When Kathy and I attended the Charles Schwab retirement seminar, one of the things they said was simplify and unify. I will confess that I have taken the opposite tact. I felt that you should not have all your eggs in one basket. eTrade is cool because they have 2 factor authentication, but eTrade, by some accounts is financially stressed. What if they fail? You certainly would not want to exceed the SEC coverage.
Yet complexity means you are not watching all those baskets closely. These days, the risk of someone hacking your account is probably far greater than the risk of that investment bank becoming insolvent. My friend Rudy, tells me there is a Chinese proverb to put all your eggs in a basket, and watch that basket closely. Hmmm.
Right, wrong or indifferent, we are in a time of transition. I have swigged the simplify and unify Kool-aid. One by one, I am closing the strategies and moving the assets to Vanguard. They are being invested in low-overhead, huge ETFs and Mutual Funds. They will never get the kinds of returns that I got when I was actively investing with strategies, but I do not have to think about this stuff. Kind of a win.
So where is the attitude problem? In addition to Vanguard, we have one of those classic financial advisor accounts. Lest I sound like I am a gazillionaire let me put this in perspective. We started the relationship back when Kathy was a public school teacher making something like 12k/yr. The advisor's kids went to the school, they had some special needs, (both turned out great by the way), and he offered to help the teachers invest for retirement without taking his fee.
So where is the attitude problem? Well a lot of water has passed under the dam at this point and we actually have a nest egg that matters. Since my health was failing we have chosen to invest in a portfolio that would allow us to receive money monthly including two annuities.
NOTE: annuities are complex and dangerous. However, they fall into the category of reliable payments. When you retire, you lump your assets into two groups. Reliable payments are things like social security, retirement plans, 401k, IRA, high quality bonds and annuities. The other group is ephemeral, stocks go up, (up being the key point), and down and cannot be relied on for monthly distributions, (let's skip the dividend debate for now).
So where is the attitude problem? Ah. We had our quarterly call yesterday with our advisor. And I was bored. This is about half of the money we are going to need to live on when we are not receiving salary and I was bored. So, today, I resolve to open up that PDF report and read it line by line. I do not know went wrong with me yesterday, but I repent and will focus today. I am going to watch my investment attitude.