Author Topic: Need Saving / Investing advice  (Read 5325 times)

gsd802

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Need Saving / Investing advice
« on: January 03, 2017, 08:28:09 AM »
Hello,
I would like to start with I am a complete beginner when it comes to investing. Currently I use Edward Jones for my investment adviser.  I know people have mixed thoughts on the company, but my family got me into it because they have all done really well with them.  I am 27 work all the time with salary pay and want to save but get some return on that saving. 

Currently I max my ROTH every year, put $100 into my SIMPLE each week, ($5,200 annually) and my employer contributes 3% into my SIMPLE.  For Ed Jones I believe I am in the medium risk bracket.  Looks like for 2016 I only made less than 3% on all my investments.  I'm not even sure if that covers the cost of the program I am paying Jones.  (Will look into that at end of the year report)

I have about $28k between my ROTH and SIMPLE, and about $27k in cash currently.  No debt. 

Should I invest some of my cash money?  If so, how so? Am I on the right track? I just feel like I am not gaining.  I work for a dairy farm and my retirement is only what I save.  I want to make sure I do it right.

Thank you


Gunny

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Re: Need Saving / Investing advice
« Reply #1 on: January 03, 2017, 09:13:21 AM »
We Mustashians are not fans of Financial Planners because of the expenses involved.  You need to understand your risk tolerance.  At your young age, you would do better in the long haul by being heavy on equities.  If it were me, I would roll my Ed Jones money into a Vanguard index fund or two.  There are several good ones and the expenses are the lowest in the industry.  Put enough into your employer's SIMPLE to get their full match, then fund ROTH IRA to the max.  If you still have more funds to invest, start an HSA and max it out each year.  ROTH and HSA should hold Vanguard index funds.  Then go back and max out employer plan if there's a tax advantage to doing so.  If you still have money to invest, just start a taxable account with Vanguard funds.  If you want automatic asset allocation, Vanguard has several good and low cost target funds and balanced funds.  If I was your age I would shoot for 80/20 stocks/bonds.  No more bonds than that.  I'm also more of a fan of Government treasuries than I am of corporate bonds.  You are doing great.  Keep debt under control, continue to cut lifestyle expenses and live frugally.  But don't cut lifestyle to the point that you don't enjoy life.  Strike a balance.  IMO You are looking at early retirement if you stay the course.  As soon as you hit 25x expenses, you are there.
« Last Edit: January 03, 2017, 09:15:53 AM by Gunny »

radram

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Re: Need Saving / Investing advice
« Reply #2 on: January 03, 2017, 09:49:49 AM »
Hello,
I would like to start with I am a complete beginner when it comes to investing. Currently I use Edward Jones for my investment adviser.  I know people have mixed thoughts on the company, but my family got me into it because they have all done really well with them.  I am 27 work all the time with salary pay and want to save but get some return on that saving. 

Currently I max my ROTH every year, put $100 into my SIMPLE each week, ($5,200 annually) and my employer contributes 3% into my SIMPLE.  For Ed Jones I believe I am in the medium risk bracket.  Looks like for 2016 I only made less than 3% on all my investments.  I'm not even sure if that covers the cost of the program I am paying Jones.  (Will look into that at end of the year report)

I have about $28k between my ROTH and SIMPLE, and about $27k in cash currently.  No debt. 

Should I invest some of my cash money?  If so, how so? Am I on the right track? I just feel like I am not gaining.  I work for a dairy farm and my retirement is only what I save.  I want to make sure I do it right.

Thank you

Welcome to the forum.

You have a great start! My thoughts:

You need to have an asset allocation strategy. Start simple. I recommend 100% total market stocks. VTSMX is good. VTSMX is better but requires a larger investment. This will get you started. As you age, you might want to add other investments like bonds, but with your age and just getting started, the simpler the better.

RE Edward Jones: You can do better. You state that "your family have all done very well with them". To me that is a standard answer when they have ABSOLUTELY NO CLUE how well, or poor, hey have done. What does "well" mean? If they mean simply their account has grown with time, that does not at all mean EJ helped at all to achieve that. A monkey should "do well" over time. The only questions you should ask your advisor are:
1. How did my account grow relative to index funds that match my asset allocation target?
2. How much of my money did you charge me to get this performance?
3. Did this extra cost provide a benefit that exceeded this cost?

I would bet none of your family has the answer to these questions, but the odds are that everyone on this forum can give you the answer: They charged your family(and you) money to UNDER-PERFORM an index fund. Often by a LOT.

You mentioned you use Edward Jones, but do not clarify what funds are held by them. Do they house your ROTH, SIMPLE, non-qualified account?

RE:  IRA's: Often you must choose from a list of investment options. Post those options here and we can give you some advice. Sometimes the choices suck, but it is still the place to put your money due to the company match. Where are your ROTH accounts? What have you purchased inside them?

