How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I am torn on whether to say nothing or to help a friend, and if I do pick the latter option, how do I even paint the picture of why a Boglehead like path is needed for this friend. His situation is as follows:
1. Fairly high earner in mid 40s (HHI ~$350K, has been above $200K for at least 7-8 years)
2. About to get laid off, wife's income is only ~$75K
3. I estimate assets excluding home to be ~$500K
4. Has made alarming statements such as the need to get a second mortgage when he gets laid off
5. Lives well beyond means from what I can tell - e.g. a $35K cruise, wanting to spend $100K+ on a child's religious initiation ceremony
6. Is very bitter about the layoff and has (IMO) unrealistic expectations when it comes to his next job
I want to help, but I don't know where to start. Curious to hear if others have intervened in situations like this and how it turned out.
1. Fairly high earner in mid 40s (HHI ~$350K, has been above $200K for at least 7-8 years)
2. About to get laid off, wife's income is only ~$75K
3. I estimate assets excluding home to be ~$500K
4. Has made alarming statements such as the need to get a second mortgage when he gets laid off
5. Lives well beyond means from what I can tell - e.g. a $35K cruise, wanting to spend $100K+ on a child's religious initiation ceremony
6. Is very bitter about the layoff and has (IMO) unrealistic expectations when it comes to his next job
I want to help, but I don't know where to start. Curious to hear if others have intervened in situations like this and how it turned out.
"It is not necessary to do extraordinary things to get extraordinary results"-Buffet| "Anytime that something is romanticized, you have to really question whether it exists"-Unknown
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Have they asked for help? If not, zip the lips.
Vanguard/Fidelity | 76% US Stock | 16% Int'l Stock | 8% Cash
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
1. Shut your mouth unless asked for advice
2. If asked for advice say "well that's tricky I've gotten great financial advice on bogleheads.org
. Why don't you post there and the wise folks there will help"
2. If asked for advice say "well that's tricky I've gotten great financial advice on bogleheads.org
. Why don't you post there and the wise folks there will help"
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Has he asked for your help? If not, I'd keep my mouth shut for now, stay close to him as he goes through the coming turmoil, and be there to provide your thoughts if he asks for them.
By the way - it sounds like he might need more "Dave Ramsey" advice than "Boglehead" advice. That is, commonsense budgeting, etc. It sounds like he has a spending problem rather than a Boglehead investing problem.
By the way - it sounds like he might need more "Dave Ramsey" advice than "Boglehead" advice. That is, commonsense budgeting, etc. It sounds like he has a spending problem rather than a Boglehead investing problem.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I avoid discussing finances with friends and family at almost all cost.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Nobody wants unsolicited financial advice.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I don't see a problem here. He is way ahead of savings compared to most people and his social security will be great. Reality is due to give him a few hard slaps, but I don't see that he's headed for disaster.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I agree in this case your best course of action is silence about finances. If they are unconcerned about budgets, costs, and expenses you could lose the friendship over any advice they might take as even a vague criticism, and they will tune it out anyway. Sadly they have to wake up from their dream in their own way.
The closest helping hand is at the end of your own arm.
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Agree that it’s best to stay quiet on this topic unless specifically asked. Even then, I am very reticent and only give general advice like “buy and hold index funds” etc.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Personally I'm happy to discuss
-What I do and why
-What I wouldn't do and why
-What I would do in a certain theoretical situation
But I don't like to give "advice". I'm just a fellow life pilgrim.
-What I do and why
-What I wouldn't do and why
-What I would do in a certain theoretical situation
But I don't like to give "advice". I'm just a fellow life pilgrim.
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I only give unsolicited financial advice to my kids.
Whether the appreciate it or not, it's not unexpected coming
from a parent. They have come to me asking for advice when making major decisions, but I always
tell them what I would do, and that they are free to do what they want, as they have to live with
the consequences.
I have shared how I invest with friends/colleagues when asked, mostly about asset allocation, and indexing.
Whether the appreciate it or not, it's not unexpected coming
from a parent. They have come to me asking for advice when making major decisions, but I always
tell them what I would do, and that they are free to do what they want, as they have to live with
the consequences.
