Anyone here having to consider bankruptcy?
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[quote=BondGuy]Thanks Ice!
RobynG- just havin' a little fun. Still, where did my posts lack historical perspective?[/quote] I thought you were being a little hard on younger people who can't seem to make ends meet today. And I was simply pointing out that the cost of living for a lot of basics (like housing and education and cars and health care - etc.) has gone up a lot more than incomes since we got out of school. And it was possible to indulge in some pretty nice things when you started to make some money without "breaking the bank". For example - we enjoyed our first 3 star dining experiences in France when we were in our late 20's. Dinner for 2 ran about $100-150. Today - you're talking low 4 figures for the same meal. Even the CPI - which badly distorts the true cost of living as a result of things like "owners' equivalent rent" - hedonics (you can read stuff like this http://seekingalpha.com/article/24933-substitutions-and-hedonics-inflation-data-absurdities) - and leaving out items that almost everyone pays (like taxes and insurance)says you need 5.2 (after-tax) dollars today for every dollar you needed in 1971. IOW - I have some sympathy for the younger person who is starting to make some good dough - but finds that it doesn't go as far as he thought he would (not so much sympathy though that I think that person should "overleverage" to buy a lifestyle bigger than he can afford). Perhaps I have you confused with someone else in terms of being a little hard (in which case I apologize) - but that was my point. Back to the garden to finish today's "to-do" list. Robyn[quote=Mishigun]
Ha ha, well, for you kids and old folks alike, if you get a chance, visit the Jimi Hendrix museum in Seattle. Easy on the Purple Haze, though. For my part, maybe a little of what BG feels, I’d much rather work with people who have money, than train folks to skip lattes and fund their IRA. And I’m going to enjoy my life. Because compound interest (minus expenses) has been negative over the past years, I’m glad I went for the big house and nice lifestyle. Robyn, you’ve been a good girl, good for you! Now go out a stimulate this economy!
[/quote]Right, because as we all know it makes far more sense to use the returns of the last few years to make your investment decisions, as opposed to buying things when they are cheap.
Good luck with that big house and that big monthly nut too.
I haven’t made a car payment for 18 months now, and if all goes according to plan I’ll never make one again. If I have to drive an older car for an extra year before I trade up to accomplish that, it’s all good with me. I’m committed to continually building my net worth, not my expenses. That’s a much bigger thing than “skipping lattes so I can fund an IRA”, and I make every effort to teach that to my clients and my kids too.
After all, there’s a HUGE difference between being wealthy and merely having a nice income.
I’m sure no one will “win” this pissing contest. You’re right, for you, of course.
The kind of wealth and net worth I'm building doesn't live in IRAs. Part of that is investing in a couple of businesses and generally wasting less in taxes by aligning personal and business interests. I'm sure a few here know what I'm talking about. Yes, I know how run a fleet of used luxury cars. As for compounding at 6% using fixed income in IRAs, that "nice". Heck, take the latte money and buy some insurance, at the very least.Mishigun - You might have forgotten there are people with rollover IRAs from qualified pension/profit sharing plans (lawyers like me and my husband - doctors - etc.). Ours are in 7 figures - and we know people in the same situation. Although we have put some of the rollover money into Roths - there is no way to move all of it without having one huge current tax bill. Which doesn’t make sense when you’re over 60 - not enough time to make up the money lost on taxes. I’ve gone over this with our accountant - and run some “what if” spreadsheets. Best we can figure out - if you’re over 55 - and live an average life span (or shorter) - the math of the conversion doesn’t work.
