If you invest $1.00 at 5% and let it run for 50 years, it would have grown to $11.00+, without allowing for the erosion of your income, whether annually or after a period of years, several times, by income tax, or the ongoing erosion in value of your asset by inflation. If, however, you could invest it at 10%, after that same 50 year period it would have grown to $117.00+. Your investment could lose 3/4 of its value and still come out ahead of having invested it at 5%. Actually, more than that - for it's the value after taxes and inflation that really counts. Do you expect that companies like Exxon, Gillette, Coca Cola, and such, or other major petroleum, pipeline companies, etc. may go out of business? Or even suffer serious losses. A person who invests a major portion of his (probably less likely "her", cause women generally are more risk-averse and less likely to plunge; [some would say, "smarter"]) total invested asset into highly speculative issues seems to me to have cheese for brains. The stock markets as a whole have average growth of 7 - 8% or so, over the long term. Few mutual fund managers' holdings have grown faster. And they charge fees for their expertise - somewhere between 1 - 2% in the U.S. for equity (i.e. stock market based) funds, most of them over 2% annually in Canada. If they match the long-term average growth of the market ... they're reaping about a fifth to a quarter of the growth, a larger proportion in Canada. Unfortunately, if there is no growth - they still get their percentage. Many persons calling themselves financial planners/advisors are actually mutual fund sales people: that's all the equity-related financial issues that they're licensed to sell. They don't want to talk to you about individual stocks, for they can't sell them and it's illegal for them to recommend them unless they've taken the courses that stockbrokers take (which few have - their courses are much less complex). There are a few who sell no financial products, but many of them stop doing that because often their income levels are much lower, despite many people who want to invest saying that they'd really love independent advice. One should investigate what kind of training a prospective personal financial advisor has taken and whether s/he has advanced courses above the minimum requirements. Also what kind and length of experience the prospective advisor has. Also what lifestle experience the prospect has: some have seen a great deal more of life than others - and have learned much more per year than many who have lived as many years. Finally - you need a person whose personality and ideas are compatible with yours. You will trust that person with a very important part of your life. Some years ago, when I had a display at a county fall fair, someone asked me what right I had to call myself a financial planner. I said that we could get rid of unemployment tomorrow - we need only have every unemployed person put out a shingle on his front lawn calling himself a financial planner, as it was unregulated - any darn fool could do it. Stock brokers were regulated, as were mutual fund salespeople, but in our area at that time financial planners were not, as there were few of them operating outside of stockbrokerage and mutual fund sales agencies. That's not the case now - but it would be a good idea to ask several of them what kind of regulations there are governing them. I took the course that stockbrokers take, over 20 years ago and worked for a mutual fund sales brokerage (i.e. they could offer mutual funds managed by a large number of managers, rather than only funds managed by their own company). I didn't produce enough sales to suit them, so was there for only one year. I'm more tuned into the idea of helping people set their financial goals, look at some concepts that they might not have thought of, and work toward achieving them. I am totally devoted to helping my clients decide what they want to achieve and start out on a plan of how to achieve that/those goals. They don't have to be concerned that my advice or recommendations may be slanted toward various financial products that I just happen to sell, for I don't sell any. One local person that I met a few years ago said that he'd done well in business and managing his investments, so some friends asked him to manage some money for them. He asked for a minimum investment of $10,000., asked the client to sign a power of attorney for that account only, and when he made decisions about investments, a copy of the confirmation went to the client and one to him. He charged 10% of the growth (exclusive of dividends, if I remember correctly). Rather a good idea, for if he doesn't produce, he doesn't get paid. There is a fairly major proviso, though - that he might choose some fairly risky investments where there could well be a possibility of major gain. He being a person of integrity, I think that he was quite strongly guided by the level of risk that his clients were willing to tolerate. When I asked what happened if there were no gain - he said that there hadn't been a year yet that he hadn't been able to send a request for payment to every client. I'm not sure how many years the concept had been in operation. This has been rather off topic - sorry about that. As for many people lacking time to manage their investments ... ... many people spend more time on consideration of where they'll go for a two week vacation than they do on an investment system that may well be in place for forty years (or more). Good wishes for making your money work well for you - rather than better for someone else. joyful guy

I'm not sure that she's willing to listen to me much anymore. We had a fight a couple of days ago. She was laid off from her first "real" job about three months ago, and managed to find a new job within a few weeks, which is good. Now she's started saying to me that she's had a new job offer, and she asked me what I thought. I told her that being straight out of college, and holding a job for one year, then the next for only two months, and then jumping to another job is NOT going to look good on her resume, because future employers would think she was flaky. She said I was being way too stringent, and that she would surely hold this next job for several years, and that would prove she wasn't flaky. I was like, "How do you know that you'll hold this next job for several years? The company could go under. You could get laid off again. I think you need to stay where you are for at least a couple of years, and have a good solid employment record before you shift to another job." She has no good reason to switch to this other job; it's like someone shows her something shiny and her attention changes to that direction. Those of you suggesting ADD might be onto something. She felt that I had absolutely no idea what I was talking about when it comes to what future employers might look for when it comes to her employment history, and that they wouldn't care if she had jumped around from job to job. Never mind that I have several years more work experience than her, and have been on hiring committees at major universities; I guess I know nothing. The argument then basically shifted into her saying that she knew that I thought she was a f*** up, and that I disapproved of her life choices, etc. Not totally untrue, I'm afraid. At this point, I'm not sure where the friendship is. I have a hard time being friends with someone that I can't even really respect, I guess. I've come to realize that I'm sick of being her keeper, and that's really about all our relationship ever was...

