Re: professional money management

Make sure you get the ADV part 2 from any planner you talked with, it
explains what they do and is filed with regulators. They should give it to
you without your asking and have you sign for it.

If they don't do it or claim it is boring or any other excuse, you don't
have a planner in front of you but a stock broker or insurance salesman
instead.

"R. Anton Rave" <[EMAIL PROTECTED]> wrote in message
news:[EMAIL PROTECTED]
> [EMAIL PROTECTED] (MikeW33662) wrote in message
news:<[EMAIL PROTECTED]>...
>
> >I'm 46 yrs old, earn about $250K/yr, and have a net worth of
> >approx $1MM. About $400K of that is in cash, gathered over the
> >years by an aggressive savings plan and cashing in stock options
> >granted by my employer.  The rest is in my home, my 401K, a few
> >boring mutual funds, and unexercised stock options.
>
> Accumulating $1M on an income of $250K/year by age 46 isn't remarkable
> because I know many people of our age group who have $1M but who make
> far, far less income.
>
> I assume that the aggressiveness of your savings plan has been due to
> saving a high percentage of your income (but maybe less than the 95%
> that Oprah saves), not from earning high returns, which don't exist
> with conservative investments.
>
> >I consider myself to be a rather conservative person and have
> >been generally wary of the stock market.  I recently met, however,
> >with a senior vp of investments at Smith Barney.
>
> Either Smith Barney's senior VPs meet with everybody or Smith Barney
> has a lot of senior VPs because $1M and $250K/year isn't normally
> enough for a stranger to meet a top person at a company that large.
> But at some companies the title "VP" is as common as "supervisor" at
> McDonald's, and I hope you're not a vain person who's impressed by
> titles or other people's wealth because that can impressed you out of
> your money.
>
> >Given my current assets and cash flow, she believes that Smith Barney
> >can make me very wealthy over the next 5 - 10 years.
>
> Your $250K income, combined with a low rate of spending, not
> investment returns, are what will make you very wealthy over that time
> because they matter much more than whether your investments earn 0% or
> 15% a year (and 15% is an unrealistically high expectation).
>
> >SB wants to put me into 60% equities (mainly large cap) and 40%
> >bonds.  They want to charge me an annual fee of 1.8% of the amount
> >in my account that they're actively managing (up to the first $500K,
> >with the percentage dropping off as the amount increases).
>
> 1.8% on the first $500K is as much as 10 times what some other
> companies charge for first $5K, and with conservative investments,
> 1.8% is going to be a huge chunk of your net profit, maybe as much as
> 1/3 to 1/2.
>
> Talk to some fee-only planners, and be sure they really are fee-only
> because many also do commission-based planning (more potential for
> conflicts of interest), and most planners who say they're fee-only
> won't state this in writing (more potential for successful lawsuit).
> But fee-only isn't a guarantee of intergrity, and you still need to
> keep your costs down.  And while any planner who won't show you his
> track record should be avoided, don't judge a planner just by
> performance because it's fleeting (the smarter investment of the late
> 1990s underperformed the stupider ones, while the opposite became true
> for the first few years since 2000), and planning involves a lot more
> than investments but also taxes, insurance, and estates.  Also don't
> get involved in aggressive tax shelters -- sure, use tax breaks like
> 401Ks and 529 plans and tax-free bonds, but limited partnerships
> designed to scam the IRS aren't worth the trouble.