Investing for income?

[Afhunter1]

My financial advisor charges .89% of net assets.

no commissions, no funding fees, no rebalance fees, no trading fees, etc.

My FA’s receive no pay other than from clients

They use mainly stocks and eft’s and a few vanguard admiral funds.

My fees are as low with them as what I could do on my own using vanguard funds but I have someone watching daily. Your description of a FA applies to the Edward Jones type but not all.

 

[Afhunter1]

Mine is also a Robo/advisor mix and the bot part of it is in charge of rebalancing almost constantly. I think there was almost 4K trades in my accts last year.

When your investing in those s&p 500 funds your basically putting your money in a tech fund right now. That’s not how diversification works.

 

[fwafwow]

As always you can take this to whatever level you want - whether it makes sense or not. Like cartridge debates - if a .308 will work, why not .243, or .223....

[snip]

So there ya go....education lowers "risk" in all things.....

I may be missing something, but I am not sure how this relates to the conflict of interest tangent that @SDHNTR and I went off on, but I have no qualms or issue with anyone doing this on their own - more power to you. I'm not familiar, however, with any FA that is handling assets on a discretionary basis that is charging fees for new money being added to the account, for realigning a portfolio, for consults, etc. But your point is still valid - if you can get the same or better performance with lower costs/fees, you will do better.

 

[SDHNTR]

Then there's the back door - the advisor gets additional fees to invest new money to the account, gets fees when he "realigns" my portfolio, additional fees for consults, whatever. Now I'm up to say 2% plus in annual fees....

The more "activity" an advisor makes the more he gets. Or he can do "nothing" and get his 1%. He also can get "kickbacks" / incentives or whatever from funds for having their clients invest in them.

Absolutely not how it works. This is utterly wrong. The whole point of a fee-based, fiduciary arrangement is to prevent activity such as this. And Kickbacks have been long gone for at least 10+ years.

I also have zero problem with anyone doing their own investing. More power to you. But please do not spread misinformation about those of us who make an honest living in the industry.

 

[SDHNTR]

Mine is also a Robo/advisor mix and the bot part of it is in charge of rebalancing almost constantly. I think there was almost 4K trades in my accts last year.

When your investing in those s&p 500 funds your basically putting your money in a tech fund right now. That’s not how diversification works.

Very good point here about the S&P 500. It’s definitely not really 500 anymore! And a lot of people don’t even realize that. Many still think it is a broadly diversified mix of 500 US blue-chip stocks. When tech eventually corrects, S&P 500 indexor’s could be in for a rude awakening. Those who are investing in this index would really stand to benefit by studying the definition of a Cap Weighted index, and how it currently applies to the S&P 500. It’ll be an eye-opener, guaranteed!

 

[MattB]

Noted that Bitcoin was down 17% in intra-day trading, which made me think of this thread.

 

[fwafwow]

Noted that Bitcoin was down 17% in intra-day trading, which made me think of this thread.

BTC is only down ~11.5%, it's Bitcoin Cash that is down 17%. Tongue firmly planted in cheek. But both are probably incorrect by the time this post gets read by anyone.

 

[Justinjs]

Absolutely not how it works. This is utterly wrong. The whole point of a fee-based, fiduciary arrangement is to prevent activity such as this. And Kickbacks have been long gone for at least 10+ years.

I also have zero problem with anyone doing their own investing. More power to you. But please do not spread misinformation about those of us who make an honest living in the industry.

Not trying to stir the pot.
Could he be talking about non-fiduciary advisors? Are those still a thing?

 

[z987k]

Not trying to stir the pot.
Could he be talking about non-fiduciary advisors? Are those still a thing?

Still a thing and still taking people for a ride every day.

 

[SDHNTR]

Not trying to stir the pot.
Could he be talking about non-fiduciary advisors? Are those

Not trying to stir the pot.
Could he be talking about non-fiduciary advisors? Are those still a thing?

Non fiduciary brokers are still out there, but are a dying breed. Even still, any broker, fiduciary or not, still has compliance and federal regulation to contend with. Churning is illegal. Kickbacks and premiums paid for proprietary products have either been federally banned or at least limited by even the most low rent firm’s compliance departments for years! Not to say shenanigans don’t still happen, but I think they are far from common.

 

[buragoz]

How much do you have? How much do you need to generate? What is it for? What is your risk tolerance? You need to start with these questions and go from there.

How much do you have? How much do you need to generate? What is it for? What is your risk tolerance? You need to start with these questions and go from there.
Yeah...this are the questions that you should ask before starting investing in something. I asked myself all the time "what is it for?" and at the beggining I didn't knew a thing about how to start investing but, I found this site investedwallet.com that helped me learn and make money even when I'm driving. I began with this when I was toward the start of my "vocation "and now I can say that I carry on with an extravagant life.

 

[bozeman]

Maybe I am off base here, but open to some feedback. Like the OP, my strategy is to generate income, but only to help support my 401k and Pension from work.

Add up monthly expenses (bills, utilities, etc), invest in companies/ETFs with dividend yields in various sectors to pay that Bill each month.

Ex:
Electric Bill $150/mon. Invest enough in Southern Co to yield $1,800/yr in dividend

Cell Phone Bill $120/mon. Invest enough in ATT/Verizon to yield $1,450/yr in dividend

Just a strategy being employed to get some targets and generate income.

Best of luck to the OP!

 

[SDHNTR]

My financial advisor charges .89% of net assets.

no commissions, no funding fees, no rebalance fees, no trading fees, etc.

My FA’s receive no pay other than from clients

They use mainly stocks and eft’s and a few vanguard admiral funds.

My fees are as low with them as what I could do on my own using vanguard funds but I have someone watching daily. Your description of a FA applies to the Edward Jones type but not all.

This is how it should be.