I have shared how I invest with friends/colleagues when asked, mostly about asset allocation, and indexing.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
True, although I didn't mention that he also only invests as much as the employer matches on 401k and HSA. But overall I agree I should say nothing, in any case I believe the Ramseys and Ormans are the kind of advice he would take, if any.
"It is not necessary to do extraordinary things to get extraordinary results"-Buffet| "Anytime that something is romanticized, you have to really question whether it exists"-Unknown
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I give advice freely and often WHEN ASKED. In this case, I might say something like,
"Why are you telling me all this? Would you like any advice or just someone who listens without judging?"
"Why are you telling me all this? Would you like any advice or just someone who listens without judging?"
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
You don't, unless they ask you personally.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
The old recommendation of not discussing politics, religion and finances still holds true.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Ask him for advice about something that you think he can give you advice about. Then wait and see if he reciprocates and asks you for advice about whatever challenges he's facing.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Stay his friend. Don't try to become his advisor. If he asks for advice, keep it friend to friend and maybe suggest some resources that may be of interest.
- Taylor Larimore
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
vrr106:
Best wishes
Taylor
Give your friend one of the Boglehead Books.How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Best wishes
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”.
"Simplicity is the master key to financial success." -- Jack Bogle
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Agreed.
Although you might want to point out that people can’t get second mortgages unless they have enough income to support the loan. That’s a fact, not a criticism of his choices.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
As per the consensus, I wouldn’t say anything about finances unless asked. And even then, what would you say beyond the usual platitudes and pithy phrases about spending and saving?
Hopefully, they have an emergency fund that will pay the mortgage and other expenses until he has a new job. Otherwise, they’ll have to make tough choices, and your unsolicited advice based on assumptions and incomplete information won’t help.
Hopefully, they have an emergency fund that will pay the mortgage and other expenses until he has a new job. Otherwise, they’ll have to make tough choices, and your unsolicited advice based on assumptions and incomplete information won’t help.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I would say something if someone (even a stranger) was about to be scammed, since some of that is not obvious. (“That sounds like a scam to me”.) But this case doesn’t sound like it.
Luckily, this friend has a wife who is free to say something. Even her income alone is 50% above the national household income.
So, I don’t see a problem since they will figure out their life themselves.
PS. They probably won’t be able to get a second mortgage on their lower income. Let the lender tell them that instead of you.
Luckily, this friend has a wife who is free to say something. Even her income alone is 50% above the national household income.
So, I don’t see a problem since they will figure out their life themselves.
PS. They probably won’t be able to get a second mortgage on their lower income. Let the lender tell them that instead of you.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
You beat me to it. I don't advise friends and relatives on politics, religion or money especially if they haven't asked for help.
Now, we might have a discussion or a little debate even occasionally but discussing and listening to each other is not the same as unsolicited advice.
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Do nothing, say nothing. If asked, suggest Bogleheads for financial advice. For career, it’s a natural reaction regarding bitterness, let some time pass while empathizing with his predicament. Suggest networking if your friend has not already begun process and to focus on his new job which is to seek his next opportunity.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
What is the price of the house?vrr106 wrote: ↑Fri May 26, 2023 8:47 am I am torn on whether to say nothing or to help a friend, and if I do pick the latter option, how do I even paint the picture of why a Boglehead like path is needed for this friend. His situation is as follows:
1. Fairly high earner in mid 40s (HHI ~$350K, has been above $200K for at least 7-8 years)
2. About to get laid off, wife's income is only ~$75K
3. I estimate assets excluding home to be ~$500K
4. Has made alarming statements such as the need to get a second mortgage when he gets laid off
5. Lives well beyond means from what I can tell - e.g. a $35K cruise, wanting to spend $100K+ on a child's religious initiation ceremony
6. Is very bitter about the layoff and has (IMO) unrealistic expectations when it comes to his next job
I want to help, but I don't know where to start. Curious to hear if others have intervened in situations like this and how it turned out.
If it is expensive enough, it is too late for any advice.
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- AnnetteLouisan
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
If you value the friendship, keep finances out of it. Sad but true.
I’ve benefitted from advice and usually welcome it, but it was not welcomed when I supplied it. There is an earlier thread on this issue.
