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For anyone with the urge to manage friends' and families' investments ...
Neither wife nor offspring look at their portfolios, I don't charge anything to do standard stuff for them. So it's going ok.
I spent some time trying to figure out their risk tolerance and investment druthers. I do have long talks with them from time to time to let them know how things are going with their choices. Unlike my own portfolios, I try to structure them so that things won't look like a dog's breakfast if I'm not around.
I certainly wouldn't get involved with friends. Although, I did have to keep my thoughts to myself when a few of them would talk about all the great trips they were taking on their home equity.
all the great trips they were taking on their home equity. OMG!
Ya, since 2010 I've babysat a colleague's portfolio. Pretty plain vanilla, all $$$ at TRP, still. I moved my own to uncle Chucky. He and many others were getting shafted by another colleague they thought they could trust. His real profession is working as a broker. He is a very part-time ordained Minister. Still makes little sense to yours truly. Maybe the others are STILL getting shafted! The SOB had them in front-load funds. These are all retirement accounts. Jaypers Crud.... My friend is still pleased, and I'm still willing.
Never get involved with other people’s kids or their money. It is a thankless exercise. I think school teachers are brave.
At the same time know that no one takes care of your kids or your money like you would. So, if you trust these to other people, you have no right to complain about the outcomes.
Never get involved with other people’s kids or their money. It is a thankless exercise. I think school teachers are brave.
At the same time know that no one takes care of your kids or your money like you would. So, if you trust these to other people, you have no right to complain about the outcomes.
having consolidated and managed all immediate family assets (at vanguard) starting ~3 decades ago, it has been a interesting and productive experience in risk and asset allocation. winners and losers for any particular holder has gotten lost in the wash, and is briefly noticed only during tax submission. but one definitely needs a certain level of trust and cooperation.
I don't have any "urge to manage friends and families investments"! I have a hard enough time just managing the investments for me and my wife. I will encourage families and friends to do as much self-education as possible, and then decide for themselves if they need help from a professional Financial Advisor, or if they want to do it themselves. On these Financial Forums, I try very hard to avoid offering advice to others, but am willing to tell others what I am doing with my own personal investments. I view these forums as opportunities for posters/investors to learn from each other, but ultimately each poster/investor has to decide on what is best for themselves.
My parents have an advisor who is about to retire. he said he'll take care of them for as long as he's alive (my father is clergy and helped him through some losses) so thats nice but he's 5 years older than my parents!
I know what they are invested in and nothing is too out of bounds. I'd do it differently in all likelihood but nonetheless I don't want the hassle.
My dad wants me involved in all the meetings which is fine. I assume advisors roll their eyes at the idea of a novice stickign their nose in.
That said, I know one of the guys at his firm and he knows I know my stuff and has tried to get me to turn to a life of financial advice (blech) so its fine.
He asked me one day if I had any ideas I'd like to discuss. I was like I know you agreed to handle this for my parents and I appreciate that, but would it be better to move these 8 funds into a singular balanced fund that spits out a distribution that they can w/d or not w/d for their expenses? It seems like it woudl be easier for everyone involved. He's like thats a great idea but I'm not dead yet lets look at that later on.
I manage my fathers stock account (largely vtsax and john deere) that we use for charitable giving.
I've gratuitously managed the ports of a lot of friends and relatives over the past ~40 years. I do it because they need the help and I can provide it. My goal is usually, depending on their age and my relationship to them, to educate them on the basics and someday have them feel confident enough to do it themselves.
But I don't do it for everyone who asks me for help. I am very selective in choosing whose port I'll manage. And I vary the scope of my work based on a bunch of factors too varied to detail here.
It definitely ain't all thankless and never have I gotten myself into an arrangement that came back to bite me. And regularly the friends and relatives throw things my way despite my insistence that they don't need to give me anything.
We've received some pretty incredible "Thank Yous'' that have taken us to places and events that we may have never been. And we've eaten a lot of great food at restaurants that we'd have never otherwise seen the insides of! And the home cooked meals are many times to die for!
