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-   -   What would you with $20K? (http://archives2.twoplustwo.com/showthread.php?t=403421)

lastsamurai 12-28-2005 04:44 AM

Re: What would you with $20K?
 
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very true eastbay, financial advisors are for the dumb and lazy

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On the flip side, people like Suze Ormon seem to have made an entire (probably lucrative) career out of telling people to pay their highest interest loans first and to take advantage of their employer's 401k. So not to detract from Dan's idea too much... advisors may be for the stupid but that's a big market.

eastbay

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I have to disagree with you. I know there are a few bright people on this site but one broker cant follow all 50,000 different mutual funds and stocks out there...if you work with a broker atleast you get a second opinion. Most of the Big ticket clients have 5-6 brokers nation wide...its their form of diversification... Do you think a doctor or a lawyer has the time to sit in front of his computer and analyze stocks all day? If your broker/cfp has a good track record why try to reinvent the wheel...look what happened to those investors who thought they didnt need a broker...opened up an account with etrade in 1999...saw JDSU triple in 3 months only to see it go below 10. If you have the discipline to screen your stocks and pick winners..more power to you...

eastbay 12-28-2005 09:17 AM

Re: What would you with $20K?
 
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
very true eastbay, financial advisors are for the dumb and lazy

[/ QUOTE ]

On the flip side, people like Suze Ormon seem to have made an entire (probably lucrative) career out of telling people to pay their highest interest loans first and to take advantage of their employer's 401k. So not to detract from Dan's idea too much... advisors may be for the stupid but that's a big market.

eastbay

[/ QUOTE ]

I have to disagree with you. I know there are a few bright people on this site but one broker cant follow all 50,000 different mutual funds and stocks out there...if you work with a broker atleast you get a second opinion. Most of the Big ticket clients have 5-6 brokers nation wide...its their form of diversification... Do you think a doctor or a lawyer has the time to sit in front of his computer and analyze stocks all day? If your broker/cfp has a good track record why try to reinvent the wheel...look what happened to those investors who thought they didnt need a broker...opened up an account with etrade in 1999...saw JDSU triple in 3 months only to see it go below 10. If you have the discipline to screen your stocks and pick winners..more power to you...

[/ QUOTE ]

I thought the one thing we could agree upon was that

1) you don't have to "pick winners"
2) the people who supposedly can, can't. c.f. the already discussed mutual fund "expert advice" theory.

and if you say "Warren Buffett can", fine, buy Berkshire Hathaway.

eastbay

gjpure 12-28-2005 11:19 AM

Re: What would you with $20K?
 
Equity Indexed Annuities and Fixed annuities can fit that catagory, as can certain private REITS. I all depends on how you define risk, but EVERY investment holds some degree of risk, it just depends on if you are comfortable with that risk or not.


The other guy's idea on being a financial planning to only poker players is an interesting one. But I wonder: How do you know if the "niche" is big enough, and how would you find your clients and convince them to start investing their money. Certainly, many are making a lot of money at a young age, but they also have school loans, debts, bills, etc. that dissapate later in life. So I wonder how profitable it would be to a financial planner. Regardless, however, if you have any significant amount of cash just sitting in a bank and are not sure what to do with it, interview several financial planners and go with one that makes sense and with whom you feel comfortable. After all, it's your money. You may have bluffed it fair and square!

Sniper 12-28-2005 12:26 PM

Equity Indexed Annuities
 
Equity Indexed Annuities are fairly complex investment vehicles... a definately "read the fine print" before locking your money away type of investment.

One example warning on these investments

SEC comments on Equity Index Annuities

NASD Alert on Equity Indexed Annuities

CNN Money article

buffett 12-28-2005 01:29 PM

Re: Equity Indexed Annuities
 
Wonderful post, Sniper. I love it when we agree on something, and I especiallly like situations like this one where I vehemently agree with you.

Here's my favorite quote from your links: "the high commissions equity-indexed annuities offer create a huge conflict of interest for the advisor. If you were an advisor and had the choice of making 2% or 15% on an account, which would you choose? Is it any wonder equity-indexed annuities have become so popular?"


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