Hi Socks 1234 ... what was that other number, again, please? Many advisors suggest that as people get older, they should carry a smaller percentage of their assets in equities, where the values fluctuate substantially and concentrate more on investing where their principal is more secure, e.g. bonds, GICs. Trouble is - when you invest where your principal is guaranteed, there are two rats that eat your cheese. There's an entity that favours you with a question, each year ... and a statement. Regarding your annual income, ... "How much did you earn, last year?", and "We want part of it", ... ... are the messages that most of us get from the income tax people. And, if you invest your dollars where you want that touted guarantee that the number of invested dollars isn't going to shrink over the interim ... ... there's another guarantee that the folks who want to use your money (read "banks" or "bond issuers") never seem to mention ... ... the number of dollars of "principal" is "guaranteed" not to grow, either. So - since we've had to cope with inflation every year since the Great Depression of the 1930s, you need to take some of those dollars that they earned to put with the principal in order to preserve your purchasing power since the inflation rat nibbles off a corner of each of those "guaranteed" "principal" dollars every year. Know what? The rats eat first! You get what's left. Which in recent years has been very little ... if anything. I favour people, especially seniors, learning more about how money works, with a view to carrying a larger component of equity-based investments, where justified. I took the course that stockbrokers take (much more complex than the mutual fund guys need) and 6 courses leading to Chartered Financial Planner (passed only 5). Course revamped aiming at slightly different designation, Certified Financial Planner, I'd have needed to have started all over - at age 70 or so? I don't think so! I sold mutual funds (for a broker, so could offer a wider choice) for a short while, and for years have worked as a personal financial advisor, selling no products - no conflict of interest. Also, very few mutual fund managers justify their vaunted claim of more skillful money management, for they don't outperform the market averages. But in the U.S. they like to collect about a fifth or sixth of the average growth rate that the market produces, and in Canada about a fifth to a quarter of it. If individuals can develop the skills necessary, and the nerve to avoid getting upset if the market goes down some (i.e. sleep soundly at night at the time of a sliding market), they can usually produce a better result, long term, using a larger component of equities, I think. Maybe you noted a thread that I wrote here a few days ago asking that folks compare stock certificates (of one company) and rabbits for proliferation. I've written a number of threads on "Money Saving Tips", "Household Finance" and "Retirement" which will give you quite a bit of information about my approach to effective management of income and assets. If you have further questions, I'll be pleased to answer them. Good wishes to you and yours. ole joyful

Do you think it wise to plan an income to carry you to age 100? It's better to run out of days before one ruins out of dollars than the other way 'round, I've heard. I figure that at 65, I may well have 35 years of life ahead ...which is seven 5-year blocks. If I use up all of the first five-year block during the first five years, it isn't there to work for me any more, so other blocks will have to carry the full load ... but then I'll be eating up the second block, and after ten years it won't be available to work for me any more, either. So it seems to me that I'd better make that first block of funds (i.e. "asset" - not "funds" as in "mutual funds")(1) last for a full ten years, to reduce the possibility of my having eaten through all of them before I hit 100 ... and now some are saying that we should plan to fund to 110, even 120. As I plan to still have 85% of my current asset still around in 10 years, and probably half of it still here in 20 years, it might be wise for me to keep in mind that, since about 1870, there hasn't been a 20 year period in which the entire stock market went down. Dad, as a farmer who of necessity had to make long-term financial plans, used to say that some people couldn't see beyond the end of their own nose. In recent years, we've become more prone to think only of today/the short term. Good wishes to you as you proceed with your plans. Learning how money works (and taxes) is an interesting hobby - and it pays well! ole joyful ... who, at 80+, lives frugally, by choice rather than necessity ... so the assets/investments are, so far, more or less "play money" 1. I haven't bought a mutual fund in 25 years, and not about to. They make great noises about the superior skills of their managers ... but if they're so smart, how come about 85 - 90% of the time they don't do as well as the segment of the market in which they operate? Most of your (i. e. U.S.) managers charge 1.5% or more management fee annually (ours [Canadian] charge 2.5% or more), guaranteed, whether they make any growth or not ... and the only skin that they have in the game is if we get so mad at them that we move our money elsewhere. Nobody cares as much about your money as you ... except possibly someone who may have a strong desire to move some of it from your pocket into his/hers. o j