The most financially rewarding situation (despite me not being in it for that) came after a very wealthy relative was told by a national tax service that she owed a combined ~$60K in FIT/SIT in a year she sold her home. Well, one relative smelled something amiss, and word quickly got out in the family that I should take a look at that before the relative signs the return and has it filed by the firm.
Yeah, huge error by the firm in their calculation of adjusted basis of the property. Relative actually only owed ~$5K, not ~$60K, in combined FIT/SIT. I worked with the national firm who admitted their mistake and they correctly filed the respective returns based on my corrections. The relative was beyond elated and thought (despite my urging to the contrary) that I should get a healthy chunk of the savings of would be taxes. I tried to stop her but could only contain her gratitude! (I was asked if I would be upset if she sent me a check for $X. I responded that I don't upset easily!)
Far beyond all that though has been the incredible boost this part of my relationships has added to our overall relationships. It works that way because I establish a framework that I will only work within and there are clearly expressed ground rules. At the first notion of problems, the portfolio mgmt part of our relationship is terminated. In all the years of doing this, that only happened once. It was no big deal and there were no ill effects to our overall relationship.
The other incredible by product of doing this is what I learn about risk, specific investments and varying investment strategies that I would have otherwise not likely learned had I not engaged in these activities. Over the years I found three funds that I might not have otherwise found via reviews of 401k and 403b options. I invested in all three and two of them have been cornerstone funds of ours for a long time now.
Yeah, I agree. Doing this ain't for everybody and many that do will suffer consequences that they could have avoided by just staying out of these relationships. But I'd caution taking advice from posters on internet forums who have never once engaged in this, or maybe had a bad experience, or heard about a cousin of a friend's uncle who did.
at my last gig, one of the younger people in my dept asked me if i went to the 401k meeting and if i understood anything that the guy said in the whole hour. I told them I didn't and gave them that simple "if you can" pdf thats out there by bill bernstein.
I told them that at this stage, if you were my kid I'd just pile as much money as I possibly could into VTSAX (it was a mediocre 401k through nationwide with otherwise poor choices outside of total market, total intl market). Well she told one of the other people and then another person, the next thing you know all the younger people are telling the other younger people to just buy VTSAX. I kind of expected to get into trouble but never did.
i attended the next 401k meeting just to get an idea of what they were talking about and it was completely ridiculous and largely geared towards getting the investor to converse with the advisor about their Cadillac service.
I thought I knew a lot about investing until opening a brokerage account at Fido 4-5 years ago. Much wider landscape to work with than just having investments at a few different houses. So am still learning. But I do know my 2022 (bear market) return was better by 2 or 3 points then it would have been if stuck in the previous fund houses. From my (broad) family experience of 70+ years the real issue is convincing someone to save during their working years, Without having something to invest, all the coaching in the world can’t help you in retirement.
I’ll vote for better financial education: ”Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.”
Great discussion. Thanks @stillers for the lengthy comment.
Comments
I already manage “one too many” - that being my own.
I spent some time trying to figure out their risk tolerance and investment druthers. I do have long talks with them from time to time to let them know how things are going with their choices. Unlike my own portfolios, I try to structure them so that things won't look like a dog's breakfast if I'm not around.
I certainly wouldn't get involved with friends. Although, I did have to keep my thoughts to myself when a few of them would talk about all the great trips they were taking on their home equity.
OMG!
Ya, since 2010 I've babysat a colleague's portfolio. Pretty plain vanilla, all $$$ at TRP, still. I moved my own to uncle Chucky. He and many others were getting shafted by another colleague they thought they could trust. His real profession is working as a broker. He is a very part-time ordained Minister. Still makes little sense to yours truly. Maybe the others are STILL getting shafted! The SOB had them in front-load funds. These are all retirement accounts. Jaypers Crud.... My friend is still pleased, and I'm still willing.