RE Cash: Keep an emergency fund in cash. Some say 6 months of expenses, others say 1 year. If I were you, I would start a non-qualified account with Vanguard and buy at least $10,000 of the admiral shares mentioned earlier (VTSMX).

gsd802

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Re: Need Saving / Investing advice
« Reply #3 on: January 05, 2017, 04:43:12 AM »
Thank you both for the good advice.  Some of the terminology is new to me still so bare with me please. 

Edward Jones holds all of my money in my ROTH and Simple IRA.  I max my ROTH every year at $5,500.  My employer puts 3% of my yearly earnings towards my Simple IRA, and I take $100 from each weeks paycheck and put it towards my Simple IRA.

If this sounds correct to you, Ed Jones has my ROTH enrolled in...
-Bond Fund of America
-Capital Income Builder
-Fundamental Investors Fund
-Growth Fund of America
-New Perspective Fund
-New World Fund
-Smallcap World Fund

I am unfamiliar about knowing whether I am enrolled in stocks vs bonds.  To be honest it sounds terrible but I just trusted Ed Jones to take my money and do the right thing.  Its been 2.5 years now I think and I'm starting to question it.

To answer your question about how well Ed Jones worked for my family, I talked to them (grandparents) yesterday about it.  Ed Jones charged them 32% of their earnings for 2016.  They were not happy, and they old me that if they could start all over again they would not choose Ed Jones.  My father uses Fidelity.  If I were to enroll into Vanguard, is there an office where I can meet with someone to help me through?  Or do I go to Ed Jones and tell him I no longer want to use his services? 

If there is anything I missed in your questions please let me know.

Thank you!

gsd802

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Re: Need Saving / Investing advice
« Reply #4 on: January 05, 2017, 05:05:29 AM »
A couple more things to add...

My grandparents and I have different Ed Jones advisers.  We are in different states. 

I know I have personally gave Ed Jones just under $17,000 post tax money to my ROTH since 8/2014.  I have made $106 in my ROTH account since.  In my SIMPLE, it shows I have lost $30 since 8/2015.  (Thats when my employer started my SIMPLE IRA.)

Thank you

Frankies Girl

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Re: Need Saving / Investing advice
« Reply #5 on: January 05, 2017, 05:45:49 AM »
Just to make sure you understand this...

Your saying Edward Jones has done okay for you and yours just tells everyone else that knows anything about investing that you have no idea how awful they really are. There is no "mixed thoughts" about it; they charge obscene amounts of fees and put their clients into subpar funds that do not perform well (but pay EJ and their reps a lovely amount of money regardless) and make a point to ingratiate themselves so their clients see them as friends and don't question their horrible investment choices. They take advantage of the elderly, the uninformed and the timid investors.

Read Jim Collins' series (either get his book or read it online): http://jlcollinsnh.com/stock-series/

You don't say what your timeline is or anything, but as you're under 30 I'll direct you to another of Jim's postings regarding advice for his daughter (in her early 20s just starting out): http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/

You can't go wrong with Vanguard, but they don't typically have any brick and mortar locations to go have a sit down with them. It usually is all over the phone/web. If you feel the need to have a real live adviser (remember advisers aren't usually your friend; they want to advise you to invest in ways that usually benefit them/their company unless they are acting as a fiduciary), you can always check out Fidelity and just make sure to stay away from any of their professionally managed funds. They do usually have reps in actual stores scattered around decent sized cities. They have a great range of low cost index funds (full disclosure, I use Fido exclusively and am very happy, but I self manage and only need to get help or questions answered occasionally).

Here is a comparison of Vanguard funds to their Fido equivalents; you can match up any Vanguard suggestion easily 99% of the time, and there is an added bonus of some of the Fido funds being a hair cheaper (they stay very competitive). https://www.bogleheads.org/wiki/Fidelity

If you read through the stock series and start gaining knowledge and get to feel comfortable with the idea of self managing, then Vanguard or Fidelity will serve you quite well. And of course you can always ask tons of questions on here.

Basically, it is okay to leave things alone for a little while, as you need to do some homework first. Once you figure out the basics, and get your IPS nailed down, then you move on to your asset allocation. At your age, if you can handle the wild ride, I also agree with radram about going 100% total market stocks in VTSMX/VTSMX (or the Fidelity equivalent). But you can't go wrong with a simple 80/20 stock/bond (lots of lazy portfolios out there) if going 100% stocks seems too scary.

Another thing to make sure you understand and should get from the stock series - risk is not the same as volatility - the 100% stocks will be volatile for the short term, but big picture it over a few decades, and it will look MUCH nicer.

Once you get it all figured out, then you just contact Vanguard or Fido and initiate a transfer and fill out some paperwork and they handle the rest. They walk you through the whole process; you don't have to say one word to the EJ person - who might have the nerve to contact you with sour grapes "I thought we were friends!" type of guilt tripping, but that's mostly because they can't stand the idea of losing a juicy sheep client. Feel free to ignore any of that mess. They might even hit you with a transfer or closing account fee. It's a small price to pay to get free from them. ;)

And then once it's moved, you pop the funds into your chosen asset allocation and can pretty much forget about it - just check in once a year to see if it needs rebalancing, unless you end up enjoying the ups and downs of the market. I am one of those that looks practically every day, but I also got desensitized to seeing dramatic drops or just don't bother checking on days I know the market went waaay down.

