Jump to content
Sign in to follow this  
JMacDonald

Unhappy Ing Client At M*

Recommended Posts

Guest Sierra

It's possible that this is because unhappy people are far more likely to complain than happy people are to boast about how happy they are. True on chatboards everywhere, not just 403bwise. :)

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

You profess to be quite happy with your 403(b) VA. So I guess you are an exception to the rule that happy people do not tell others that they are quite please with their investment strategy.

 

Joel

Share this post


Link to post
Share on other sites

Dear Mr. French, Your post is well written, and it may be or may not be true that an employee would invest five years earlier with a load provider(but, I would agree that these employees would invest earlier with a load provider. only because the vast majority of providers of 403b are through load industry providers(and the novice investor does not have enough knowledge to seek out the more preferable no load provider). If industry regulations would change, which I hope that they will, this proportion would change.

 

I beleive that your analysis can be more complete. That "Ira" who started contributing to a 403b, five years later, he will have in his 403b at 9% after 15 years of investing $102,000 , and "Mr. French " who invested in a 403b for 20 years at 8% had $146,000 (the difference in return is at least 1 percent); "Ira" had 70 % of assets in the 403b versus the longer term asset accumulation, with each year the proportion of assets "Ira" has invested increases versus the 20 years investment until at some time in the lont term future they will be equal.

 

I know someone called "Ira" who was frugal and wanted the best deal, and like in the case that you presented, but was not knowledgeable enough to find a low cost provider at a price that would be low enough for him, so he invested the money that he had in other opportunity where he thought he would get a good deal, first he bought some property in Fla. about five years ago, and it went up; not knowing about the tech crash of 2000 because he was not knowledgeable and didn't have a load fund salesman to guide him, he then deicided to invest in Google, because used the producrt,and got a tip from somebody; anyway Google went up a lot. Anyway, he now has lot a resources that he accumulated during the first five years that need to be added to his pile, after he uses some of it for a world cruise. Anyway "Ira" has a lot more than "Mr. French".

 

Actually, in my own case, when I started to invest in the 60iest, IRA's were not around until about 5 to 7 years after I started working, so I looked around for investments, and invested in a few stocks, only one of them was successful. It was called Lin Broadcasting which at the time I bought for 29. Anyway it turned out to be a 20 bagger, and keep spliting, until about 20 years later ATT acquired them. Frankly when I bought I didn't know much about them, but as it turned out they researched and developed stuff about cell phones. Anyway, althought the investment was not tax deferred, but they did not offer dividents for the first 20 years, it appreciated greatly, and turned out to be one of my most successful investments, more so than those that I researched at a much higher level.

 

Anyway, I feel that you have ommitted any potential investment that "Ira" made during the first five years because he was prudent and looked for an ivestment that offered an optimal return.

 

Ira

Share this post


Link to post
Share on other sites
Guest TR1982

This is the Monday morning quarterbacking I love on this site. So, Ira, why don't you just dispense your unfailing advice for free and we'll all be rich? Where should we invest next?

Share this post


Link to post
Share on other sites

IRA, just imagine an agent, whom we will call "French Teacher" and he doesn't have many friends but does have clients who he overcharges for many years because they believe his rap about annuities...he knows what he is doing, in fact he is very proud to make his money that way because if he didn't "someone else would". Then he finds a friend, we could just call him "TR1982". They are friends because they like the idea of supporting the financial institutions as loyal fans, truly believing that giving them money to invest and paying through the nose somehow makes them part of what makes America and capitalism great. The moral of the story: it is great to have friends. Dan

Share this post


Link to post
Share on other sites

TR

 

"So, Ira, why don't you just dispense your unfailing advice for free and we'll all be rich? Where should we invest next?"

 

OK, I'll be glad to help you, invest in no load low cost index funds. Contact Vanguard.

 

Ira

 

 

Share this post


Link to post
Share on other sites
Anyway, I feel that you have ommitted any potential investment that "Ira" made during the first five years because he was prudent and looked for an ivestment that offered an optimal return.

 

 

Fair point. My guess is that someone who's smart enough to look for an investment like the one you describe is also smart enough to start investing for his/her retirement, unprompted by an agent. I do agree that if we both start at the same time, and you're outearning me by 1% a year, all other things being equal, you win. My point was that working with an advisor has made all other things UNequal, and that I've gotten a huge jump start on what I would have saved had I not had this advisor talk to me. That has, indeed, made it worth the price of admission.

