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Thread: Realistic rate of return

  1. #11
    Quote Originally Posted by hlh View Post
    You sound very inexperienced with investing, and long term financial planning. Jeft offers you excellent advice. Completely agree with talking to an Elder Care attorney, and very cautious long term planning with reputable companies like Vanguard. Good luck. Be smart.
    Well obviously I am, as I said very new. I plan obviously on using "professionals" what I need to decide is what options are the best to use. But to be helpful can you please elaborate on why I sound so inexperienced? Other then the fact I'm asking this question in the first place and that I directly stated I'am very new. As I said I've talked to two different banks, the largest investment brokerage in Canada and two smaller ones. All I can say in my defense is at least I'm not jumping into the first option I'm given like most people. And I'am smart enough to stay away from structured settlements which Will barely beat inflation if at all and the money is not actually mine so if anything happens to me it goes back into the insurance company.

    Vanguard works with ETFs does it not, i'm leaning more towards mutual funds, and a small pocket of money for blue chip equities
    Last edited by JamesMcM; 01-08-2016 at 04:33 PM.

  2. #12
    Quote Originally Posted by Rustyjames View Post
    James, I was referring to a CD.
    ah so basically a savings account, thous even hit 1%? Just curious I've obviously never looked into that as that's not where you want to leave a large sum of money that you want to build

  3. #13
    James,

    We all start out inexperienced. It's good that you are seeking advice. It's exciting to think about how options may change with a healthier financial picture. However, there are reasons lotto winners usually end up right back where they started. There are several potential pitfalls that you need to watch out for. Obviously, excessive spending will get you into trouble. "Friends/family" needing help will come out of the woodwork. "Investment opportunities" will tempt you in many areas. Medical expenses and cost of living will continue to increase.

    Bottom line, if you don't develop a solid plan, you will almost certainly get into trouble at some point. This holds true regardless of the size of the settlement. A financial planner is a peice of the puzzle but only a peice. I have my opinions on compensation of a financial planner, ETF's vs mutual funds, etc. but those are less important at this point.

    Start with an elder care attorney. It may make sense to place funds into a special needs trust. There are several aspects to this that the attorney will need to advise you on. Once you know your options, you can plan from there.

    A special needs trust is a very important piece. It allows you to utilize benefits without spending down the assets first. This may seem irrelevant when considering a sum of money that should cover everything. However, you will most likely be suprised by its impact years down the road.

    The trust will let you specify where you want funds to go after your death.

    These trusts have several tax considerations. So, your long term financial planning should incorporate them. This is another reason to start with the elder care attorney before the financial adviser.

    Best wishes!
    Last edited by jeft; 01-09-2016 at 01:41 AM.
    Jason

    C5/6 Complete - water skiing accident 1994.

  4. #14
    Senior Member pfcs49's Avatar
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    I have my money in a managed account and pay a fixed rate maintenance fee. There is no charge for the trading that takes place monthly in my account which is risk adverse although ~60% is in equities.
    Over the 15 years I've had it, it returns ~4% which is IMO considered a good return.

  5. #15
    Sorry guys but what is elder care attorney?

  6. #16
    Rusty,

    I said he could get 2% with a 5 year CD. Wish there was a CD paying 5% right now! That would be awesome.

  7. #17
    And, James, why not just educate yourself on the subject? Obviously tons of great books out there. When it comes down to it, investing is not rocket science. Choose your asset allocation between stocks and bonds and invest in low cost mutual funds. Vanguard is great. I don't see the sense in paying someone else a fortune to manage your money. That is, if you take the time to educate yourself. If you simply don't care to do that, you definitely should seek professional assistance.

  8. #18
    Quote Originally Posted by JamesMcM View Post
    Sorry guys but what is elder care attorney?
    It's an attorney or group of attorneys that specialize in the legal needs of the elderly and disabled. I'm NOT endorsing the group below. It's just a link based on a quick search. You would need to find someone near you.

    https://www.naela.org/Public/About_N...ds_Trusts.aspx
    Jason

    C5/6 Complete - water skiing accident 1994.

  9. #19
    Quote Originally Posted by tarantella View Post
    And, James, why not just educate yourself on the subject? Obviously tons of great books out there. When it comes down to it, investing is not rocket science. Choose your asset allocation between stocks and bonds and invest in low cost mutual funds. Vanguard is great. I don't see the sense in paying someone else a fortune to manage your money. That is, if you take the time to educate yourself. If you simply don't care to do that, you definitely should seek professional assistance.
    I would agree in many situations. However, I would not if you utilize a special needs trust. This structure helps from a benefits standpoint. You can greatly reduce the rate at which you burn through assets. The trade-off is that you introduce a couple of additional complexities.

    You have to have a trustee. This can be your CPA. Regardless, you cannot simply set up an account to manage the funds.

    Tax planning is very important. In the US, capital gains after very few deductions is around 50%. The exception is municipal bonds in your home state. I have no idea how this may or may not apply in other countries.
    Jason

    C5/6 Complete - water skiing accident 1994.

  10. #20
    Quote Originally Posted by tarantella View Post
    Rusty,

    I said he could get 2% with a 5 year CD. Wish there was a CD paying 5% right now! That would be awesome.
    Sorry, and I too wish they were 5%!

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