A very big Thank You for the tips on record keeping. I will try to start one tonight. 'Till now I've just noted Dr appts. on calendar. I wish she did eat just $20-25 a week. She eats everything in sight. I have to make DH's next day lunch before we eat dinner or there's nothing left. I've really gone through my freezer just trying to make it to the end of the month for my retirement check to get deposited so I can buy more groceries!! Once we catch up on all of the behind bills and pay off S-son's cell phone,sattelite, etc., (He put everything in her name) we will have a little extra to spend on her from her check. She was so spastic about the warrant for the heating oil bill that we took $$ out of our savings and paid it before court day. That will be the first thing to come out of her retirement check. S-son called yesterday to say he had finally gotten a job. I'm doing the happy dance now! Hope it lasts. This has really taken the wind out of his sails because his Dad made it plain that there was NO MONEY. He's had to figure out how to come up with his own party $$s. She is talking about selling her house to get out from under the payments. 2 possible issues with that. 1) With the economy I'm not sure we can get enough to pay off the loans. 2) That house was built by her Daddy and NOTHING has EVER been thrown away! I'm dreading trying to clean out the house and multiple sheds/buildings. All and all, things are settling down a little. Stress level has dropped a notch. All of you have been my life raft. Can't thank you enough. Oh yeah, DH's Mom (Aunt's sister) has called and gone by the house repeatedly to try and get anything she can sell out of it. She knew everything that was going on and has already been there and carted off everything of value she could fit into her car before we found out how bad off Aunt was. (Such a sleeze bag.) In case you are wondering where we have been- DH was in a horrific accident on the job early last year and almost died. We spent many days in intensive care, had a long hospital stay as well as return trips for emergencies that kept popping up, and a very long recovery at home where he was practically bed ridden wnth me giving him daily very strong antibiotic IVs thru Pic line straight to his heart. When we finally got him on his feet and able to go check on Aunt- all of the family vultures had done an awful lot of damage financially as well as helping themselves to antique quilts, dishes, etc. S-son doing the most damage in the $$ dept. Let's just say I'm so grateful to God that I had the upbringing that I had. Poor DH is a Saint to have turned out as well as he did to have come from that family. Thanks for letting me vent here. It soooo helps my stress level to get it out. Betty

Hi again, jbspook, When I worked as a personal financial advisor, I suggested to everyone that they needed to learn how to handle current income wisely, and assets for the long haul. Quite a few said that they didn't have any assets. I replied that one of the major issues in life is to turn some of one's income into long-term assets. Furthermore, you never know when some (even distant) relative may die and leave you with a nice nest egg. Best to have learned something of how to handle it - beforehand. Which would you rather find: -how to achieve about the same as current lifestyle for $1000. lower cost, or -$1,000. increase in pay? On the day that you received your first Dollar Bill - you went into business for yourself. You likely had, at first, one employee - with a face on it, named "One Dollar". Sometimes you were lucky and received a bundle of new employees, all in one package - probably when you were a kid the first one was named "Five Dollars" - had a face on it, too. Most business owners feel that it's very important to learn how to operate their business. (If they don't, quite often they're not in business long). Learning how to manage money effectively is a long-term enterprise, but not too difficult. You don't get High School graduation after a year of schooling - and you don't teach a kid Grade 10 stuff when s/he's in Grade 2. Some folks are afraid of such learning - too complicated. They figure that money management is so complicated that the very idea intimidates them. I say that when Mom brings home a loaf of bread from the store (or she or Dad makes it her/himself) they put only a few slices on the table at a time. If Junior, tired and famished from running around, tries to stuff one whole slice into his mouth at once, it doesn't work. But, taken a bite and a slice at a time, it doesn't take too long, even for an old fart like me, living alone, to get through a whole loaf. Learning how money works is similar. We in Canada have a non-slick mag www.canadianmoneysaver.ca that runs no ads, also carries no pics except plain ones of the writers - who, by the way, give contact info at the end of 2 - 3 page articles and welcome response from readers. The 36 pg., 11 issues per year @ CAD$19.95 magazine's sole loyalty is to the subscribers. A lot of good ideas there - some of them relevant for Canadians only, but quite a few of general application. If you go there, I'm not sure how much of their information you can access, as a non-subscriber. Take a look and see. Don't know if such a magazine available in the U.S. They asked what the subscribers wanted - first was seminars with the writers of the articles. They've offered them in several places annually: 8 speakers, 45 min, each, $20. ($30. for two). Second was an opportunity for subscribers in an area to get together - now available in 35 - 40 places in Canada. I've attended, with about 18 others, the monthly meetings in this city for several years. Cost, as meeting room (boardroom of major local shopping mall) is free - is nil. Just a bit of gas - and a nearby person and I often ride together. Check some money management based magazines in your library. You may find a couple to which you'd like to subscribe - or just read them in the library. In our library system, you can't check out earlier issues of magazines from main branch - but you can from most of the branches. There are a number of books in the library dealing with investments that you may find helpful. I've suggested that people write down