Take your time and get comfortable with the knowledge. A few months or so while you get up to speed isn't going to kill your future, and you will be VERY glad you took the time to learn how this all works and stopped bleeding fees and subpar fund performance.


I started out with zero knowledge of investing back almost 4 years ago. Like I actually said on here when I first found the place something along the lines of how scary investing seemed and how I never thought I'd get the hang of it and always would expect to be paying someone smarter than me to manage my money... and then I read that series, hung out on this forum for a year or so, read up on index investing/Bogleheads stuff and bugged the crap out of everyone here, and now I'm managing my own stuff, and have 100% confidence in my own abilities. I am the poster child for the idea of "if I can do it, anyone can" type of thinking. :)

Good luck and hope this stuff doesn't sound too overwhelming. It can seem that way at first, but it's amazing how easy it ends up being once you start untangling the threads.


Heckler

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Re: Need Saving / Investing advice
« Reply #6 on: January 05, 2017, 05:55:11 AM »
Its a lot to digest but worth it for your future self.

https://www.bogleheads.org/wiki/Getting_started

UKMustache

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Re: Need Saving / Investing advice
« Reply #7 on: January 05, 2017, 06:09:32 AM »
A couple more things to add...

My grandparents and I have different Ed Jones advisers.  We are in different states. 

I know I have personally gave Ed Jones just under $17,000 post tax money to my ROTH since 8/2014.  I have made $106 in my ROTH account since.  In my SIMPLE, it shows I have lost $30 since 8/2015.  (Thats when my employer started my SIMPLE IRA.)

Thank you

Since August 2015 VTSMX has returned over 13.5% (with very low fees).  You have paid enormous fees and have lost money.

I hope this demonstrates the importance of reading the links suggested by others :)

radram

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Re: Need Saving / Investing advice
« Reply #8 on: January 05, 2017, 06:28:32 AM »
Just to make sure you understand this...

Your saying Edward Jones has done okay for you and yours just tells everyone else that knows anything about investing that you have no idea how awful they really are. There is no "mixed thoughts" about it; they charge obscene amounts of fees and put their clients into subpar funds that do not perform well (but pay EJ and their reps a lovely amount of money regardless) and make a point to ingratiate themselves so their clients see them as friends and don't question their horrible investment choices. They take advantage of the elderly, the uninformed and the timid investors.

Read Jim Collins' series (either get his book or read it online): http://jlcollinsnh.com/stock-series/

You don't say what your timeline is or anything, but as you're under 30 I'll direct you to another of Jim's postings regarding advice for his daughter (in her early 20s just starting out): http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/

You can't go wrong with Vanguard, but they don't typically have any brick and mortar locations to go have a sit down with them. It usually is all over the phone/web. If you feel the need to have a real live adviser (remember advisers aren't usually your friend; they want to advise you to invest in ways that usually benefit them/their company unless they are acting as a fiduciary), you can always check out Fidelity and just make sure to stay away from any of their professionally managed funds. They do usually have reps in actual stores scattered around decent sized cities. They have a great range of low cost index funds (full disclosure, I use Fido exclusively and am very happy, but I self manage and only need to get help or questions answered occasionally).

Here is a comparison of Vanguard funds to their Fido equivalents; you can match up any Vanguard suggestion easily 99% of the time, and there is an added bonus of some of the Fido funds being a hair cheaper (they stay very competitive). https://www.bogleheads.org/wiki/Fidelity

If you read through the stock series and start gaining knowledge and get to feel comfortable with the idea of self managing, then Vanguard or Fidelity will serve you quite well. And of course you can always ask tons of questions on here.

Basically, it is okay to leave things alone for a little while, as you need to do some homework first. Once you figure out the basics, and get your IPS nailed down, then you move on to your asset allocation. At your age, if you can handle the wild ride, I also agree with radram about going 100% total market stocks in VTSMX/VTSMX (or the Fidelity equivalent). But you can't go wrong with a simple 80/20 stock/bond (lots of lazy portfolios out there) if going 100% stocks seems too scary.

Another thing to make sure you understand and should get from the stock series - risk is not the same as volatility - the 100% stocks will be volatile for the short term, but big picture it over a few decades, and it will look MUCH nicer.

Once you get it all figured out, then you just contact Vanguard or Fido and initiate a transfer and fill out some paperwork and they handle the rest. They walk you through the whole process; you don't have to say one word to the EJ person - who might have the nerve to contact you with sour grapes "I thought we were friends!" type of guilt tripping, but that's mostly because they can't stand the idea of losing a juicy sheep client. Feel free to ignore any of that mess. They might even hit you with a transfer or closing account fee. It's a small price to pay to get free from them. ;)

And then once it's moved, you pop the funds into your chosen asset allocation and can pretty much forget about it - just check in once a year to see if it needs rebalancing, unless you end up enjoying the ups and downs of the market. I am one of those that looks practically every day, but I also got desensitized to seeing dramatic drops or just don't bother checking on days I know the market went waaay down.

