Need help preserving family peace and my sanity at the same time

[chinnp]

I left a job recently and rolled my retirement into a traditional IRA. I've also put myself in a financial situation recently where I can actively save for retirement (yea me!!). I have read a lot on investing, but I know enough to know that I'm not an expert. I also know that it's not a bad thing to have someone around to teach me what I'm doing wrong, hold my hand when the market crashes and I panic, pat me on the back when I'm doing something right and smack me upside the head when I'm not. So, in short, I need a financial advisor.

The problem I run into is my dad is a financial advisor and has been for over 25 years. Naturally, this would seem like a wonderful thing. Sadly, my parents have serious boundary issues to begin with. On top of that, my dad is not much of a teacher. He has no patience. He expects that if he says something is a good deal I am to accept it without question and do it. We also disagree on our basic investment philosophy and his philosophy is that if you're going to do business with him, you're going to do it his way. I don't think he takes this attitude with is other clients, just with his kids. He is a little offended as it is that I'm investing on my own. He's also baffled as to why I'm investing in the first place. (He says when he dies I get his money so why would I save? Yeah, my family has issues, but that's another thread.)

I have been trying to invest on my own, but I've learned enough to know that I don't entirely know what I'm doing. I don't like investing on my own as a long term solution. My dad keeps talking about retiring and I know his brokerage firm is trying to buy his book and get him to retire, but he keeps resisting. He's been talking about retiring for years though. If he retires in the next few months, that solves my problems right there as I can take my business elsewhere without any issues. I've also considered finding a broker on my own anyway and just not telling them, but I hate lieing to my parents ('cuz the subject is bound to come up) and I'm afraid of what might happen to our relationship if they found out. Your advice?

[Cheech]

I would use your father. Explain to him that the reason you're asking questions isn't to question his experience in the field at all, on the other hand, it's because you want to learn the valuable information he has to offer.

When it comes to family and money, it gets extremely touchy. From the looks of it, your dad knows what he's doing. (if he didn't, you would probably have mentioned it already). Talk to him like an adult, sit down with him, make him realize that you're serious about thinking of the future and knowing the right and wrong way to manage your money.

Don't go behind his back. Well, I wouldn't.

Good luck!!!

[chinnp]

My main issue with my dad is that he refuses to invest my money the way I want to invest my money. That's the number one issue I have with him. It's not that I think his methods are bad it's just that I'm not comfortable. (He advises buying single stocks and playing the market. To me it's too risky and I'd rather buy something good and hold it.) He insists this is the only way to invest (and to be fair it does work for him). I don't have the stomach for it and that's the main source of conflict. If our basic investing philosophies jibed I'd have no problem working with him.

[JSmith]

My advice is to be careful investing on your own entirely... start out small and see how you fair, learn how to use stops and calls, etc..., and how to properly evaluate an investment.
As far as money and family/friends ive tried to avoid that at all cost, one of my friendships have been destroyed thanks to money. I agree with what cheech said as far as dealing with your father.


what is your investment horizon? if you dont need to retire for sometime, setting up your profile a little on the riskier side (assuming you can stomache it) will allow you to have some higher rates of returns. There are many ways to setting up a diversified portfolio while still "playing the market" ( which i find rather fun and rewarding, like your father). If you have the right mix of cyclical and counter cyclical stocks it can help protect your investments, of course the ROR for your overall portfolio may not be as high but it is less risky. If you want to private message me with some qeustions, i may be able to offer some more specific advice, however i am not a certified financial advisor, just my own experience and what ive applied from my finance courses.

I hope everything works out between you and your father. I know that money and family is never a good mix and is best avoided.

[chinnp]

I'm 28 so I have a while to invest. I'm not in to playing the market at all. I know some people are and I say more power to 'em. I can't handle the stress and I don't have the experience/knowledge to do it with any sort of chance of success and I know it. Basically, I just want to buy some good quality growth funds and sit on 'em for a long, long, long time. My dad sees this as an absolutely horrid strategy since you do lose money when the market is down. So far this strategy and my picks haven't worked out well for me. I don't know if that's because nothing is working in the crappy market we're in or if I made bad picks or both.

Yeah, money does complicate relationships. Can't live without it though and you're better off having it than not if you ask me.

[JSmith]

well, you can always go mutual funds, vangaurd has some good ones (some have some fairly high minimums) and right now with the market down, you can get some very good prices. Just make sure the majority of their stock holdings are in very well established companies. Of course you can do the same thing with individual stocks as well, established companies with large cash reserves that can weather the recession are good choices, such as GE, GM, Berkshire Hathoway, Microsoft, Google, etc... I have been personally buying heavy into several of these companies.

I definatly agree with you about being better off with money LOL!

