best source for investing specifics. But he beats anything an insurance salesman might tell you.

These insurance  guys either actually believe what they are saying because they've been trained that way or they are dumb as a rock or good liars. Its probably a combination of all three.  Mostly because their interests don't align with yours you would be well served to avoid them.

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17 hours ago, tony said:

You won't pay the same costs and you won't be limiting yourself. Vanguard has a a wide array of  dirt cheap fund options. The only limitations with Vanguard is when you go through a third party or middleman. They may only offer a few Vanguard funds on their menu and you can bet you will pay more.

No misconception. Its fact

Vanguard funds have everything you need. Most mutual funds are repetitive in their offerings and offer no better value or diversification  than basic Vanguard Index Funds. Mutual Fund companies  just rewrap and rebrand basic stock funds to sound exciting and better and charge you more for them. They are not better.

I can maybe believe some Fidelity Funds might be more expensive in certain instances but their basic index  mutual funds are very very cheap. I doubt anything Mass Mutual offers can be as cheap as Vanguard's  direct overall landscape in a 403b product.  I notice he mentions 401k. It's a different ballgame there.

Dave Ramsey gives good basic financial advice but I'm not sure he is the best source for investing specifics.

 

These guys either actually believe what they are saying because they've been trained that way or they are dumb as a rock or good liars. Its probably a combination of all three.  Mostly because their interests don't align with yours.

Hi Paige,

What Tony said in response to this insurance agent should be on unions and school district bulletin boards all over the country. This is the topic that the financial literacy community needs to cover also. It's one thing to learn the investment basics at a one or a two day workshop or here on this discussion forum, but when people go back into the world, there are a heck of a lot of predatory insurance agents who are paid to obfuscate and steer people to their terrible insurance products, under the impression that you can have your cake (high returns) and eat it too, (costly guarantees not to lose money in the stock market).

To top it off, there are plenty of savvy investors (unfortunately) who reject the passive investing strategy which is a boring low-cost fully diversified portfolio. These folks still think that either they can pick individual stocks or pick an active-manager of their mutual fund who can pick them so they can beat the market. 

It's a tough world out there!  Where do you turn for objective information or genuine help? Self-education is 99% guarantee that you can protect yourself: It takes time and some effort to discover how to invest without an adviser, but its soooooooo worth it! 

Tony's responses to that sales pitch are pure genius. You came to the right place Paige.

Steve

PS stay tuned. I will be posting my year-to-date "BORING" fully indexed and balanced between stocks and bonds portfolio soon. It's the quarterly report time! 

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