Take your time and get comfortable with the knowledge. A few months or so while you get up to speed isn't going to kill your future, and you will be VERY glad you took the time to learn how this all works and stopped bleeding fees and subpar fund performance.


I started out with zero knowledge of investing back almost 4 years ago. Like I actually said on here when I first found the place something along the lines of how scary investing seemed and how I never thought I'd get the hang of it and always would expect to be paying someone smarter than me to manage my money... and then I read that series, hung out on this forum for a year or so, read up on index investing/Bogleheads stuff and bugged the crap out of everyone here, and now I'm managing my own stuff, and have 100% confidence in my own abilities. I am the poster child for the idea of "if I can do it, anyone can" type of thinking. :)

Good luck and hope this stuff doesn't sound too overwhelming. It can seem that way at first, but it's amazing how easy it ends up being once you start untangling the threads.
+1 on every word, especially the impending guilt trip. This was not EJ, but something you might expect to hear (I sure hope not). My DW's Uncle passed away late November 2015. Family friend / Annuity Salesman / POS pressed to get the Uncles annuity contracts "re-invested" within 30 days. Brother-in-law said yes to a 2% lifetime growth annuity contract crappy deal with huge upside to POS family friend. Sister-in-law and wife did a 1035 exchange of their portion of the annuity, wife to vanguard, SIL to her "people" (less than half the fees, but still too high for wife and I). He actually said their Uncle would be disappointed in them for the transfer. SIL was in tears, but still moved the money.

Mother and Father in law LOVE this guy. Will need to deal with them again someday, but Vanguard made it easy.

NoStacheOhio

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Re: Need Saving / Investing advice
« Reply #9 on: January 05, 2017, 06:31:57 AM »
EJ is terrible.

For comparison. Investing $5,500/year in VTSAX starting in August 2014 would have an account value around $24,500 right now.

boarder42

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Re: Need Saving / Investing advice
« Reply #10 on: January 05, 2017, 06:35:37 AM »
EJ is awful. 

go read

jlcollinsh stock series and drop the EJ advisor and start with vanguard.  you're paying for your advisor's retirement.  which if thats your goal you're doing a fantastic job so far.  also you should list your SIMPLE options and expense ratios

gsd802

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Re: Need Saving / Investing advice
« Reply #11 on: January 05, 2017, 06:40:38 AM »
Yikes!  I need to get out!  The nice guy trick from EJ is exactly what I see.  Ohio, seeing those numbers and comparing mine is really disappointing.  I will read up and learn more, too.  I just need to figure out how to leave EJ.  Should move both my ROTH and SIMPLE to the same new place?  I would like to keep it somewhat simple if I can (having them in the same place)

Thank you

boarder42

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Re: Need Saving / Investing advice
« Reply #12 on: January 05, 2017, 06:47:00 AM »
yes you can go to vanguard and enter your account information there and they will move it for you... you will likely get a call from your EJ rep telling you all about why you should stick with him ( my friend who just moved to vanguard did)

NoStacheOhio

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Re: Need Saving / Investing advice
« Reply #13 on: January 05, 2017, 07:04:54 AM »
Yikes!  I need to get out!  The nice guy trick from EJ is exactly what I see.  Ohio, seeing those numbers and comparing mine is really disappointing.  I will read up and learn more, too.  I just need to figure out how to leave EJ.  Should move both my ROTH and SIMPLE to the same new place?  I would like to keep it somewhat simple if I can (having them in the same place)

Thank you

Vanguard, Schwab and Fidelity are the standard recommendations. Do you research before you make any changes, your EJ fees are already gone, and spending some time reading up before you make your next move isn't going to hurt you.

Basically, figure out your risk tolerance and what kind of stuff you want in your portfolio, then make your change. Stick with low cost index funds. You should have a enough money to buy into the lower fee mutual funds, or you can use the ETFs, which are generally the same as the lowest fee mutual funds. Check to see if anyone is offering any bonuses for transferring your account (Fidelity has some kind of matching thing going on for IRA transfers).

Depending on your income and tax situation, you may want to contribute more to the SIMPLE before you contribute to the Roth. Do you know why you're contributing the amounts you are to the different account types? If you post up detailed info, maybe even a case study, lots of people here will have good advice.

AM43

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Re: Need Saving / Investing advice
« Reply #14 on: January 05, 2017, 07:43:26 AM »
Do what every one above has said. Get out of EJ and don't look back.
The process of moving funds and opening new accounts may seem like a difficult task, but its well worth it.
Most of the work will be taken care of by brokerage you choose.
I myself have been through this and it took me 10 years to realize I was being charged high fees for less than average returns.
In fact between mine and my wife's account we paid over $3k surrender charges just to get out.
Guess what, it was well worth it as I made my money back and some.
You are on the right track. Good luck.

radram

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Re: Need Saving / Investing advice
« Reply #15 on: January 05, 2017, 08:26:50 AM »
Thank you both for the good advice.  Some of the terminology is new to me still so bare with me please. 