names, phone, email of everyone they know, build information about them all. If you had such, and had heard friends talk of financial affairs - could call them to ask what their experience may have been. By the way - such a list should save you hundreds, more likely thousands, in your lifetime (unless you have one foot in the grave). When you need advice, a service, etc. - ask your computer to search. It'll find knowledge, skills, etc. that your friends have that you'd forgotten. Can you live on the income of the one who's not to be the stay-at-home-look-after-the-kid(s) parent? Now's the time to start getting used to that. You'll find a lot of advice about how to live as you'd like - but more frugally - on the "Money Saving Tips" forum here. Quite a few of the posters offer the possibility of contacting them personally and I'm sure that most of them would welcome your inquiries (likely feel flattered that you asked). As Dave said - one type of financial planner is compensated by commissions on the stuf that s/he sells. Commissions are often at different rates on various types of instruments that s/he sells - which may colour their recommendations. They may receive ongoing "trailing" commissions annually on some products, as well. Most of them are allowed to offer only a limited number of financial products - so their knowledge is most comprehensive on that type of goods. Further - they may not choose to recommend stuff to you that they must send you elsewhere to buy. You should interview a number of prospective planners before choosing one. Inquire comprehensively as to the range of goods that your prospective plannner can handle. Are they the kind that most interest you? You should inquire fully about what training your prospective planner has taken, and what ongoing training is undertaken. What financial experience has your financial advisor had - in terms of advising others? What kind of experience has s/he had with regard to the growth of his/her personal portfolio? For example, one local writer says that he does not recommend financial goods to clients that he does not invest in himself. As he says, "He eats his own cooking". I'd be substantially interested in what general life experience my planner had had, as well. Lastly - you'll be carrying on a long-term relationship, relating to issues that are close to the core of your being. You need to choose an advisor with whom you feel at ease - who is compatible with you. Which is better - saving $1,000. in ongoing expenses at minimal impact on lifestyle - or $1,000. increase in employment income? The increased income of $1,000. will be a lot less than that - after you've paid income tax ... but $1,000. cash in hand not spent on goods is after-tax money. Enough for now. Again - good wishes in your search for financial management skills and such a highly skilled planner. joyful guy

"As I've said in other postings, any advisor that won't give you the names of at least 3 long-time clients to call and talk to, isn't worth considering." The problems are 1) he cherry picks clients and 2) clients have no clue what they are paying or how they are really doing. They just know they 'like' they advisor and he 'seems' to be doing great. The people I have helped all thought initially that their advisor was their dear friend that was doing wonderful things with their money. They would have given glowing recommendations. I think EF Moody said it well: "And that's the same critical problem with referrals as well- and the reason that they are so effectively used in the business. Literally every salesperson is told/taught to get referrals to friends, neighbors, relatives, co-workers, Martians, whoever, since that is a great lead in. Unfortunately, the person getting the referral believes- or wants to believe- that the agent has already been critically and thoroughly analyzed and must be of the highest caliber and competency. Invariably they do NOTHING themselves to check out whether such knowledge or ability exists- and nothing was done before. Then this happens to the next person and the next, ad infinitum, as the referrals continue. It ends up that no one did any checking on anyone at all and then they later wonder how it all went wrong. They end up buying the wrong product at the wrong risk level at the wrong time- and certainly from the wrong person. They get little or ineffectual service, etc. Now referrals may work with physicians and certain other professionals (sometimes with CPA's or attorneys- but not all the time) since they at least have a degree and other background and training. Even here, people are finally recognizing there are problems. But referrals to agents who have essentially nil background (read further) is illogical. It is for these many reasons that I feel that referrals to brokers, insurance agents, financial planners, attorneys and most other entities is a waste of time unless a comprehensive review of the individual is commenced before any product is purchased or any fee paid. And such review is NOT calling the SEC/NASD or your State offices to see if any formal arbitrations or law suits have been instituted. Only an infinitesimal number of agents have ever been sued. That still says NOTHING about competency. You need to do a LOT more to assure yourself of some reasonable competency." "That seems to set you off in a very strident manner." Because I know what a scam these people are probably in for. Unless they find an honest, knowledgable, hourly fee-ONLY planner. I would totally love to see ignorant investors finding good, honest, low-cost advice. I could then turn my attentions to all my hobbies. The fact is, these people need advisors because they are ignorant and have no confidence. Salesmen will snap them up and manipulate them and hurt them. I see this over and over and over. "But any good CFP who has been in business for 10+ years should be able to show a track record of at least 6-8% after expenses." Should, but they don't. Numbers don't lie. "Yes, it is hard to track all expenses (whether you use an advisor or not), but a rough total can be managed by diligent clients and figuring out the ROI is easy after that." First, why should a client have to hunt down elusive fees? Shouldn't a financial