Some of my friends and coworkers have been surprised to hear that I write a Personal Finance blog. I admit it's a little out of character for me. Like when I bought and drove a Volvo. But I thought I'd share why I got into this.
In 1999 I got a 8-5 full-time Job plus some freelance weekend work. This left me with a little extra cash. I was not used to this so I sought a way to invest it so I wouldn't spend it on stupid crap. Which was my modus operandi at the time (More on Sam's club later). I got an advert from American Express Financial and decided it was time to talk to someone.
I met with Adam. A young fresh suit who was there to help. He talked me into a "Whole life" plan. Which was an insurance product that "grows" tax free but the fees for these accounts can run from 2%-6%. It's hard to tell because financial insurance products are not regulated by anyone. Not even the SEC. So they do not have to explicitly disclose all of the fees associated with a fund. They are most often buried deep in the fine print.
I met with my accountant a few months later to do my taxes and informed him of WHAT I HAD DONE! He smirked and told me to get out and get out fast. He asked me how much I was into this scheme. About a thousand bucks, I replied. Kiss it goodbye, he said. It's like a band-aid, Just rip it off. You will do nothing but bleed cash to these people if you stay there. So I fired Adam the next week, forfeited one thousand bucks, and have never been happier. Adam was shocked and when he demanded to know why I was getting out, All I had for the guy was "My accountant told me to run". Stay away from insurance products unless you know what you're doing they have a very small niche that 99.9% of do not need.
This financial waste made me ask myself - Who has your best financial interests at heart? YOU DO!. Well you better get financially literate quick. So that's it. I have been interested in it as a serious hobby for 10 or 11 years now.
So feel free to ask a question. I learn as much or more from the process. You can email me and ask for your question to be anonymous. I will strip out any ID details. Don't get ripped off like I did!
thefettler@yahoo.com
The title of your post says it all. After the 2008 bubble and crash, I kept hearing people say they didn't want to have their money in the stock market. But they all have 401Ks; their money IS in the stock market. They would respond that the 401Ks are being managed by someone who "knows more." JUST BECAUSE SOMEONE KNOWS MORE DOESN'T MEAN S/HE HAS YOUR INTERESTS AT HEART.
ReplyDeleteMost people managing retirement plans receive bonuses based on quarterly earnings so they have incentive to create short-term gains which is exactly the opposite of what retirement planning should be. I don't think most people realize that they may not even be able move their money to another company if they don't like the options available with their employer. Frankly, I think there is too much focus on retirement savings; what if I want to access my money in my 40s or 50s? Wake up people! Educate yourselves!