Edward Jones holds all of my money in my ROTH and Simple IRA.  I max my ROTH every year at $5,500.  My employer puts 3% of my yearly earnings towards my Simple IRA, and I take $100 from each weeks paycheck and put it towards my Simple IRA.

If this sounds correct to you, Ed Jones has my ROTH enrolled in...
-Bond Fund of America
-Capital Income Builder
-Fundamental Investors Fund
-Growth Fund of America
-New Perspective Fund
-New World Fund
-Smallcap World Fund

I am unfamiliar about knowing whether I am enrolled in stocks vs bonds.  To be honest it sounds terrible but I just trusted Ed Jones to take my money and do the right thing.  Its been 2.5 years now I think and I'm starting to question it.

To answer your question about how well Ed Jones worked for my family, I talked to them (grandparents) yesterday about it.  Ed Jones charged them 32% of their earnings for 2016.  They were not happy, and they old me that if they could start all over again they would not choose Ed Jones.  My father uses Fidelity.  If I were to enroll into Vanguard, is there an office where I can meet with someone to help me through?  Or do I go to Ed Jones and tell him I no longer want to use his services? 

If there is anything I missed in your questions please let me know.

Thank you!

After your experience, if you choose vanguard, you very well might convince your grandparents to start over with them as well. If fact, they CAN start over again, anytime. They still could save tens of thousands in their remaining life.

I will not do this for all of them, but once you are ready, here is how I would look at your current investments. Note that at your age and the fact that you have decades of investing and adding new money, I still believe you should be 100% stocks.

Bond Fund of America - ticker ABNDX -
This is a bond fund. I look at owning bonds as a chance to own a stable investment that can withstand a stock market crash and preserve capital. I am not looking to "out-earn" anything here. Modest returns with modest stability should be the key. At my age (47) and fully FIRE, I am willing to give up some yield in exchange for more stability for SOME of my money. With the wild past of bonds the past decade, and the expectation of rising interest rates, it is not crystal clear to me that bonds are poised to meet these goals to begin with. As a result, I am more interested in short term and intermediate term bonds until rates increase. A 30 year bond is yielding 3.02%. In 1981 it was yielding 14.36%.

Let's see how this fund compared to a comparable bond index
Open these 2 pages so you can see them side by side and compare. I will wait :)
http://beta.morningstar.com/funds/XNAS/ABNDX/quote.html
http://beta.morningstar.com/funds/XNAS/VBIIX/quote.html

Load:
The first place to look is right at the top underneath "Load". 3.75 means they take 3.75 pennies of every dollar you invest. None means they invest 1 penny for every 1 penny you invest. The fund with a 3.75 load is down almost 4% the instant you buy it. That alone is hard to overcome. Some funds will overcome this, but most will not. That is why when I see the word "load", I hear the word "run". Front end load vs. back end load just means run now or run later. Summary: RUN

Expenses:
Look right next to load, on top.  Bond fund shows .6%, Vanguard shows .16%. A front end load you pay once. You pay expenses every year. Bond Fund charges 5 TIMES the money every year compared to the Vanguard fund. Vanguard has a comparable Admiral fund if you have $10,000 or more invested. This fund has expenses of .09%(VBILX). Remember we are talking about bonds here, which are historically low now. It is interesting that Morningstar rates both of these as "low" fee levels (right next to expenses). I think they are crazy to rate them the same.

All of these fees are fine with me, IF I make more money. Will I? I do not have a crystal ball.The best I can do is see if someone a decade ago DID make more money. Let's see.

Look down about 4 sections to performance. If you look at the "fund" row and 10 yr column, you will see 2.97 for bond fund, and 5.24 for Vanguard. A difference of 2.27%. That is almost HALF the yield, AFTER paying 3.75% a load.  Another interesting note: you know those popular charts of "the growth of 10,000", with pretty colors and lines you can play with (just above where we pulled the 2.97 and 5.24), those are BEFORE FEES.
WHAT
THE
F***

What the hell good is that chart if I can not EVER see that money. The actual growth will be eroded by the expenses we discussed earlier. So really, I surrender 3.75% off the top, under-perform by half AND they continue to charge me 5 TIMES as much to do it. No thank you.

I completely agree with others that say with the current money you should prepare and make informed decisions. Whether or not you switch, I would stop buying all loaded funds TODAY. If you are contributing anything per paycheck, simply change where that money is invested. A money market yielding .01% would be better than taking 3-4% only to move the money in a very short time.

You will need to check with your employer to see if you can move the account that gets the company match. They might not match unless you use their firm (is this EJ?). As stated earlier, you might be better off getting the match and then living with the higher fees.  The ROTH can most likely be moved, but if you currently direct deposit from your paycheck, they may no longer do that. Since there would be no company match of that money, you can deposit that money on your own.