ADVISOR (!!!!) be telling the clients all about the fees? This alone is very telling. And I can't even track down all the fees! Fund turnover is not in the prospectus let alone the expense ratio. Take a look at this: "Mercer Bullard, president, Fund Democracy and assistant professor of law at the University of Mississippi, added: "This study demonstrates conclusively what consumer groups have argued for years: fund expense ratios are misleading. Expense ratios exclude portfolio transaction costs that on average equal 43 percent of the total expense ratio. In some cases, hidden portfolio transaction costs are five or six times the total expense ratio. Congress should act promptly to ensure that America's investors are provided with full disclosure about funds' portfolio transaction costs." Even if you find the turnover, figuring out the cost from there is a bear. Can't you see what a problem this is? "People also need to consider that many CFPs offer their clients purchases at NAV and reduced management fees on funds." From the BCT study: "Do advisors help clients find funds that are lower cost (excluding distribution costs)? After analyzing several trillion dollars worth of transactions, the answer is no." "He changed all his clients over to a fee basis " Yes, the new and improved way to get big fees from clients. This is usually more expensive than loads for the client in the long run. Fee basis means he can get commissions (probably from 12b-1 fees) and a percent of the client's assets. That percent of assets gets subtracted from the client's investments year after year after year after year. Never to compound. And for what? "But I don't make the mistake of thinking that everyone enjoys doing this type of thing;" They don't have to. They can buy a target retirement date fund (very low expense ratio, no load, no percent of asset fee, no 12b-1 fee, index funds, automatically rebalanced) or have a salaried Vanguard planner do it (often at no cost) or hire a fee-ONLY planner by the hour to set up a simple portfolio. I am saving amazing amounts of money and spend less that 8 hours a year on my investments. Had I been better able to dig through the industry BS when I first started, I would have been able to set up a great portfolio in a weekend. "In the end, all we are doing here is trading opinions. " Hard numbers are not opinions. This is not an opinion: "the BCT study found that the raw returns of equally weighted mutual funds (net of all expenses) for 1996 to 2002 were 6.626% for the investors working on their own and were 2.924% for funds provided by advisors." I know that I'm passionate about this. It's because I have looked at enough evidence over the years to reach certainty. And, I have seen so many people that have lost years of retirement to fees they were never told about by their trusted financial ADVISOR. Maybe it's just my opinion, but I think that if someone pays for a service he should get a value from that service - not badly hurt. And the worst is that all those clients initially defended their broker like crazy. It was only after I took them out to Morningstar and showed them reality that they started realizing what was being done to them.

Djsaw, No one has talked about 'lifestyle and money'... Jkom put it in a very technical way. I am putting a bit of a human story behind it.... but saying the same thing. The fact that you are not working right now and living off the dividends is a big red flag for your future. You have kids and your living expenses will only grow not lessen. Unless there is enough money to meet all your future needs, ie college, mortgage, new car, travel etc, you need either a job that pays well enough or an investment strategy that will give you enough to live on without eroding the principle. There may or may not be enough money for that as is. (I have no idea from your post.) This is where you need to talk to someone that can really figure out what you want for yourself and your kids with the money that is there. Most people with a young family need about $5mil to $10mil nest egg to have an upper middle class lifestyle without needing to work for life AND risking the principle. "Not risking the principle" is a very important concept because you do not have the earning power to bring it back up if you lost it. (If your wage was a $1/2 mil to $1mil a year then no big deal but you are not there...) People like Donald Trump and Ted Turner can pull themselves out of near bankruptcy but most of us cannot recoup the lost principle. I have seen multigenrationally wealthy families have this happen to them due to risky investments. If I had your money, I would want to have certain things that money can buy; a house in a good school district, enrichment for my kids, good after school care for my kids if I was working, nice vacations etc. Notice I did not list designer handbags or fancy cars. One of the joys of having money is that you can have some opportunities that enable you to enjoy life more fully and perhaps get your kids a small head start with good education and opportunities that may help them in life. We are all driven by Darwinian instinct to put our kids ahead of someone else's kids. This does not mean materially owning more things. However, there are things money can buy you to achieve that. As an example, I have piano lessons for myself and music lessons for my kids that cost about 6 to 8K per year. I get a great deal of joy out of my music. I budget about 10K to 20K for travel every year because I want to see the world and I want my kids to see the world. These items add up to a significant amount of money and I could not do these things if my salary was 50K a year, a median salary for a family of 4 in the USA. For example, if there is $1 to 2 mil in you portfolio and you have 50K to 75K before taxes to live on, then that is not a 'great income' to have a nice life style. However, if you supplmented that by having $50k salary, then you may be able to do things that you thought not possible with either the income alone or just the earnings from the inheritance alone. This is why you talk to the financial advisor/planner to help you achieve your lifestyle goals, whatever they maybe.... You are extremely lucky. I wish you the best.