Advice to friend?

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Topic Author
Ladeedaw
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Joined: Thu Aug 09, 2018 1:16 pm

Advice to friend?

Post by Ladeedaw »

I was visiting with a friend recently. He talked about how he's really looking forward to retirement and would like to retire sooner. He's 52, planning to retire at 65. I asked if he thinks he could retire a few years earlier. He said it depends on how his investments go. I know he has used Edward Jones his whole life and suspect that has hindered progress. I've read a few threads where people ask how to help their friends and the advice is: don't say anything. So I bit my tongue and said nothing. But I keep thinking about it. I don't want to know his financial details or get into specifics. But he's a smart guy, DIY in many ways, numbers savvy (engineer). I know they live frugally, house paid off and own several acres of land outright. Seems like he'd be lined up to retire earlier than 65. Is there a good way to suggest he look into a few BH type resources and then just leave it at that? Part of me feels bad not saying anything. But I also understand the sentiment that it's better to say nothing.
manatee2005
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Re: Advice to friend?

Post by manatee2005 »

Say nothing.
infotrader
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Re: Advice to friend?

Post by infotrader »

Say nothing. Also, he did not ask for your advice.
Silk McCue
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Re: Advice to friend?

Post by Silk McCue »

I personally will never pay AUM fees and we hold a low cost broadly diverse portfolio.

You simply cannot know whether or not he would have been better off without EJ. My brother-in-law has AUM accounts at ML and EJ. When I compared his Total return for 2020 against a VG Lifestrategy of a similar asset allocation, the EJ and ML accounts net of fees outperformed the LS fund (not dramatically but measurably). I don’t declare they can do that every year but simply point out that your friend may be doing just fine with EJ and likely isn’t taking a significant hit net of fees with his performance if any.

I would not get involved with your friends financials.

Cheers
Misenplace
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Re: Advice to friend?

Post by Misenplace »

This topic is now in the Personal Finance (Not Investing) forum.
runner3081
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Re: Advice to friend?

Post by runner3081 »

Here is the reality. Who says what you know or do is even right? He is doing what works for him and feels fine with it. Not everyone is interested in fully optimizing every last penny or way they live their life.

Personal finance :)
Doctor Rhythm
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Re: Advice to friend?

Post by Doctor Rhythm »

If it comes up again, you might suggest that your friend visit this forum and say how much it helped / taught you. Say more if he’s interested, and drop it forever if he isn’t.

Also, retiring early may not be his aspiration.
retiredjg
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Re: Advice to friend?

Post by retiredjg »

If he didn't seem like he was looking for advice, I think it is better not to say anything. You might leave one of the Bogleheads' books lying around and see if he seems interested in borrowing it.

If he did seem to be hoping for advice, you could mention (if it comes up again) that fees slow down investment growth and that EJ is not a low fee advisor.

My observation is that most people are absolutely convinced that using an advisor is helping them, even if they know they are paying for it. Most will not believe anything you say unless they are already on the verge of discovering it themselves.
Topic Author
Ladeedaw
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Re: Advice to friend?

Post by Ladeedaw »

Ok got it. Just what I needed: resolve to keep saying nothing. Thanks!
Luckywon
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Re: Advice to friend?

Post by Luckywon »

I learned about index fund investing because a friend gave me unsolicited advice. I have offered basically unsolicited advice to a few people, in the form of referring them to this forum or recommending books. Some have been grateful and the act has greatly enhanced my friendships with them. Others have not been receptive, though have never reacted negatively. I've never regretted trying to help, or perceived that it affected a relationship negatively.
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gr7070
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Re: Advice to friend?

Post by gr7070 »

Ladeedaw wrote: Sun Mar 21, 2021 3:09 pm the advice is: don't say anything. So I bit my tongue and said nothing.
That's some folks' advice. I think that's horrible advice.

You can very easily and kindly tell this person there are likely ways to get better returns with lower fees and that might make the difference he's looking for.

Tell him for a highly capable, DIY-guy like himself he's probably better off making some changes. Ask if he's interested in talking further.

You can have a few charts ready on your phone showing how much money fees cost him and how much better index funds are.

No need to pressure him. You should be able to judge the response and whether you should go on, retreat, broach again after the seed has been planted, etc.

A true friendship can handle this easy conversation, even about a sticky subject that money can be.

I despise the keep quiet attitude. I'll happily broach helping people who are far less than friends. One doesn't have to be obnoxious about trying to help.
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gr7070
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Re: Advice to friend?

Post by gr7070 »

Luckywon wrote: Sun Mar 21, 2021 4:19 pm ... I have offered basically unsolicited advice to a few people, in the form of referring them to this forum or recommending books. Some have been grateful and the act has greatly enhanced my friendships with them. Others have not been receptive, though have never reacted negatively. I've never regretted trying to help, or perceived that it affected a relationship negatively.
My exact experiences, as well.
TRC
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Re: Advice to friend?