Keep us posted.

Car Jack

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Re: Need Saving / Investing advice
« Reply #16 on: January 05, 2017, 08:28:05 AM »

I know I have personally gave Ed Jones just under $17,000 post tax money to my ROTH since 8/2014.  I have made $106 in my ROTH account since.  In my SIMPLE, it shows I have lost $30 since 8/2015.  (Thats when my employer started my SIMPLE IRA.)

I would like to translate this for you.  Edward Jones has been well known for using front end load funds.  What's that mean?  That means that when you give them money to invest, before the forward it (usually to American Funds who gives EJ a kickback), they take a sales commission.

So here's what happened.  You gave EJ $17,000.  They took $977.50 as a sales commission and forwarded $16,022.50 to American Funds.  You now get to pay their yearly Expense Ratio which is higher than you'll get with a low cost index fund and potentially, when you cash out, you'll pay a 12b-1 fee.  Closing an EJ account also costs you money.

If you'd like a view of the inside workings of EJ and have lots of free time, read this (I read the whole thing) http://kronstantinople.blogspot.com/p/edward-jones-saga.html

Move all of your money out of EJ.  Going to Vanguard is fine but if you need a brick and mortar store, Fidelity and Charles Schwab have those.  Look for who is close to you.  Then look at ETFs or low cost index mutual funds.  You'll want to only buy NTF (no transaction fee) low cost (ER less than 0.2% for sure....easy to get less than 0.1%) and an index (not actively managed).  TDAmeritrade is another good place but I don't actually know if they have places to go to.

meghan88

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Re: Need Saving / Investing advice
« Reply #17 on: January 05, 2017, 09:16:52 AM »
^^^ What everybody else on this thread said.  And if you need another push to low-cost index funds that you can DIY, just read this:

http://www.nytimes.com/2017/01/04/upshot/its-time-to-ignore-advice-about-which-stocks-to-buy-in-2017.html?utm_medium=email&utm_source=flipboard&_r=0

I can tell you countless tales of my own crappy mutual fund investments sold to me by financial advisors.  Read the jlcollins stuff, Bogle, and ignore everything else the news.
« Last Edit: January 05, 2017, 11:24:09 AM by meghan88 »

ImCheap

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Re: Need Saving / Investing advice
« Reply #18 on: January 05, 2017, 10:57:49 AM »
Teach a man fish and all of that!

I would do this in the following order:

a) Move everything you own that won't create any taxes or big taxes to single fund such as Vanguard LifeStrategy Growth Fund (VASGX) or Vanguard LifeStrategy Moderate Growth Fund (VSMGX). You could use a retirement date fund but I prefer a AA to not move unless I have a reason for it to change.

b) Read The Bogleheads' Guide to Investing, https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365

c) Read All About Asset Allocation, Second Edition, https://www.amazon.com/All-About-Asset-Allocation-Second/dp/0071700781/ref=sr_1_1?s=books&ie=UTF8&qid=1483638550&sr=1-1&keywords=all+about+asset+allocation+by+richard+ferri

d) After you read the two above books, ask some questions and then decide for yourself if you want to split apart the above fund into the some of its parts.

e) After all of that is really just comes down to your savings rate and end goals.

If everything I owned was tax deferred and I had access to something like one of the above funds across all accounts I would be very tempting to just use the one fund, one fund for until the first couple hundred thousand would be sane.


boarder42

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Re: Need Saving / Investing advice
« Reply #19 on: January 05, 2017, 11:30:29 AM »
wtf are you recommending 2 growth funds for whent thats far from the norm around here. and is much worse than VTSAX just owning the whole US stock market and has 3x the expense ratio. 

talltexan

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Re: Need Saving / Investing advice
« Reply #20 on: January 06, 2017, 07:58:26 AM »
reading this thread has been a wake-up call for me, as 90% of my post-tax investments as well as my wife's Roth are with Edward Jones (and my own Roth is in American Funds funds as well). *soul-searching*

NoStacheOhio

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Re: Need Saving / Investing advice
« Reply #21 on: January 06, 2017, 08:45:49 AM »
reading this thread has been a wake-up call for me, as 90% of my post-tax investments as well as my wife's Roth are with Edward Jones (and my own Roth is in American Funds funds as well). *soul-searching*

Just know that you're neither the first nor last person to lose money to EJ. Consider it tuition. :)

boarder42

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Re: Need Saving / Investing advice
« Reply #22 on: January 06, 2017, 09:03:54 AM »
reading this thread has been a wake-up call for me, as 90% of my post-tax investments as well as my wife's Roth are with Edward Jones (and my own Roth is in American Funds funds as well). *soul-searching*

Just know that you're neither the first nor last person to lose money to EJ. Consider it tuition. :)

what do the mods think of putting a sticky about how bad places like EJ are at the top of the investment forum.  it truly is awful they exist.

