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- Most attempts at beating the market will fail.
- Most people end up with below-average performance, on account of psychological factors.
- The main role of an investment advisor at the retail level is to serve as therapist, to prevent retail investors from doing stupid things for emotional reasons.
- Sometimes such therapy is essential.
- Professional advice is far more useful for tax-questions, where the practical consequences are far more complex than the principles, than for investment-questions, where the basic principles account for 99% of the practical consequences.
Recently I've been doing some introspection regarding tax consequences, along the lines mentioned by Mathjak. The upshot is most unpleasant. If growth-predictions are to be believed, I'm going to be one tax-fleeced old man, unless some preventative maintenance is implemented.
It's amazing how much advice is available for free, especially once you've crossed some thresholds at the major investment firms (Fidelity and Vanguard being the prime examples).
I've internalized the first point, but feel ignorant on the latter points. Do you have suggestions on where to learn the basic investment principles needed for retirement? Also, it sounds like tax implications are the important thing to consider--what kind of professional would I want to engage to help with planning? What is available from Vanguard, for instance?
ed slott's videos are a good start. there are so many ways that the products we loved to hate come back in to play later in life and are the very same products that at one stage cost us money, now they save us money. ironic isn't it.
who would have ever 'thunk" putting more money into a permanent life insurance policy then we have to and over funding it would have ever been a great idea. but for your safe money in retirement it would have been a fabulous idea.
you could have overfunded the policy by one dollar below the mec limits and had no fees or commissions on that money , tax free interest and borrow it out as a source of tax free income later on possdibly keeping your ss below the taxation limits.
this is what real tax planning involves and it requires more knowledge then i or anyone else here has. you need to learn how to use all the tools available to us or find someone who does ,heaven forbid and pay for it..
the earlier on the structure for later starts the better the results.
the problem is we all run on myth and believing what we hear other misinformed people say and we get burned later on by not utilizing those tools we could have.
here are 2 videos to start. ed's books are excellent places to learn as well. ed is the guru of retirement tax planning. ed is a tax advisor who specializes in retirement tax planning
I don't particularly care for this Ed Slott character's folksy, showman tone. It comes across as being condescending and aw-shucks populist. Still, I'm thinking of attending his seminars, just for the dating opportunities!
As for basic investment principles, my favorite is Burton Malkiel's "A Random Walk down Wall Street". But as with any reference-book or theory, there are controversies, rebuttals, and alternatives. Ultimately, how we invest is more contingent on our personalities, than on theoretical research or folk-wisdom.
I agree. It had a phony infomercial-like feel. Audience laughter at inappropriate moments. Knowing nods of heads and bursts of applause when he would make the most 'duh!' kinds of revelations. The whole spiel distracted me from whatever his message might've been, and it could've been quite valuable for all I know.
Quote:
Originally Posted by ohio_peasant
I don't particularly care for this Ed Slott character's folksy, showman tone. It comes across as being condescending and aw-shucks populist. Still, I'm thinking of attending his seminars, just for the dating opportunities!
As for basic investment principles, my favorite is Burton Malkiel's "A Random Walk down Wall Street". But as with any reference-book or theory, there are controversies, rebuttals, and alternatives. Ultimately, how we invest is more contingent on our personalities, than on theoretical research or folk-wisdom.
like most motivational speakers ed has to be an entertainer ,which i think he does quite well.
but don't let that performer front fool you. ed is a master of utilizing the tax laws in retirement planning and well respected by the planning community as the ira guru..
ed is local to us being here in long island but you can't even see ed as a client unless you have huge amounts of money as we tried .
ed only teaches today and instructs advisors all over the country in his methods as well as promotes his books and videos that try to give the public an insight in to how to play the 2nd half of the game where preserving what you grew the 1st half becomes key.
some of it is quite complex .
Last edited by mathjak107; 07-21-2014 at 03:20 AM..
well i did great as an investor but i did a lousy job preparing in advance to keep what i earned. the tax ramifications now of my structure will be painful tax wise to un-do and a lot of it i can't.
for the most part it is to late to un-do 35 years of bad tax planning ,but who knew from such things.
had i done things different and had guidence in my early years with no extra effort i could have been drawing 100k a year in retirement income and paying 1800 bucks in taxes while letting my social security grow and delaying it. instead that 100k will be taxed quite heavy as it stands on how i did it….
I tend to agree on the value of a planner, but would you have the same amount of money today if you prepaid the tax (say, by investing in Roth IRAs) instead of pay-as-you-withdraw?
With a few exceptions, mostly available to business owners (I am one), the Federal government gets its share one way or the other; tax strategies minimize, not eliminate.
I tend to agree on the value of a planner, but would you have the same amount of money today if you prepaid the tax (say, by investing in Roth IRAs) instead of pay-as-you-withdraw?
With a few exceptions, mostly available to business owners (I am one), the Federal government gets its share one way or the other; tax strategies minimize, not eliminate.
For someone my age (25) I prefer pre-paying tax.
Tax rates are the lowest they've been in decades. With the way things are shaping, I don't see them going lower. I'm betting they'll be higher when I retire.
Tax rates are the lowest they've been in decades. With the way things are shaping, I don't see them going lower. I'm betting they'll be higher when I retire.
I'm not much older but I actually max my 401k and Roth IRA. My earnings are decently high so I like the current benefit of the reduce tax bill now but also like having money in both sides of the tax game to increase my flexibility years down the road. As Mathjak has pointed out a few times a married couple could withdrawal a fair amount from their taxable iras at retirement at very min income tax rates
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