Share this post


Link to post
Share on other sites

Thanks to the posters here for an interesting back and forth. Since I am the new poster referred to earlier by TR1982, I felt I should add these comments:

 

First, you are correct to note that I have entered this site on a somewhat sour note of complaint about my Variable Annuity. I will show you why with numbers in a second.

 

I should add first that I don't really see myself as neglectful or ignorant of the basics of investing. By making the right choices with a paid-for investment property and DRIP-invested blue-chip stocks, I feel quite fortunate indeed to be ready, at age 52, to take an early retirement with the New Jersey State teachers' pension system.

 

It is with the VA that my problem lies. I have enjoyed its tax benefits and contributed a total of $70,000. to it over 15 years, admittedly with the largest contributions coming in the six years since '99. In the two examples offered above, the hypothetical $2,000 per year ($30,000 in all) grew to $58,000. or $54,000 respectively after 15 years. My total right now? Just over $90,000.

 

Hence, my Monday morning quarterbacking has me bellyaching precisely because I have come to find out in the 11th hour that this account has performed poorly not because of disappointing market returns or misallocations but because Valic's fees have eaten away at the returns I would have otherwise realized. At no point along the way has anyone pointed out to me that this was the case until very recently.

 

Of course, I have ultimately no one to blame but myself for being in the dark for so long about this account. Hence, my expressed appreciation for discovering this board, as mentioned, 'better late than never'.

 

Best wishes,

James P.

 

Share this post


Link to post
Share on other sites
IRA, just imagine an agent, whom we will call "French Teacher" and he doesn't have many friends but does have clients who he overcharges for many years because they believe his rap about annuities...he knows what he is doing, in fact he is very proud to make his money that way because if he didn't "someone else would". Then he finds a friend, we could just call him "TR1982". They are friends because they like the idea of supporting the financial institutions as loyal fans, truly believing that giving them money to invest and paying through the nose somehow makes them part of what makes America and capitalism great. The moral of the story: it is great to have friends. Dan

 

It's a cute little fiction, Dan, unsupported by facts as it is.

 

Is there any post anywhere where I have even hinted that people should support financial institutions as loyal fans? Or pay through the nose in order to support capitalism? Or just pay and pay and pay without expectation of anything to show for that money?

 

Of course not. But the straw man arguments are SO much easier to win. So by all means, have at it.

Share this post


Link to post
Share on other sites
TR

 

"So, Ira, why don't you just dispense your unfailing advice for free and we'll all be rich? Where should we invest next?"

 

OK, I'll be glad to help you, invest in no load low cost index funds. Contact Vanguard.

 

Ira

 

Cool. Is this gonna be one of those "20-baggers" you were talking about? :-)

 

On a serious note, if there is genuine interest, I'd love to start a new discussion (in the "General Money Topics" section, perhaps) where we could share promising stock picks and see what transpires over the months and years. Could be fun.

Share this post


Link to post
Share on other sites

Hi James,

You are to be complimented by admitted that you made a mistake. It takes a lot of courage and integrity to do this. We all have made mistakes in our quest to learn how to best manage our money. Even after I found out that investing in a fixed annuity was not the best way to go, I ended up in no load mutual fund companies. I was making money hand over fist as a result of the 90s tech bubble and thought I had leaned everything. Well, I learned that I made another mistake, this one was more painful, by over loading in tech sector funds and subsequent lost most of the growth in the bubble. After two major mistakes, I now have all of my money in two companies, TIAA CREF and Vanguard and it’s diversified across several asset classes. What I can say is that I did not panic and sell out at the very bottom. I knew that this was long term and that sooner or later the market will recover. And it did. Today my portfolio has recovered and is on the right track. Because we have two properties in California, my partner and I are now just about back to where we were five years ago. Point is to learn from your mistakes, do not run away from them.

It is in my sincerest desire that you too will learn a great deal from your experiences both good and bad so much so that you can save your current nest egg and move on.

Good luck,

Steve

 

Share this post


Link to post
Share on other sites

Mr French,

 

"I do agree that if we both start at the same time, and you're outearning me by 1% a year, all other things being equal, you win. My point was that working with an advisor has made all other things UNequal, and that I've gotten a huge jump start on what I would have saved had I not had this advisor talk to me. That has, indeed, made it worth the price of admission. "

 

"Is there any post anywhere where I have even hinted that people should support financial institutions as loyal fans? Or pay through the nose in order to support capitalism? Or just pay and pay and pay without expectation of anything to show for that money?"

