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Lightguy

Smith Barney 403b

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A free fixed annuity...Thank you Joes for the lead...however I am generally suspicious of annuities that come from companies that continually have to pay fines without admitting wrongdoing like CitiBank. Perhaps I have been wrong all along...The only honorable thing to do is to resign as agent for TC and V Funds, and get a new set of buddies...How bad could a company be that has Barney in its name? Come back Joes, come back.......

 

 

 

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Thanks for all the great info guys! You all have been a huge help. Thanks for the book refrences, I ordered a couple of them that some of you had mentioned. I have a meeting with Smith Barney tomorrow, the guy at smith barney is a friend of mine, so im just gonna go in and meet with him and see what I can learn and gather some further useful information and decide whether to go with SB or Vanguard... I am also planning to start a roth IRA as soon as im done getting my 403b set up...

 

I found out that my employer will only meet the whole whopping $250 a year HAHA! what a joke!

I'm only 20yrs old and i know pretty much nothing about investing...yet!! so i got sometime to keep learning!! Hopefully my 403b and my ira should be a good start

 

THANKS AGAIN!

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20 years old and you are starting already. Very impressive, Lightguy!

 

When you meet with the Smith Barney rep, be sure to ask for full disclosure of fees, and how the rep is compensated. Then compare those fees to Vanguard's. At that point, you need to decide whether the advice/service offered by the rep is worth the cost in additional fees.

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Guest Sierra

Someone mentioned the John Bogle book as a source of information. It's a good read, but since Bogle is the founder of Vanguard, I think I can spare you the suspense as to which of the three companies HE would recommend...

===============================================

Bogle is not pushing The Vanguard Group----he is pushing The Vanguard Group's business plan and how the "plan" benefits the investor over a lifetime of work and retirement. This "business plan" is adopted by all plan sponsors that recognize that costs matter and matter a great deal. Among Bogle's "buddys" are the Federal Thrift Savings Plan, The DC Plan of the Florida Retirement System, The Deferred Compensation 457(b)/401(k) Plans of the State and City of New York and the TIAA-CREF system which was founded 58 years prior to The Vanguard Group.

 

Peace and Hope,

Bogle's buddy Joel

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Someone mentioned the John Bogle book as a source of information. It's a good read, but since Bogle is the founder of Vanguard, I think I can spare you the suspense as to which of the three companies HE would recommend...

===============================================

Bogle is not pushing The Vanguard Group----he is pushing The Vanguard Group's business plan and how the "plan" benefits the investor over a lifetime of work and retirement. This "business plan" is adopted by all plan sponsors that recognize that costs matter and matter a great deal. Among Bogle's "buddys" are the Federal Thrift Savings Plan, The DC Plan of the Florida Retirement System, The Deferred Compensation 457(b)/401(k) Plans of the State and City of New York and the TIAA-CREF system which was founded 58 years prior to The Vanguard Group.

 

So this "business plan" benefits the investor, but doesn't benefit Vanguard at all? Vanguard makes no money at all? Amazing that they stay in business...I really DO want to read this fascinating "business plan"!

 

It's that first sentence that really gets me, though: "Bogle is not pushing The Vanguard Group----he is pushing The Vanguard Group's business plan..." Set aside for the moment the fact that I never said Bogle was "pushing" the Vanguard group, merely that given the choice of Vanguard, Smith Barney and Primerica, Bogle would indeed opt for the company he founded. (Am I wrong about that?)

 

I only wonder at the gales of laughter that would follow if I suggested that my 403(b) rep wasn't pushing his own company, honest...just their business plan. But of course we can say such things with a straight face about the Blessed Virgin Bogle, right?

 

Lastly, I would point out that you cite four examples of large plans that follow your ideal plan and go with this "business plan." Need I point out that there are literally hundreds, if not thousands, of plans that have opted with a different approach? And no, I'm not suggesting that they're all right and your Chosen Four are wrong, or vice-versa...merely that there is room for disagreement and honest debate about it.

 

 

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I met with my guy at Smith Barney and heres what he thinks I should do. Since my employer is only going to match 250 a year, that I should start a Roth and max it out, then if Im still wanting to invest more open up the 403b...

 

ALL OF THE FEES FOR THE ROTH ARE: a costodial fee of $40 a year (which i think can be waved once i get a decent chunk of change in there) and a Investment fee (c share) of 2.5%

 

Is that okay or not.... I really like the idea of having somebody help me out. I am going to have this money in the market for a long time and I like the idea of having a local professional (who is also a friend) help me out with it. I have a lot to learn and it makes me a little more comfortable. I still plan to be very involved especially as I learn more but do you guys think its worth paying for it?? Or can i get cheaper help or is that average for a broker or consultant or whatever their title??? Thanks for the help

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Guest Sierra

Assume Vanguard and Smith Barney offer the same fund. Vanguard charges 0.50 percent and Smith Barney charges 2.50 percent. You invest $2000 (just once in 2005) with each company and each returns 10 percent per year for the next half century. On your 70th birthday how much money do you have with each company? If you need assistance in doing this calculation please let us know and we will post the results.

 

Peace and Hope,

Joel

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Guest Sierra

Lightguy:

 

How are you making out with the calculation? After you do the arithmetic exercise you will understand when I say that buying no-load as opposed to paying your Smith Barney guy, is akin to... "a bird in the hand is worth two in the bush".

 

Peace and hope,

Joel L. Frank

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How are you making out with the calculation? After you do the arithmetic exercise you will understand when I say that buying no-load as opposed to paying your Smith Barney guy, is akin to... "a bird in the hand is worth two in the bush".

 

We'll conveniently ignore the fact that the Smith Barney guy was the SOURCE of this guidance, without which Lightguy would never have been inspired to make a Roth contribution in the first place.

 

Up to you, Lightguy, to decide whether the guy who has just provided excellent advice is worth compensating for it, and how much is too much.

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Not to mention many annuities offer benefits such as principal guarantee( a guarantee that you do not lose money in a down market).

 

If you are older you probally want to look at a fixed annuity which are currently paying close to 5% per year guaranteed.

I almost choked when I saw this post...

 

There are no fixed annuities paying anywhere near 5%. Sorry, it' just not happening. There are some that are paying in the 4% range but most of those include a bonus which is only good for one year. These companies are "buying business" plain and simple.

 

I have a real problem with Variable Annuities that offer "Guaranteed returns". These GMIB riders are the ONLY riders I know that, the less valuable they become for the client, the MORE they cost. You'll pay .50bps on the TOTAL VALUE of your account for a guarantee of 6%(approx) that in many cases you have to annuitize to get. A couple of good years and the guarantee becomes worthless to you but your paying MORE for it. Yes, you could have bad years too, your kidding yourself if your thinking of investing in the stock market without experiencing temporary cyclical declines - That's why asset allocation is important.

 

There's no magic pill, no secret formula, no "stock market gains without the risk" and no "target" fund that is going to magically take the risk out of the market. if you can't take the heat...

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