How Much Do You Pay for Financial Advice?

There was an interesting article in today’s WSJ about the impact of automation on the financial advice business.

Quick summary: automation is forcing costs down from the traditional 1% annual fee.

I expect we’ll see more advisors moving to the hourly structure from the asset-based fee structure.

My question to you is:

Do you use a financial advisor or planner? If so, how much do you pay? If you don’t know, ask your advisor.

Why You Should Always Be Ready for a Market Sell-Off

Interesting:

Why You Should Always Be Ready for a Big, Scary Stock Market Sell-Off

Here’s how I normally deal with sell-offs:

1) I don’t look at the 401(K) balance. It’s not going to do me any good to do so because it’s not going to change our strategy.

2) I think of all the additional shares we are going to be able to buy at lower prices. Think of the sell-off as a giant SALE!!!!

3) I increase the contribution amount if possible. We are contributing the maximum now, so we won’t be able to do that.

Trader Joe’s Has Some Unhappy Employees

[Rant on…]

Are we becoming a nation of spoiled wimps?

Based on this article I read in Sunday morning’s Houston Chronicle, I would say the evidence is mounting that we are.

Trader Joe’s has been a shopper’s favorite for years now. They have a great reputation of friendly service and great prices, but the article postulates that employees are encouraged to act like they are in a good mood even when they are not.

From the article:

“…in recent years, the patina of good cheer has masked growing strife and demoralization in some stores on the East Coast, far from the company’s base in California. A number of workers, known at Trader Joe’s as ‘crew members,’ complain of harsh and arbitrary treatment at the hands of managers, of chronic safety lapses and of an atmosphere of surveillance.

“…some employees say they are pressured to appear happy with customers and co-workers, even when that appearance is starkly at odds with what is happening at the store.”

And there’s this…

“Other employees in stores across the Northeast and Middle Atlantic regions, who spoke on the condition of anonymity to protect their jobs, echoed Nagle’s description of stockroom hazards and managers’ behavior. A worker in Brooklyn said that if two workers spoke to one another for more than a minute or two while on the job, often a manager would appear and ask, ‘What’s going on?'”

It’s amazing that Trader Joe’s can has any employees at all based on those deplorable conditions. How horrible! (Yes, that was sarcasm.)

I have an idea! If you work for a company that is so horrible that you have to fake being nice, then quit. Go work somewhere else. I can’t even believe the New York Times would publish such drivel.

[…rant off]

8 Reasons Why I Loathe Social Security

I know lots of people love social security. I know lots of people consider social security a successful government program. I disagree.

A comment left in my previous post about the 2017 changes coming to social security, inspired me to list out what I don’t like about the program.

So, here they are:

1. I don’t like the underhanded way Roosevelt went about passing the social security act in threatening to pack the Supreme Court.
2. I’m not a fan of the government confiscating our money with the promise of giving it back to us at some later date.
3. I don’t like the government confiscating our money, but still taxing us on it as if it was our money.
4. I don’t like the government taxing social security payments.
5. I don’t like the government deciding how much “other” income is allowed before social security payments become taxable. Those who are diligent in saving for retirement will be penalized.
6. I don’t like that social security is a pay-as-you-go plan, which means current recipients’ payments are funded by current workers. At the very least, the plan should have been set up as separate accounts.
7. I don’t like that the income subject to confiscation keeps going up each year.
8. I don’t like that social security has given many people a false sense of financial security, which leads many people to not save for retirement.

I’m sure there are other things I could find that I don’t like about social security, but this is a good start.

I feel the program could have been much better had it been set up as individual savings accounts rather than the pay-as-you-go plan. FDR knew what he was doing when he set it up the way he did. He knew if he set it up as a pay-as-you-go plan, it would never be done away with.

Meet Glover Quin

This is a great piece about financial savvy of Detroit Lions safety, Glover Quin. Doesn’t happen often enough.

He saved 70% of his income the first three years of his NFL career and lived on the other 30%. Too many young players get the big money and go on wild spending sprees. Not Mr. Quin. He not only saved 70% of his income, he INVESTED it. Now 30-years old, Mr. Quin might be lucky to have five more good years. If he continues at his current pace, he should be able to retire and live comfortably the rest of his life.

I wish him the best.

COLA for 2017 Social Security Recipients: .3%

I just saw that the Cost of Living Adjustment (COLA) for social security recipients is going up a whopping .3% (yes, that’s point three percent!).

What really stinks is the amount of income subject to confiscation (that’s really what it is, you know) is going up from $118,500 to $127,200, a WHOPPING 7.3% INCREASE! That means those who make enough will see an additional $539 confiscated from their checks.

Longtime AFM readers know how much I loathe social security.

Source: Social Security Administration Press Release