 

You have been on this site for a while and are aware that the extra 1 percent plus a year that you pay inhibits greatly the amount that you will wind up with when you retire.

 

You say that you have paid the cost of admission which was worthwhile to you.

OK. Why do you continue to pay this cost of admission based on the above?

 

I heard when you said that the sales agent that you use helps you with other aspects of your financial life which might feel outweigh the benefits that you give up from your 403b which I can understand, and go along with. But on a 403b basis alone, you already have enough information to sucessfully act independently without an agent, and achieve greater returns than with your agent(even if he is a superstar as you claim).

 

 

"Cool. Is this gonna be one of those "20-baggers" you were talking about? :-)

 

On a serious note, if there is genuine interest, I'd love to start a new discussion (in the "General Money Topics" section, perhaps) where we could share promising stock picks and see what transpires over the months and years. Could be fun"

 

In all honesty, the success that I had with that stock was mostly by chance. The only skill that I used was buying more than one stock at the time(a small amount of diversification), reading a brokerage report about the stock), and holding on indefinately to defer buying and selling costs.

 

I realize that I do not have sufficient skill to outguess the market where there are many professionals who have a lot more skill in stock picking than I do, so I am content with indexing mutual funds, doing on the average a couple of percent better than active funds, and the total stock picking market over a time period.

 

I think that there might be sites available that discuss stocks. I know, for example that Value Line analyzes stock. Perhaps they have a site as Morningstar does for mutual funds.

 

Maybe others here may have an interest in stock selection in the General Money Topics part of this discussion group.

 

Ira

 

 

 

 

 

Share this post


Link to post
Share on other sites
You have been on this site for a while and are aware that the extra 1 percent plus a year that you pay inhibits greatly the amount that you will wind up with when you retire.

 

You say that you have paid the cost of admission which was worthwhile to you.

OK. Why do you continue to pay this cost of admission based on the above?

 

 

Ira, the numbers I ran beforehand clearly illustrate that EVEN IF I continue to pay 1% a year to an agent, I'll finish well ahead of where I would have otherwise. But no, I have no plans to continue paying out of blind loyalty. I continue to pay because I continue to receive my money's worth in financial advice, plain and simple.

 

I've said before, and I'll repeat here, that there may indeed come a day when I'll "outgrow" the need for financial advice, or when my balance will mean that my annual fee has "outgrown" the value of the advice I receive. That hasn't happened yet, but I'll be ready to move my money if/when it does. Contrary to the "straw man" argument posted by someone else, I haven't taken a blind oath of fealty to ING or to my advisor. But so far, he's been worth what I pay him, is all.

Share this post


Link to post
Share on other sites

James,

 

Like Steve and you, I also made some major investing mistakes. I didn't know that no load funds existed in th los angeles schools where I worked , and was sold a fund that was misrepresented to me by the agent. After a while, I switched to a low cost, no load mutual fund company.

.

Now that I know how these sharks work, and am successfully investing, I wish to share this information with others so they can avoid shark attacks.

 

Welcome to the site. Good luck in retirement.

 

Ira

Share this post


Link to post
Share on other sites
Guest Joel Lee Frank

On a serious note, if there is genuine interest, I'd love to start a new discussion (in the "General Money Topics" section, perhaps) where we could share promising stock picks and see what transpires over the months and years. Could be fun.

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

Suggestion: Take half of your ING VA and effectuate a 90-24 Transfer to Vanguard and manage it yourself for 5 years. At the end of the five year period compare it to the "advice" you took with the half that remained in ING. Should be fun.

Share this post


Link to post
Share on other sites

Suggestion: Take half of your ING VA and effectuate a 90-24 Transfer to Vanguard and manage it yourself for 5 years. At the end of the five year period compare it to the "advice" you took with the half that remained in ING. Should be fun.

 

Let's do it together: YOU take half of your Vanguard money and effectuate a 90-24 transfer to ING. Let them manage it for five years, and compare the results. Should be fun, indeed!

 

Better hurry on that 90-24, though...those new regs you love so much are about to ban them.

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...
Sign in to follow this  

×
×
  • Create New...