At the same time know that no one takes care of your kids or your money like you would. So, if you trust these to other people, you have no right to complain about the outcomes.
having consolidated and managed all immediate family assets (at vanguard) starting ~3 decades ago, it has been a interesting and productive experience in risk and asset allocation. winners and losers for any particular holder has gotten lost in the wash, and is briefly noticed only during tax submission.
but one definitely needs a certain level of trust and cooperation.
I know what they are invested in and nothing is too out of bounds. I'd do it differently in all likelihood but nonetheless I don't want the hassle.
My dad wants me involved in all the meetings which is fine. I assume advisors roll their eyes at the idea of a novice stickign their nose in.
That said, I know one of the guys at his firm and he knows I know my stuff and has tried to get me to turn to a life of financial advice (blech) so its fine.
He asked me one day if I had any ideas I'd like to discuss. I was like I know you agreed to handle this for my parents and I appreciate that, but would it be better to move these 8 funds into a singular balanced fund that spits out a distribution that they can w/d or not w/d for their expenses? It seems like it woudl be easier for everyone involved. He's like thats a great idea but I'm not dead yet lets look at that later on.
I manage my fathers stock account (largely vtsax and john deere) that we use for charitable giving.
But I don't do it for everyone who asks me for help. I am very selective in choosing whose port I'll manage. And I vary the scope of my work based on a bunch of factors too varied to detail here.
It definitely ain't all thankless and never have I gotten myself into an arrangement that came back to bite me. And regularly the friends and relatives throw things my way despite my insistence that they don't need to give me anything.
We've received some pretty incredible "Thank Yous'' that have taken us to places and events that we may have never been. And we've eaten a lot of great food at restaurants that we'd have never otherwise seen the insides of! And the home cooked meals are many times to die for!
The most financially rewarding situation (despite me not being in it for that) came after a very wealthy relative was told by a national tax service that she owed a combined ~$60K in FIT/SIT in a year she sold her home. Well, one relative smelled something amiss, and word quickly got out in the family that I should take a look at that before the relative signs the return and has it filed by the firm.
Yeah, huge error by the firm in their calculation of adjusted basis of the property. Relative actually only owed ~$5K, not ~$60K, in combined FIT/SIT. I worked with the national firm who admitted their mistake and they correctly filed the respective returns based on my corrections. The relative was beyond elated and thought (despite my urging to the contrary) that I should get a healthy chunk of the savings of would be taxes. I tried to stop her but could only contain her gratitude! (I was asked if I would be upset if she sent me a check for $X. I responded that I don't upset easily!)
Far beyond all that though has been the incredible boost this part of my relationships has added to our overall relationships. It works that way because I establish a framework that I will only work within and there are clearly expressed ground rules. At the first notion of problems, the portfolio mgmt part of our relationship is terminated. In all the years of doing this, that only happened once. It was no big deal and there were no ill effects to our overall relationship.
The other incredible by product of doing this is what I learn about risk, specific investments and varying investment strategies that I would have otherwise not likely learned had I not engaged in these activities. Over the years I found three funds that I might not have otherwise found via reviews of 401k and 403b options. I invested in all three and two of them have been cornerstone funds of ours for a long time now.
Yeah, I agree. Doing this ain't for everybody and many that do will suffer consequences that they could have avoided by just staying out of these relationships. But I'd caution taking advice from posters on internet forums who have never once engaged in this, or maybe had a bad experience, or heard about a cousin of a friend's uncle who did.
I told them that at this stage, if you were my kid I'd just pile as much money as I possibly could into VTSAX (it was a mediocre 401k through nationwide with otherwise poor choices outside of total market, total intl market). Well she told one of the other people and then another person, the next thing you know all the younger people are telling the other younger people to just buy VTSAX. I kind of expected to get into trouble but never did.
i attended the next 401k meeting just to get an idea of what they were talking about and it was completely ridiculous and largely geared towards getting the investor to converse with the advisor about their Cadillac service.
I’ll vote for better financial education: ”Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.”
Great discussion. Thanks @stillers for the lengthy comment.