Author Topic: Help me, I am freaking out!  (Read 2941 times)

LilTazzy

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Help me, I am freaking out!
« on: March 09, 2020, 01:26:59 PM »
I am almost 42 years old and the current market volatility has been absolutely freaking out. Everyone here is so smart and savvy and I need your help!

I am a state employee and should receive a pension when I retire. (My state does have a well funded public pension). I would love to retire early, but believe I will need to work until I physically am no longer able (not because I want to, but because I will have to). About 2 weeks ago, I had about $86,000 in a Roth IRA and about $40,000 in a 457. Obviously, over the last 2 weeks I have lost a lot of money in both of these accounts. I have tried repeatedly to contact my financial advisor/stock broker to hopefully hear from a cooler head, but he has not answered or returned my calls and that makes me worry even more.

It has taken me a very, very long time to achieve the balances I did in both my IRA and 457 and I am absolutely petrified that I will lose all my money in both of these accounts. I know that these are considered "paper losses" but I am not savvy or smart enough to really take that to heart. I really want to transfer whatever money is left in these accounts to a CD, but I know that is not the move to make long-term, since I have such a long way to go before possible retirement. Any advice or words of wisdom would be appreciated! Thank you! :-)

Sibley

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Re: Help me, I am freaking out!
« Reply #1 on: March 09, 2020, 01:33:41 PM »
Deep breath. You're going to be ok.

DO NOT SELL.

As long as you don't sell, those losses are just on paper. You haven't really lost anything. This is how it works: when you buy, you're buying shares. So if you buy 1 share of stock at $100, then your value is 100. But if the market value changes, then your value also changes. However, you still own 1 share. So, you have however many shares that a few weeks ago were 86k, and now they're worth much less. But if you look at the number of shares, that hasn't gone done.

Your broker is probably getting calls from everyone, that's why you haven't heard back.

Google "J Collins stock series". Read that, all of it. It'll help you understand more about the stock market and how things work. Education is good, and it'll help you calm yourself.

Also, turn off the news. Turn off any notifications you get about what the markets are doing. Stop checking the balance. Just live your life. Go to the library and get a good book to read or something.

BECABECA

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Re: Help me, I am freaking out!
« Reply #2 on: March 09, 2020, 01:36:31 PM »

OtherJen

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Re: Help me, I am freaking out!
« Reply #3 on: March 09, 2020, 01:37:55 PM »
I am also almost 42 with no plans to retire soon. I second everything that Sibley posted. Panic is what is causing the market volatility. The trick is not to get caught up in it yourself.

Villanelle

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Re: Help me, I am freaking out!
« Reply #4 on: March 09, 2020, 01:42:28 PM »
Stop.  Looking at them.

I honestly have no idea how much I've lost.  You know that you don't need that money right now.  You have no need to know what has happened to the value.  It would have been better to never allow yourself to look, to never allow yourself to put a specific number to what was just "down market".  You can't unring the bell, but you can at least stop ringing it and remember this for next time.

This is also why it is good to an an Investing Statement when you write down what you will do when.  It becomes a commitment to yourself, and a plan that helps you stay the course because you aren't allowed, according to your own plan--made calmly and unemotionally during a time of calm--doesn't allow for it.

Dogastrophe

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Re: Help me, I am freaking out!
« Reply #5 on: March 09, 2020, 01:44:40 PM »
Best thing to do is turn off the TV, stop reading financial news, stop listening to everyone around you who are in full panic mode, and go for a coffee / walk / run / etc.   Personally I wouldn't sell

Tester

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Re: Help me, I am freaking out!
« Reply #6 on: March 09, 2020, 02:01:24 PM »
I am 42 and have some more saved, "lost" "a lot".
My main focus now is to be healthy, keep my job, play with my kids and connect more with my wife.
Working from home for the last week helped, but  now I start feeling the need for a home office...
My plan is to not do anything different.
The 401k contributions will continue to be made automatically and I am still looking to find a good house hacking opportunity  to reduce the housing expense...

red_pill

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Re: Help me, I am freaking out!
« Reply #7 on: March 09, 2020, 02:19:37 PM »
Yup, I got slaughtered. But every auto deposit I make now into my investment accounts will be at a bargain! 

sparkytheop

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Re: Help me, I am freaking out!
« Reply #8 on: March 09, 2020, 02:27:59 PM »
...About 2 weeks ago, I had about $86,000 in a Roth IRA and about $40,000 in a 457....

It has taken me a very, very long time to achieve the balances I did in both my IRA and 457...

