Native Floridian
Bronze Member
- Mar 12, 2012
- 1,211
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- Excal, Sov GT
- Primary Interest:
- Beach & Shallow Water Hunting
Just an example of how making a mistake can hurt.
A guys calls me to meet to talk about his 401k. he is retiring and has just over $600k in the 401k. he wants to roll it to an IRA once he retires. We go through the entire process of meeting and discussing. I come up with a plan that satisfies all his needs and will meet his goals.
Throughout the process his wife has been very quiet. I can see she is not on board. Throughout the process i try to engage her but she is closed off. When decision time comes the wife finally speaks. The costs are too high! She makes a new revelation that she belongs to an investment club and that she wants to run my plan by them. I know i'm dead in the water, just wasted the better part of 10 hours.
Sure enough the investment club shoots down my plan. The wife makes sure she twists the knife by telling me the president of the club laughed at the plan. OK, not gonna close this one!!! I move on.
Fast forward about 14 to 18 months, the hubby calls me and asks if he can meet with me. I reluctantly agree. We meet. i am horrified to learn that the $600,000 401k is now an IRA worth just over $450,000. This in an up market. Turns out the Investment club prez made a few wrong calls and cost this guy $150,000. The guy is depressed and dejected. A beaten man. He is rightfully worried about his future. he asks if we can still do the plan. i tell him yes. i give him several fee options. I show him where would have been had he gone with the plan from the outset. he got upset. Not at me, but himself. The plan was up from the original investment point. Not a ton, as memory serves, but enough. Still, none of this works for the wife who again says no. Apparently, Jeff Foxworthy has it right, there's no fixin stupid!
I reason with the guy. My fee to do the original plan was $6000 and you balked. Doing it yourself cost you $150,000. I asked which is less $6000 or $150,000? Do you have another $150,000 to risk?
This is an example of the wrongheadedness of putting fees before expertise. Admittedly it is an extreme example. However, it shows clearly, that costs are only one part of the puzzle.
A guys calls me to meet to talk about his 401k. he is retiring and has just over $600k in the 401k. he wants to roll it to an IRA once he retires. We go through the entire process of meeting and discussing. I come up with a plan that satisfies all his needs and will meet his goals.
Throughout the process his wife has been very quiet. I can see she is not on board. Throughout the process i try to engage her but she is closed off. When decision time comes the wife finally speaks. The costs are too high! She makes a new revelation that she belongs to an investment club and that she wants to run my plan by them. I know i'm dead in the water, just wasted the better part of 10 hours.
Sure enough the investment club shoots down my plan. The wife makes sure she twists the knife by telling me the president of the club laughed at the plan. OK, not gonna close this one!!! I move on.
Fast forward about 14 to 18 months, the hubby calls me and asks if he can meet with me. I reluctantly agree. We meet. i am horrified to learn that the $600,000 401k is now an IRA worth just over $450,000. This in an up market. Turns out the Investment club prez made a few wrong calls and cost this guy $150,000. The guy is depressed and dejected. A beaten man. He is rightfully worried about his future. he asks if we can still do the plan. i tell him yes. i give him several fee options. I show him where would have been had he gone with the plan from the outset. he got upset. Not at me, but himself. The plan was up from the original investment point. Not a ton, as memory serves, but enough. Still, none of this works for the wife who again says no. Apparently, Jeff Foxworthy has it right, there's no fixin stupid!
I reason with the guy. My fee to do the original plan was $6000 and you balked. Doing it yourself cost you $150,000. I asked which is less $6000 or $150,000? Do you have another $150,000 to risk?
This is an example of the wrongheadedness of putting fees before expertise. Admittedly it is an extreme example. However, it shows clearly, that costs are only one part of the puzzle.
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