NoStacheOhio

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Re: Need Saving / Investing advice
« Reply #23 on: January 06, 2017, 09:15:47 AM »
reading this thread has been a wake-up call for me, as 90% of my post-tax investments as well as my wife's Roth are with Edward Jones (and my own Roth is in American Funds funds as well). *soul-searching*

Just know that you're neither the first nor last person to lose money to EJ. Consider it tuition. :)

what do the mods think of putting a sticky about how bad places like EJ are at the top of the investment forum.  it truly is awful they exist.

I agree, PMed arebelspy

Gunny

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Re: Need Saving / Investing advice
« Reply #24 on: January 06, 2017, 11:52:11 AM »
OP, Dude (or Dudette) you just got fire hosed.  All great info and advice. Frankiesgirl hit the nail on the head.  Read Collins' web site until you understand it.  He writes to my level, so you should have no issues digesting the info. Take a breath.  Slow down.  Get smart on personal finance, simple index investing, and frugal living.  This will all make you FI one day.  The important thing is, you are in the best place to learn.  Almost every MMM member is a financial expert on some level.  Read, learn, ask questions, and welcome to the community. 
« Last Edit: January 06, 2017, 11:58:09 AM by Gunny »

gsd802

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Re: Need Saving / Investing advice
« Reply #25 on: January 06, 2017, 01:56:42 PM »
Thank you very much everyone.  I got way more feedback than I imagined.  So many possibilities for which path to take, going to read read and read some more.  I have always been a decent saver with my money, aside from bills and college loans.  Happy to say since 2014 I have been debt free and thats when I enrolled into EJ for what I thought would be a good move for retirement.   Live and learn!

NoStacheOhio

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Re: Need Saving / Investing advice
« Reply #26 on: January 06, 2017, 08:05:36 PM »
Thank you very much everyone.  I got way more feedback than I imagined.  So many possibilities for which path to take, going to read read and read some more.  I have always been a decent saver with my money, aside from bills and college loans.  Happy to say since 2014 I have been debt free and thats when I enrolled into EJ for what I thought would be a good move for retirement.   Live and learn!

Could be worse; you could've bought a boat.

boarder42

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Re: Need Saving / Investing advice
« Reply #27 on: January 07, 2017, 04:06:55 AM »
Thank you very much everyone.  I got way more feedback than I imagined.  So many possibilities for which path to take, going to read read and read some more.  I have always been a decent saver with my money, aside from bills and college loans.  Happy to say since 2014 I have been debt free and thats when I enrolled into EJ for what I thought would be a good move for retirement.   Live and learn!

Could be worse; you could've bought a boat.

I own a boat with better returns on 14500 than he has on 17k over the same time frame.

gsd802

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Re: Need Saving / Investing advice
« Reply #28 on: January 07, 2017, 04:47:55 AM »
Thank you very much everyone.  I got way more feedback than I imagined.  So many possibilities for which path to take, going to read read and read some more.  I have always been a decent saver with my money, aside from bills and college loans.  Happy to say since 2014 I have been debt free and thats when I enrolled into EJ for what I thought would be a good move for retirement.   Live and learn!

Could be worse; you could've bought a boat.

Well, I didnt buy a boat, but I bought a 20 year old truck back in 2014.  Same truck today is selling for $5,000 more than what I bought it for.  Trouble is, once I own something I cant ever sell it.

sleepyguy

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Re: Need Saving / Investing advice
« Reply #29 on: January 07, 2017, 07:48:50 AM »
That's good of you not following what your family is doing and educating yourself.

"advisors" are hilarious... so show graphs of course that puts them against nothing and make themselfs look great.  Advise fees that have 2%+ mer and load fees.  Don't really care what your performance is like as long as there are more clients to get initial fees and high mers again.  Absolute crooks.

Banks aren't that much better... they will sell the front desk customers HIGH MF that are exactly same as some index MF with a fraction of the rate if you ask.  Unreal.

I was clueless 10yrs back, holding onto high MER MFs, thinking I was doing pretty well... read a few investment books and it totally changed my way of thinking and approach to investing.

Good luck!

HAPPYINAZ

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Re: Need Saving / Investing advice
« Reply #30 on: January 07, 2017, 02:41:41 PM »
gsd802,

I just wanted to say Congratulations!  You have come to the right place to get advice!  As has been said, don't rush into your change.  Take some time to learn about index investing and fees and then figure out how to transfer your accounts to Vanguard or some other index investing place.  Don't fret over what is lost in terms of Edward Jones fees.  You are learning and you took a big step forward when you started investing for your future.  Now as you learn more, you can streamline your investing so it's more efficient (ie, less lost to fees).  Keep learning and growing your money!  Congratulations again on taking such positive steps while you were relatively young!

financiallypossible

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Re: Need Saving / Investing advice
« Reply #31 on: January 09, 2017, 10:08:34 AM »
Thank you both for the good advice.  Some of the terminology is new to me still so bare with me please. 