Post by TRC »

You could always gift him books that may help him come to his own conclusion. One that did it for me was John Bogle's "Little Book of Common Sense Investing".
retiredjg
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Re: Advice to friend?

Post by retiredjg »

I think there is a difference here between people we know, acquaintances, work friends, friends from way back, close friends, family we see once a year and family who are in our inner circle.

There are things I might say to someone close that I would not say to an acquaintance or work friend.

"I was visiting with a friend recently...." does not really tell us what the relationship is. But it seems it might not be a very close relationship or that would have been mentioned.
livesoft
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Re: Advice to friend?

Post by livesoft »

I'd say, "I retired at age 50. I would not mind if you asked me how I did that."
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JoeRetire
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Re: Advice to friend?

Post by JoeRetire »

Ladeedaw wrote: Sun Mar 21, 2021 3:09 pmIs there a good way to suggest he look into a few BH type resources and then just leave it at that?
Tell him to check out this website?
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rlchambers
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Re: Advice to friend?

Post by rlchambers »

livesoft wrote: Sun Mar 21, 2021 6:01 pm I'd say, "I retired at age 50. I would not mind if you asked me how I did that."
Hey, I will ask?
livesoft
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Re: Advice to friend?

Post by livesoft »

rlchambers wrote: Mon Mar 22, 2021 2:22 pm
livesoft wrote: Sun Mar 21, 2021 6:01 pm I'd say, "I retired at age 50. I would not mind if you asked me how I did that."
Hey, I will ask?
Dual income household saving/investing the entire gross income of the higher paid spouse for 25 years and living off the income of the lower paid spouse. The lower paid spouse is still working because they like their job. Also learned about taxes and index funds early in marriage. Vanguard client since 1982.
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Coltrane75
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Re: Advice to friend?

Post by Coltrane75 »

Ladeedaw wrote: Sun Mar 21, 2021 3:09 pm I was visiting with a friend recently. He talked about how he's really looking forward to retirement and would like to retire sooner. He's 52, planning to retire at 65. I asked if he thinks he could retire a few years earlier. He said it depends on how his investments go. I know he has used Edward Jones his whole life and suspect that has hindered progress. I've read a few threads where people ask how to help their friends and the advice is: don't say anything. So I bit my tongue and said nothing. But I keep thinking about it. I don't want to know his financial details or get into specifics. But he's a smart guy, DIY in many ways, numbers savvy (engineer). I know they live frugally, house paid off and own several acres of land outright. Seems like he'd be lined up to retire earlier than 65. Is there a good way to suggest he look into a few BH type resources and then just leave it at that? Part of me feels bad not saying anything. But I also understand the sentiment that it's better to say nothing.
I wouldn't say anything.
surfstar
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Re: Advice to friend?

Post by surfstar »

I would think that there's a good chance that your friend is assuming his investments + SS must equal the same income they have now.

I'd simply point out that expenses are more important than income, when projecting retirement. Perhaps they have not though of it that way. You can provide advice and direction without ever touching the EJ dilemma.
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tennisplyr
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Re: Advice to friend?

Post by tennisplyr »

Without influencing his decision, you can point out some valuable resources that might help home make that decision. I retired @61 and things have been going great on a lot of levels. Encouragement is better than discouragement.
Those who move forward with a happy spirit will find that things always work out.
30west
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Re: Advice to friend?

Post by 30west »

If this were my freind, instead of offering advice, i would try to have a conversation about retirement and future plans. You could share your thoughts on the subject without making it sound like its a sugestion. Maybe even ask your friend what he thinks YOU should do. This will reviel his thinking on the subject and your conversation could evolve to where you compare and contrast different strategies. He my be very comfortable in his situation and be closed to any other ideas and at that point you need to change the subject.
BatBuckeye
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Re: Advice to friend?

Post by BatBuckeye »

If the subject of investing comes up I simply say I'm a fan of Bogleheads.org.
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Sandi_k
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Re: Advice to friend?

Post by Sandi_k »

I have collected through the years various articles, spreadsheets, PDFs, images on fee impact, etc. I keep them in a Google folder.

Every now and then, someone I know will say "Hey, I hear you're a finance nerd, can I pick your brain?" And I tell them that I will bore them to tears, no question, but I am happy to share the Google folder, and answer specific questions once they've had a chance to review some materials.

I do have one document I've entitled "Getting Started" - and it includes links to Bernstein's "If You Can" PDF, the John Oliver rant about investment ripoffs for his show's 401(k) accounts, some budgeting forms for the 50/30/20 balanced money formula, and some archived articles and blog posts that are not too challenging for newbies - such as a Lazy Portfolio construction post from Get Rich Slowly. The whole idea is to give them viewing, reading, and nerdy resources.

*IF* they read that Getting Started document, they're ready to actually pay attention. I am happy to say that I have had ~ 20 people through the years who listened, paid attention, and made changes for the better - including a brown bagging-lunch group at work, where we meet every couple of months to share topics and insights.
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