2010 will be a little better than prior years. Because - unless the tax laws change - you'll be able to convert even if you have a reasonably high income - and you can spread the tax bill over 2 years. Still - the conversion isn't likely to make sense tax-wise. So we are facing some pretty big required minimum distributions about 9 years down the road. My best thinking at this point is the possibility of taking pre-tax IRA money and turning it into some kind of out-of-IRA annuity (charitable or otherwise). Where the first 13 years or so will be mostly a return of principal - as opposed to income. But this is a very fuzzy thought at this point - because my husband and I may both be dead by then. And who knows what the tax laws will look like? I have no intention of turning over control of any of our money to a third party to save taxes possibly owed almost a decade down the road. BTW - what kind of insurance were you thinking about? Don't need life insurance - long term care insurane - anything like that. But if you can sell me some windstorm coverage from a company that has a higher liquid net worth than I do after State Farm leaves Florida - give me a call. As for cars. You know - I would like to like cars. I've been looking for a new car for 2 years now (I drive a 1999 Lexus - bought new) - and can't find one I like. Even went to the Paris auto show last October when we were in Paris to see what was new. The Lexus 460 drives like a Buick IMO (and you can't fit 2 golf bags in the trunks of the smaller models without a hassle). I liked several of the BMWs in terms of "road feel" - but the interiors were kind of spartan considering what the cars cost. All the "mid-life crisis" guys here drive Porsches - but I don't know how to use a manual transmission - and am too short to deal with the clutch pedal even if I did know how to use it. Plus - there's the golf bag problem. Any suggestions? BTW - I agree that people who are so inclined should explore starting their own businesses. Both my husband and I had our own law firms a reasonably short period of time after we got out of law school. Worked out well financially. OTOH - being a small business owner is a big PITA unless you like to deal with employees - payroll taxes - the people who keep all your equipment running - the landlord - clients - etc. - etc. By the time I quit - I was spending maybe 1/3 of my time practicing law - and the rest on administrative stuff (which I hated). RobynOnly a lawyer would come on a down and out chatboard titled “Anyone here having to consider bankruptcy?” and talk about how bummed they are going to be in 9 years when the RMD’s kick in because they’re so brilliant and wealthy. You’re in your 60’s and have no kids. You should probably be much wealthier than you actually are. None the less…shouldn’t you be in the clubhouse sipping mojitos and talking about your handicap or something else completely irrelevant.
Slipping triptronic and sipping mojitos. Good call, Fawn. Everything I ever did in this business was mostly about enjoying my children, and financing them.
Yup - I guess I could have worked longer - and had more money and a couple of stents by now. Mea culpa. As for down and out - we (husband and I) employ people who are in much more dire straits than the OP here - many of whom have worked for us for years. The people who clean our house - do our landscaping - handle household repairs - etc. The guy who does our household repairs was in construction - steady job - and did repairs on weekends - until there were no more construction jobs left - and now all he has left is repairs (luckily - his wife is an office manager at a medical office with a steady source of income and medical insurance). My BIL in Michigan used to sell chemicals to the auto industry. Earning low six figures. Job gone. He is now doing household repairs too (luckily - he wife also has a steady job with medical insurance). Typical stories for a lot of workers these days - including those who work for us. And not a single one is talking bankruptcy. Because they all lived well within their means for years with minor indulgences - whether it was a Harley - or some hunting trips in deer season. I cannot imagine telling them about OP's story. They would probably say he's getting what he deserves. We have our own personal WPA going now. Things that we might have put off until next year - we do now. And we keep thinking up new projects. Also - we spend a lot of time helping the people who help us to sort things out when they have problems. Am I as rich as I could have been? No. Am I as good as I can be? No. But I like to think that I am an ok person. Do you have contact with blue collar workers or similar these days? What have you been seeing? Robyn (too old for mojitos)Only a lawyer would come on a down and out chatboard titled “Anyone here having to consider bankruptcy?” and talk about how bummed they are going to be in 9 years when the RMD’s kick in because they’re so brilliant and wealthy. You’re in your 60’s and have no kids. You should probably be much wealthier than you actually are. None the less…shouldn’t you be in the clubhouse sipping mojitos and talking about your handicap or something else completely irrelevant.
Okay, “Robyn”, thanks for all the patronizing details of your “life”, now maybe consider getting some contact with blue collar workers or similar these days.
[quote=RobynG]
Still - the conversion isn’t likely to make sense tax-wise. [/quote]Are you operating under the presumption that your marginal tax rates will remain the same?
Have you considered the impact of estate taxes? Your desired legacy?
Consider the fact that most assets right now - other than treasuries and cash - are valued quite a bit lower than they were only a few quarters ago, and that as hysteria subsides valuations might trend towards 'normal'.
These are all issues that you and your CPA might want to ponder as you review your spreadsheets.
Food for thought.
Those RMD's can be a biotch.
Robyn-I do think you’ve confused me with someone else.
Now back to our regularly scheduled thread diversion.I have a client like robyn g. They like to have large account with wirehouses to have an ego but never appreciates what u do for them. When their account moves up n value it’s the market but blames u for any losses. They ll try to squeeze out every penny out of the bond credit but never says thank u for any discounts. They also think that they have more knowledge in investments but realistically have less than those fa who just passes series 7
Oh, you think she might be cheap? :). SK, one of the great honors of being a humble servant to our clients is we get their stories. Do ya think Robyn really just wants a life? I see your client. Maybe she just wants to mingle with the masses, before Uncle Sam takes milks that RMD. If I was her, I might go out and buy the compleat works of Led Zepplin while I was still breathing.