I’ve benefitted from advice and usually welcome it, but it was not welcomed when I supplied it. There is an earlier thread on this issue.
Last edited by AnnetteLouisan on Sat May 27, 2023 8:14 am, edited 3 times in total.
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
There are Bogleheads that could use some advice from friend too. Several years ago I got told by a dude on a Jeep Wrangler forum that I “needed to shoot the lock off my wallet”, and damn if he wasn’t right. I honestly owe that guy a debt of gratitude since it’s caused me to adjust my view on saving and spending probably forever, in a good way.
How could a seemingly benign comment from a smstranger on an online Jeep forum cause a card carrying frugal dude like myself to loosen up the purse strings a bit? I honestly don’t know, but I’m glad he did.
How could a seemingly benign comment from a smstranger on an online Jeep forum cause a card carrying frugal dude like myself to loosen up the purse strings a bit? I honestly don’t know, but I’m glad he did.
Being wrong compounds forever.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I've also received unsolicited advice for which I am grateful for:Wanderingwheelz wrote: ↑Fri May 26, 2023 8:38 pm How could a seemingly benign comment from a smstranger on an online Jeep forum cause a card carrying frugal dude like myself to loosen up the purse strings a bit? I honestly don’t know, but I’m glad he did.
- "You should max your 401k" - when I was 22
- "You should open a Roth IRA" - when I was in my 30's
and some I'm not so grateful for:
- "You should buy Chipotle stock!" "You should buy RIMM stock!"
- "OMG SELL THAT CHIPOTLE STOCK NOW!!!!"
- "Hold onto that RIMM Stock, it's bound to go up!"
I don't believe giving advice is a black and white situation, it's more art than science. I'm sure glad certain people in my life gave me well-timed unsolicited advice and when I feel strongly moved to do the same I do it. It's already paid off.
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Scott Burns, my favorite personal finance columnist, introduced me to index investing and Bogleheads.Wanderingwheelz wrote: ↑Fri May 26, 2023 8:38 pm There are Bogleheads that could use some advice from friend too. Several years ago I got told by a dude on a Jeep Wrangler forum that I “needed to shoot the lock off my wallet”, and damn if he wasn’t right. I honestly owe that guy a debt of gratitude since it’s caused me to adjust my view on saving and spending probably forever, in a good way.
How could a seemingly benign comment from a smstranger on an online Jeep forum cause a card carrying frugal dude like myself to loosen up the purse strings a bit? I honestly don’t know, but I’m glad he did.
He once wrote that the majority of people who wrote to him about financial problems were undersavers and overspenders. But there was a sizeable minority that had the opposite problem — so addicted to saving that they couldn’t spend.
So congrats on shooting off the lock.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
There is advice nobody can really argue with and I might give to a close friend. You don't need to have $50,000 in a non-interest checking account. They still may not take your advice.vrr106 wrote: ↑Fri May 26, 2023 8:47 am I am torn on whether to say nothing or to help a friend, and if I do pick the latter option, how do I even paint the picture of why a Boglehead like path is needed for this friend. His situation is as follows:
1. Fairly high earner in mid 40s (HHI ~$350K, has been above $200K for at least 7-8 years)
2. About to get laid off, wife's income is only ~$75K
3. I estimate assets excluding home to be ~$500K
4. Has made alarming statements such as the need to get a second mortgage when he gets laid off
5. Lives well beyond means from what I can tell - e.g. a $35K cruise, wanting to spend $100K+ on a child's religious initiation ceremony
6. Is very bitter about the layoff and has (IMO) unrealistic expectations when it comes to his next job
I want to help, but I don't know where to start. Curious to hear if others have intervened in situations like this and how it turned out.
But telling someone that should not spend $35,000 in a cruise? Good luck with that. $100,000 on a religious ceremony? They'll be mad and tell you to mind your own business.
Does your friend tell you about, brag about, their finances? I don't ask, don't tell, don't want to know those details of my friend's finances.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I'd add to all the good suggestions to not offer advice unless asked--and asked only because he really wants to consider a different path--that most people don't internalize advice given until they are ready to hear it. If you gave advice now when he clearly has ideas of his own, I think you will be shocked at how he will remember none of it a year from now.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
He is facing a new situation. I think you can give him information or direction to resources. He can decide whether or not to take it. For instance, maybe you can find an article or a boglehead post with advice on preparing for a lay off that you think has good advice and text him the link.