You just hit your first $100k.  It's very true that the first $100k is the hardest.  It took me 10 years to get to my first $100k (in 2009 or 2010, so I went through 2008), but the second set of 10 years took me to $500k (I haven't maxed since I was first hired, when max was 12%, then gradually up to 15% of your income, not a dollar limit.  I remained at 15% for most of that time, but dropped down to just 6% the last few years.) Compounding will be your friend when things are back on the upswing.

I'd love to see the growth repeat for my next set of 10 years (on year one of that set right now), but understand that there are ups and downs getting there.

« Last Edit: March 09, 2020, 02:29:35 PM by sparkytheop »

achvfi

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Re: Help me, I am freaking out!
« Reply #9 on: March 09, 2020, 02:42:52 PM »
Roth IRA and about $40,000 in a 457. Obviously, over the last 2 weeks I have lost a lot of money in both of these accounts.

Remember, intentionally or not you invested in Roth IRA and 457 and why?
Because they are vehicles for you to save for long term goals. That is the plan you made. Stick to your plan. Don't let short term events influence the plan. 

What ever happens to investments in those accounts have no influence on your life short term.

Embrace this volatility in stock market, its is your friend.

Market acts like a bow and an arrow. An arrow can only be shot afar by pulling it backward.
« Last Edit: March 09, 2020, 02:45:56 PM by achvfi »

LilTazzy

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Re: Help me, I am freaking out!
« Reply #10 on: March 09, 2020, 04:44:19 PM »
OP here. Thank you to everyone for your replies! I appreciate everyone's words of wisdom and will try to tune out the media and keep my nose to the grindstone. 🙂


MDM

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Re: Help me, I am freaking out!
« Reply #12 on: March 09, 2020, 07:00:20 PM »
I have tried repeatedly to contact my financial advisor/stock broker to hopefully hear from a cooler head, but he has not answered or returned my calls....
How much do you pay him, either directly or through high fee funds?

LilTazzy

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Re: Help me, I am freaking out!
« Reply #13 on: March 11, 2020, 06:03:03 PM »
OP here. My financial advisor is with Prudential, so I believe he makes sort of commission on my balance. He actually did call me back, but was so rude to me and made me feel so stupid, I am considering taking my money elsewhere. He actually told me that I have no hope of retiring ever and will need to work until I die. He also told me I was the only person who called him with concerns about market volatility, because his clients are "smart."

Dogastrophe

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Re: Help me, I am freaking out!
« Reply #14 on: March 11, 2020, 06:11:22 PM »
Time to find a new adviser or better yet, learn to do it yourself and save the commissions and high mer's

MDM

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Re: Help me, I am freaking out!
« Reply #15 on: March 11, 2020, 06:36:54 PM »
I am considering taking my money elsewhere.
See Getting started - Bogleheads and good luck!

erutio

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Re: Help me, I am freaking out!
« Reply #16 on: March 11, 2020, 06:52:04 PM »
You're on MMM forums...man, just leave prudential and start oinvesting on your own.

Freedomin5

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Re: Help me, I am freaking out!
« Reply #17 on: March 11, 2020, 06:53:54 PM »
Forget your advisor.

Don’t sell right now.

Haven’t you heard? The investment accounts with the best long term returns are those whose owners are dead or whose owners forgot that their account existed.

https://theconservativeincomeinvestor.com/fidelitys-best-investors-are-dead/

Moral of the story: pretend that you’re dead and don’t touch or even look at your account.

DeepEllumStache

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Re: Help me, I am freaking out!
« Reply #18 on: March 11, 2020, 06:55:06 PM »
OP here. My financial advisor is with Prudential, so I believe he makes sort of commission on my balance. He actually did call me back, but was so rude to me and made me feel so stupid, I am considering taking my money elsewhere. He actually told me that I have no hope of retiring ever and will need to work until I die. He also told me I was the only person who called him with concerns about market volatility, because his clients are "smart."

Take your money elsewhere pronto. No one else is calling him? Either all the other guy's clients are dead or he's lying through his teeth about no one calling him. Get your money out of there, send it to Vanguard or Fidelity where you won't pay fees to people who treat you like crap.

You have done an awesome job of saving up the first $100K. Keep saving money, read up on investing, and everything will be fine.

MishMash

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Re: Help me, I am freaking out!
« Reply #19 on: March 11, 2020, 07:11:29 PM »
Lose the advisor ASAP.  Mom came into a little bit of money after my dad died, advisor railroaded her into services.  I get up there and we set up a meeting to talk to said advisor I go over things like "what's her investment fees, mortgage rates have dropped does it make sense to refinance, she's got a locked in 3% CD for 10 years etc" He was nice when I was there, mom went back to sign for some of the things we had talked about and he did a complete bait and switch. 