[quote=iceco1d][quote=RobynG]
. All the "mid-life crisis" guys here drive Porsches - but I don't know how to use a manual transmission - and am too short to deal with the clutch pedal even if I did know how to use it. [/quote] Simple. Tiptronic.[/quote] Interesting: http://en.wikipedia.org/wiki/Tiptronic Thanks - never heard of it before. RobynI don't generalize about FAs - and you shouldn't generalize about clients. I have about as much ego involved in picking and staying with an FA (or a financial services firm) as I do when picking and staying with a health care provider. I am looking for a good degree of knowledge - competent service - and reasonable pricing - in both (e.g., I will never again go to a health care provider where 75% of the clients are un/under-insured and my bills are twice what the Mayo Clinic charges). Not that my accounts demand much service (there's not much "turnover"). As for not appreciating things - speak for your own clients - not me. E.g., I've sent flowers to one of my FAs (a woman) as a "thank you" for some great help with something. Other gifts for some OTT service. I freely admit I have expertise in only one area - fixed income. And I know more than the average FA (I don't necessarily know what you make on things - but I do know what I pay - which is all that matters to me). And I have both the time and inclination to do research when necessary. Let me give you a "for example". I assume at least some of you have clients with muni bonds in insurance wrappers where the wrappers are now next to worthless (or worthless). Have any of you personally undertaken an analysis of the underlying credit quality of those bonds in the last year (I always used to look at underlying credit quality of insured munis when I bought them - but never looked again until last year) - something that goes behind the bond ratings? Admittedly - after doing a lot of work (helped in some cases by an FA who dug up ancient prospectuses) - I wound up identifying some bonds that I couldn't figure out in terms of sell/hold. But I did the best I could short of attending water utility board meetings. If any issues go belly up - I will not blame anyone. Because no one could have foreseen what is happening today 5 years ago. Do you do any independent credit analysis on companies which issue annuities? I don't own annuities - but my father owns some immediate fixed income annuities. Some from AIG and other "fallen stars". In his case - it doesn't make much of a difference now - because the cash value of those annuities is almost zilch (he is 91 and bought the annuities quite a while back). But it would make a big difference in terms of a client investing today. Have you ever done TA on any NYSE listed corporates your clients own (you can actually get the price data on listed bonds and chart them)? To figure out whether to buy/sell/hold? Note that I wouldn't blame you for not doing this kind of work (you probably have lots of clients with tons of different investments). And you probably have bigger fish to fry these days - the clients who are at their wit's end due to losses in portfolio value - reduced dividends - etc. (one reason I haven't spoken to either of my FA's at full service firms more than a few times in the last year - they're frazzled). But don't assume something about a person without knowing that person. And you know - if you hate a client - you can fire a client. At some point in my law practice - I figured the 20% of my clients that I hated took more than 20% of my time and were responsible for less than 20% of the business gross. They weren't worth it - so I "fired" all of them. Clients can fire professionals - and professionals can fire clients. Life is too short to deal with people you don't like - for whatever reason. Robyn P.S. A lot of you guys (and women) seem to be really tense and defensive. Which I can understand these days. It's a ridiculously difficult period in terms of investing. Just don't use me as a pinata because I happen to be here.I have a client like robyn g. They like to have large account with wirehouses to have an ego but never appreciates what u do for them. When their account moves up n value it’s the market but blames u for any losses. They ll try to squeeze out every penny out of the bond credit but never says thank u for any discounts. They also think that they have more knowledge in investments but realistically have less than those fa who just passes series 7
Robyn,
Your father's "immediate fixed income annuity" would not have ALMOST zilch in cash value. It would BE zilch. It has been zilch since the day he annuitized it. That is one of the main features (not necessarily benefits) of an immediate annuity. Lifetime income (or some various form of it) and no current cash value.This is a business about building trusts and relationships. Most of the folks here have learned a lot about reading people, and many might question your "cred" based on some of the things you have said. Even newby door knockers get more "instant cred" than the hit I get from you. You don't demonstrate much people knowlege, I give you a "pass" on your exposure to personal finance concepts.