[sandsea]

same situation here, except it's my cousin who is the investment person. with my cousin i just said i'm not getting into my finances with you period. her MOM even called me and i stuck to my guns.
do this. never feel bad about a white lie if it keeps the peace with mom and dad. go ahead & invest your money with someone else. don't tell them!!! IF dad asks about it, tell him "look i'm going to wait a few more years to invest, that way you'll be retired and i won't have to argue with you about it" (then wink and laugh out loud- it is funny after all and he'll know it's TRUE) he'll either let it drop or he'll believe you (that you are waiting until he retires) if he's been dealing with people & their money all these years he's bound to have a sense of humor about that fact that you'd rather not argue with him about it. if not, then too bad, you're a grown man. my parents only respected me once i stood up to them, as they're sort of bossy, like your Dad probably is :) keep your boundries for the love of god!! :)

[Ed46g]

Your father methods work for him because he is in the financial fields. He watches the market every minutes. If you're not comfortable with his methods. Why not buy some index fund? The S&P 500 index are very low for now. If you buy and hold it. It should have reasonable return for the next 10 years. Good luck.

[kj5kb]

Congrats on managing your $$ well. You're an adult, you invest it the way YOU want.

You might find the Dave Ramsey radio show interesting: www.daveramsey.com
He addresses the boundary issues too.

His investment philosophy (mine too):
http://www.daveramsey.com/media/pdf/daves_investment_philosophy.pdf

Sometimes you have to politely stand up to the parents to get them to back off...I did, but my issue wasn't $$.

Best of Luck to ya...Don

[murraycod]

Good on you for looking to ensure your financial independence.
I started out many years ago, pre-computers, having laid out a timeline onto which I'd marked some "life moments" which I envisaged living. These are different for everyone and come into being in an organic sort of way, but that shouldn't stop a plan being established.
I sat every Saturday for twelve months, with The Financial Review (Australia) and a pen and paper, and followed 20 Top 100 stocks which I imagined I owned. I plotted and learned what I could about P:E ratios, liquidity, etc. I went to seminars and met some really good people as well as the greed merchants.
So, at the end of my probation, I'd verified the value and security of 'Blue Chip' shares,
and bought some with a ten year horizon. Things weren't always smooth sailing for me personally, but the investments were sound and I managed not to jeopardize them.
Over time I structured more complex investments relative to tax minimization, although my belief is that gearing in and of itself isn't a sound investment rationale.
My life's humps and bumps continue, but I live comfortably and securely and every five to ten years I have an available lump sum to reinvest or otherwise enjoy.
I'm not a share trader, but I have a share trading account and buy and sell my own shares rather than use a broker.
Interestingly, ethical investment funds are an expanding niche. There are all 'shades of green' investment, from those which simply, for example, don't invest in tobacco companies, to funds which actively seek to enhance the plight of third world poor.
Some of these companies perform well, it seems, because they demonstrate the excellence in management required to achieve the high levels of transparency and governance demanded by their investers.
One important point I'd make is, know who's managing your money, It sounds obvious, and you can monitor a CEO and Board on a listed company, but bums on seats change in managed funds and when you're relying on a skilled manager and they move on from your managed fund...........
Someone else mentioned Berkshire Hathaway. With your declared conservative mindset, you might simply like to track Buffet and the like.
I'm not saying don't use your dad as your broker, but I would suggest that if he wasn't your dad, you'd see him as a bad fit for your investment profile.
Good luck.
Greg

[chinnp]

Murray - that is an excellent point about my dad that I had never considered. I wouldn't go to him normally if we weren't related. Our investment philosophies just aren't the same. He's been doing investing for 25 yrs (professionally) at least and I personally, don't think his portfolio is doing as well as I would've expected. But perhaps my expectations are too high.

I just don't have the time or the expertise right now to study the markets and find out what is performing and what isn't. I know the material is all out there, but I just don't have the inclination to read through it. I confess that a lot of the hardcore financial stuff bores me. I'll read a prospectus before investing, but I can't dig around inside financial reports.

I've looked into some "ethical funds" but I don't care for the expense ratios on some of them. I do own one that I'm a big fan of - Amana Trust Growth (AMAGX). It seems to have performed well even in a down market. It's currently down 20-25% but the market is down 30-35% so I'm somewhat happy with it.

[Sploke]

IBasically, I just want to buy some good quality growth funds and sit on 'em for a long, long, long time. My dad sees this as an absolutely horrid strategy since you do lose money when the market is down.

I don't think there has ever been a rolling 30 year window where the market was down. Its a sound strategy - its not going to turn you into a millionaire in a week, but its safe and as long as your portfolio is diversified enough, you're practically guaranteed some gains.

[chinnp]

I'm not expecting to be a millionaire over night. (Would be nice though.) I'm expecting to turn into a millionaire over a long period of time.