Yours unruly subscribes to a few financial newsletters.
Some big names, too.
I find most of them amusing, in a Uncle Fester sort of way.
One famous advisor (a real ex-spurt) writes:
“According to Chicago-based investment research company Morningstar, the Vanguard S&P 500 Index Fund Admiral Shares (ticker symbol: VFIAX) has earned 7.82 percent annually over the past decade as of Aug. 8, 2016…”
Now wait just a g*ddamn minute.
You mean to tell me the market can earn little ‘ole me 7.82%? Fabulous. Where do I sign up?
So, I mosey on over to Morningstar to check it out. What does yours unruly find?
Well, we finds us somethin called “fund return” and “investor return.”
So, I click over to “investor return.” Naturally, I go hunting for my YUGE returns.
Where they be? Show me this magic.
It’s not there. I do see a 10-year return of 7.50%…and a 15 yr return of 6.53%. Hmmmm…I’m probably going to be in this for the long-haul…and if I was investing 10 years ago…I was probably investing 15 years ago…
OK, well…that’s still good but it ain’t 7.82% (this was what the fund itself made, not what investors actually received).
Let me subtract fees. Ohhhh. Only 0.05% fee. Sweet. So…that brings me down to 6.48%. But…I don’t want to get hammered by taxes every year. Oh look. This advisor just happens to set up IRAs.
Hmmm…he’s gonna charge me an hourly fee though. According to this advisor, the hourly fee model is the way to go…and “it hurts so good.”
I dunno about that. So far, it’s hurting me pretty badly.
When I retire, I’ll have to pay tax. Let’s see…if I pay 20% in taxes…that’s an after-tax yield of about 5.18%. If I pay 30% in taxes, it drops to 4.53%.
This doesn’t sound like such a great deal anymore. My stupid insurance policy can earn more than that without sacrificing liquidity.
And…I didn’t even adjust for dollar-cost averaging losses or rolling returns because, honestly, what’s the point? Incidentally, those two things alone can drag down returns up to 60%.
Mind you, this is also one of the best mutual funds Vanguard offers. No offense to them since they can’t do much about what the stock market returns…or …taxes…or investment advisor fees…
Anywho…I go lurking around the Interwebs looking for where else this advisor has dropped some stinky truth bombs. Oh look. He’s a columnist for a major news outlet. Oh look…he comments on blogs too…
Oh look, he wrote a snarky response to someone (not me) questioning his advice:
“If I really knew how to get rich, I wouldn’t write a book about it. If I shared my secrets, they wouldn’t be secret any longer and I could no longer get rich from it.”
Wait dood. So…you’re telling me your advice is all bullshyte then?
OK, Look. I’m not against investing. I’m not against the stock market. I don’t think you should have to choose between insuring your savings and investing.
In fact, if you join me and come to the dark side…
…I’ll show you how to do both…and get the returns of both…simultaneously.
Will you get rich? I have no Eartly idea.
My goal is to help you save more money (using your current income) than you could save any other way. What you do with it from that point on is your biz-naz.
With that being said…I do want to say…investing ain’t no game. It ain’t easy. Just because I ain’t against it doesn’t mean I think you should rush into the arms of any old investment advisor or open up a self-directed IRA.
Don’t hop into the financial goo-roo’s windowless van. There be dragons.
At the same time, don’t be afraid to learn about investing.
Insurance lets you grow your savings while you figure it all out. And, if or when you’re ready to risk your savings…you’ll stand to make more money than if you tried to do this any other way.
I’m hosting a webinar that breaks it all down for you…step by step.