- burritoLover
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
While I agree that politics & religion can be poor conversation topics, finance is the opposite. There is a huge lack of financial understanding & education- and casual discussion can have a very positive effect on loved ones’ lives. I feel that the implicit faux pas around the topic of money has harmed large groups of people who should be better informed.
That said- the time to talk about insurance is not when the house is already burning down. And the time to talk about asset allocation isn’t during a stock market crash. Your friend is in a bad place, and it sounds like the blame for his financial future is being placed on the world rather than himself. I don’t think unsolicited advice is appropriate here- though as livesoft said above- give it (gently) if asked for.
That said- the time to talk about insurance is not when the house is already burning down. And the time to talk about asset allocation isn’t during a stock market crash. Your friend is in a bad place, and it sounds like the blame for his financial future is being placed on the world rather than himself. I don’t think unsolicited advice is appropriate here- though as livesoft said above- give it (gently) if asked for.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Sounds like he could use some Dave Ramsey advice!
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
That’s what makes this difficult. A lot of us who are saying “don’t” already have…burritoLover wrote: ↑Sat May 27, 2023 8:22 am What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I've watched two friends drink themselves to death, despite extraordinary interventions and nearly limitless resources.burritoLover wrote: ↑Sat May 27, 2023 8:22 am What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
I would suggest, in pretty much all similar matters: don't offer advice, ask questions.
It shows you care about your friend, and will help them come to their own conclusions.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I've taken this approach twice with people who asked my advice (knowing that I retired young). Zero for two success rate, but I'd do it again. First recipient lost his shirt in crypto. Second recipient keeps asking me if now is the right time to buy (or sell) stocks, and is also still enamored with crypto. At least I didn't waste a lot of time advising, and didn't lose a friend.Taylor Larimore wrote: ↑Fri May 26, 2023 11:54 am vrr106:Give your friend one of the Boglehead Books.How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I think you are no more likely to turn a random person into a Boglehead than an opera singer. It requires certain DNA and life experiences.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
And it is really a question of knowing when someone is ready to receive advice. Offer it too soon, and they write you off.AnnetteLouisan wrote: ↑Sat May 27, 2023 9:06 amThat’s what makes this difficult. A lot of us who are saying “don’t” already have…burritoLover wrote: ↑Sat May 27, 2023 8:22 am What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
That's a tragedy for sure but aren't you glad you at least tried? Certainly there are many suggesting to not even ask any questions.matthewbarnhart wrote: ↑Sat May 27, 2023 9:18 amI've watched two friends drink themselves to death, despite extraordinary interventions and nearly limitless resources.burritoLover wrote: ↑Sat May 27, 2023 8:22 am What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
I would suggest, in pretty much all similar matters: don't offer advice, ask questions.
It shows you care about your friend, and will help them come to their own conclusions.
- AerialWombat
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Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Totally disagree. These are the three best subjects to bring up, especially at family holiday gatherings.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
The obstacle is that you can’t help some who doesn’t want help.burritoLover wrote: ↑Sat May 27, 2023 8:22 am What kind of friend are you if you are willing to watch your friend go down in flames and do nothing about it? Suppose you thought your friend was drinking too heavily. Would you only offer them advice/help if they recognized the problem themselves and asked you about it? Or would you try to be proactive to help your friend because you care about them?
Which is why asking “Are you looking for ideas or just venting?” is the best approach. You are making yourself available.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
I have similar thoughts. The rigidity around these topics amazes me. How would a person explore other perspectives?AerialWombat wrote: ↑Sat May 27, 2023 9:36 amTotally disagree. These are the three best subjects to bring up, especially at family holiday gatherings.
Re: How does a Boglehead advise a friend on financial matters when you think they are in need of advice?
Imagine how you would feel if a fit friend started offering you unsolicited gym and dieting advice.
Best not to say anything. Not your problem
Best not to say anything. Not your problem