A weekly thread to discuss financial matters - from personal all the way up to global.
Ground Rules
- Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
- Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
- Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
- Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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Notes -
Target date funds get a lot of attention in retirement planning, but many financial planners suggest that the recent underperformance of bonds relative to equities make their glide paths too conservative.
What is your opinion on that kind of one stop shop for retirement?
Ignoring the fact that many corporate plans only offer a TDF, they seem like they're great for the average saver who might otherwise choose to do nothing. I've split the difference and contribute to one in my 401(k), but selected a date farther into the future than the one that most closely matches my retirement date.
Like most financial products aimed at retail my quick thought would be they suck and you can do something better easily if you know what you’re doing. They are designed to be sold at scale but with higher fees. It’s for middle class people completely confused with financial markets. Almost everyone here can learn enough about finance to create a better product for themselves. Someone here said they wish they had these with fewer bonds. Honestly I kind of like bonds here, but a better solution that’s not active management for people here is to just do the spy, vti, and Tlt game at lower fees and customize your own ratios.
A financial advisor managing a 45 year old nurse with 300k liquid doesn’t have the time to do everything bespoke and just needs a good-enough product which is far superior than a bank savings account and worse than do it yourself.
That's what I've wound up doing, even though I've been fortunate enough at my past two companies that the ERs for the TDFs were pretty dang low. Not quite as good where I am now, but at my previous company I think the TDF ERs were 0.035% (but at that company the S&P 500 index was 0.006% and their bond index was 0.01%, so... although at that level it's pretty close to just splitting hairs)
Yes. I somewhat hate the good/bad financial product distinction. There’s some stuff that probably is dogshit like Grant Cardonas product, but if some broker needs to hand-hold someone to invent in spy and basic stuff he deserves to get paid. And that client is still better off.
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