Edward Jones holds all of my money in my ROTH and Simple IRA.  I max my ROTH every year at $5,500.  My employer puts 3% of my yearly earnings towards my Simple IRA, and I take $100 from each weeks paycheck and put it towards my Simple IRA.

If this sounds correct to you, Ed Jones has my ROTH enrolled in...
-Bond Fund of America
-Capital Income Builder
-Fundamental Investors Fund
-Growth Fund of America
-New Perspective Fund
-New World Fund
-Smallcap World Fund

I am unfamiliar about knowing whether I am enrolled in stocks vs bonds.  To be honest it sounds terrible but I just trusted Ed Jones to take my money and do the right thing.  Its been 2.5 years now I think and I'm starting to question it.

To answer your question about how well Ed Jones worked for my family, I talked to them (grandparents) yesterday about it.  Ed Jones charged them 32% of their earnings for 2016.  They were not happy, and they old me that if they could start all over again they would not choose Ed Jones.  My father uses Fidelity.  If I were to enroll into Vanguard, is there an office where I can meet with someone to help me through?  Or do I go to Ed Jones and tell him I no longer want to use his services? 

If there is anything I missed in your questions please let me know.

Thank you!

Hi gsd802,

I'm currently in the process of rolling over my mother's accounts from Edward Jones to the discount brokerage I use. Sadly, Edward Jones has very steep front-load fees and I could find out more about the funds you listed (what their holdings are -- i.e. which stocks, which bonds, etc.) on Morningstar than I could on the Edward Jones website.

- Trip
« Last Edit: January 09, 2017, 02:24:04 PM by financiallypossible »

boarder42

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Re: Need Saving / Investing advice
« Reply #32 on: January 09, 2017, 10:16:58 AM »
Thank you both for the good advice.  Some of the terminology is new to me still so bare with me please. 

Edward Jones holds all of my money in my ROTH and Simple IRA.  I max my ROTH every year at $5,500.  My employer puts 3% of my yearly earnings towards my Simple IRA, and I take $100 from each weeks paycheck and put it towards my Simple IRA.

If this sounds correct to you, Ed Jones has my ROTH enrolled in...
-Bond Fund of America
-Capital Income Builder
-Fundamental Investors Fund
-Growth Fund of America
-New Perspective Fund
-New World Fund
-Smallcap World Fund

I am unfamiliar about knowing whether I am enrolled in stocks vs bonds.  To be honest it sounds terrible but I just trusted Ed Jones to take my money and do the right thing.  Its been 2.5 years now I think and I'm starting to question it.

To answer your question about how well Ed Jones worked for my family, I talked to them (grandparents) yesterday about it.  Ed Jones charged them 32% of their earnings for 2016.  They were not happy, and they old me that if they could start all over again they would not choose Ed Jones.  My father uses Fidelity.  If I were to enroll into Vanguard, is there an office where I can meet with someone to help me through?  Or do I go to Ed Jones and tell him I no longer want to use his services? 

If there is anything I missed in your questions please let me know.

Thank you!

Hi gsd802,

I'm currently in the process of rolling over my mother's accounts from Edward Jones to the discount brokerage I use. Sadly, Edward Jones has very steep front-load fees and I could find out more about the funds you listed (what their holdings are -- i.e. which stocks, which bonds, etc.) on Morningstar than I could on the Edward Jones website.

I've started a YouTube channel to teach people how to analyze investments:
https://www.youtube.com/channel/UCMMeIPhUihJuw3-EcAvG6zQ

I hope you find it helpful.

- Trip

you keep self promoting your youtube channel in every post??? why?

financiallypossible

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Re: Need Saving / Investing advice
« Reply #33 on: January 09, 2017, 11:57:45 AM »
you keep self promoting your youtube channel in every post??? why?

I encourage anyone who wants to learn how to better make their money work for them to check out investing / finance books from their local library.

Not everyone has the patience to sit down and read a book though. I'm aiming to help many people solve a problem they have -- limited knowledge on investing. By providing short 10-15 minute video clips, learning can start on their schedule in the comfort of their own home.

I referenced my channel in 3 out of my 9 posts so far today.

If you have something that can help others as well, then don't hold it back. Share it.

boarder42

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Re: Need Saving / Investing advice
« Reply #34 on: January 09, 2017, 12:03:04 PM »
you keep self promoting your youtube channel in every post??? why?

I encourage anyone who wants to learn how to better make their money work for them to check out investing / finance books from their local library.

Not everyone has the patience to sit down and read a book though. I'm aiming to help many people solve a problem they have -- limited knowledge on investing. By providing short 10-15 minute video clips, learning can start on their schedule in the comfort of their own home.

I referenced my channel in 3 out of my 9 posts so far today.

If you have something that can help others as well, then don't hold it back. Share it.

lots of things like the standard JLCollinsH series which many promote here not thru self promotion of a youtube channel.  33% of posts being self promoting and a recent sign up means you signed up for that purpose