Mom said, well let me talk to my daughter she helps me.  The guy tried everything in his power to belittle her and finally ended it with a mocking "Well I have a finance backround, if you want to trust an uneducated person so be it". Come to find out he was going to get a 2.1% cut of her account between fees and the accounts he tried to bully her into (PS this was her and dads bank of 30 years).

We are still trying to get an account that was in my dads name transferred to hers, years later, because of how bad he messed it up

Another Reader

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Re: Help me, I am freaking out!
« Reply #20 on: March 11, 2020, 07:16:35 PM »
My guess is the 457 is with Prudential and you started an IRA with them because they were convenient and the state trusted them.  Prudential managed one of my 457 accounts, and they were awful. I had no choice, Prudential was the employer's choice. 

In your shoes, I would immediately move the IRA to Fidelity or Vanguard.  Fidelity will provide a bit more service, but you need to choose investments there wisely.  Don't let them tell you they can "manage" your money.  Just open the account and transfer the assets.  With Vanguard, you are on your own.  Pick one and have them do the account transfer.  Don't even talk to the jack ass at Prudential.  Read a bit from the suggested sources here and take a deep breath.  No need to do anything now except to move the IRA. 

With regard to the 457 plan, you should review the funds and the fund fees.  The objective is to pick the lowest cost, best performing funds they offer.  If they offer lower cost index funds, those are likely your best choices.  You are probably paying an annual or quarterly fee for the 457 plan.  That's usually a flat amount, so the more you have in the account, the less that fee matters.  Hold your nose and keep contributing.  When you leave your employer, you can take the money with you.

You may want to look at your choice of Roth vs traditional IRA.  If you qualify for the traditional IRA, it may make more sense to do that.  If you think your income will be lower in retirement, it often is better to defer the taxes until you take the money out in retirement.

If the Prudential guy was that rude, I would call his supervisor at Prudential and complain.  An e-mail to the benefits person in your agency wouldn't hurt either.  Take as much business as you can away from that company and pay the lowest fees on the money you have to leave with them.  That's the best revenge.

Psychstache

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Re: Help me, I am freaking out!
« Reply #21 on: March 11, 2020, 07:31:07 PM »
OP here. My financial advisor is with Prudential, so I believe he makes sort of commission on my balance. He actually did call me back, but was so rude to me and made me feel so stupid, I am considering taking my money elsewhere. He actually told me that I have no hope of retiring ever and will need to work until I die. He also told me I was the only person who called him with concerns about market volatility, because his clients are "smart."

So he can't help you make enough money to retire, he makes you feel bad, and he insults your intelligence. Seriously get your accounts away from him ASAP. The best way to get back at him is to take away the income stream you provide him.

Malcat

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Re: Help me, I am freaking out!
« Reply #22 on: March 12, 2020, 05:25:43 AM »
OP here. My financial advisor is with Prudential, so I believe he makes sort of commission on my balance. He actually did call me back, but was so rude to me and made me feel so stupid, I am considering taking my money elsewhere. He actually told me that I have no hope of retiring ever and will need to work until I die. He also told me I was the only person who called him with concerns about market volatility, because his clients are "smart."

And you pay this guy thousands of dollars a year for...what?

thesis

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Re: Help me, I am freaking out!
« Reply #23 on: March 12, 2020, 08:35:47 AM »
My fear is that if the OP transfers accounts elsewhere, it will be too tempting to sell in the process, even though you can usually do an in-kind transfer of assets. My impression has been that not everyone allows this, at least not without lots of red tape, but I could be wrong. I just consolidated HSAs and it took forever for the trustee-to-trustee accounts to transfer. For several weeks I had no access to one account or another as it "transferred" (what a joke, this is the 21st century...). It made me nervous.

I'd say, don't touch the money. At all. Don't switch account yet. Don't pay attention to the media. Your first order of business is education. Being worried about these things is natural. That does not make you stupid, that makes you human. The primary reason that many people on these forums aren't worried is because many of us have spent years learning the material and now we have evidence that we can rest in. It's one thing to be told what to do, and it's another thing to be able to rest in why you're being told that. Once you start diving into the material, that's something you can have, too. And as others have linked, the JLCollinsNH posts are great :)

nsmall

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Re: Help me, I am freaking out!
« Reply #24 on: March 12, 2020, 09:31:53 PM »
Thanks for your post.  I have been investing for 20 years, with the last 5 being very aggressive.  I still need to read posts like this and remember to stay the course.  I too need to block the news.  I too need to not open and check my account balances.

Ditch the advisor, sounds like a jerk.

Another vote for https://jlcollinsnh.com/stock-series/

Ive read it twice.