Stop the Investing Rip-off E-Book

David B. Loeper

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 340

Veröffentlichungsjahr: 2011

Beschreibung

The questions every investor should ask before parting with their hard-earned cash This book serves as an advocate of the consumer and brings to light what insiders know about the side of the sales pitches that consumers don't, but need to hear. Stop the Investing Rip-Off reveals the questions every investor should ask during a financial sales pitch before they pull the trigger and buy the next mutual fund, stock, advisory service, or other investment product. Based on David Loeper's nearly twenty-five years of experience of seeing the inner workings of the industry, this updated edition of his classic book offers new strategies based on the performance of the stock market over the past two years. * Sheds light on the oft unseen deceit of the financial services industry * An updated and revised edition of the bestselling Stop the Investing Rip-Off * Written by David Loeper who is regularly quoted in Kiplinger's Money and Investment News and regularity contributes to Forbes Intelligent Investing Stop the Investing Rip-Off, Revised and Updated is filled with advice for investors who want to avoid becoming victims of smooth talking salespeople and the effective advertising and marketing campaigns designed to evade reality and prey on your emotional desires.

Leseprobe

Contents

Preface

Acknowledgments

Chapter 1: Major Brokerage Firms

We All Start Somewhere

Are You the Prey of Such a Hunter?

What You Need to Care about When Dealing with Brokers

Why the Firm Isn’t All That Important

Protecting Yourself

Track Records

Don’t Be Fooled

Chapter 2: Investment Advisers

A Cozy Relationship with You as the Third Wheel

Why You Should Not Judge a Book by Its Cover

Questions You Should Ask of Money Managers

Chapter 3: Hybrids—Advisory Services Provided through Brokerages

Beware of the Hidden Clause

The Best Test for Adviser Objectivity

Chapter 4: Discount Brokers

Discount Brokers Are Sales Organizations, Too

Bait and Switch

Buyer Beware: Discount Brokers Encouraging “Churning”

Questions to Ask to Get the Side of the Story You Don’t Hear

Chapter 5: Financial Planners and Wealth Managers

Peeling the Planner Onion

Verify Registration

Chapter 6: The Financial Press

“Rule of Rules of Thumb”

Questions to Consider about the Financial Press

Chapter 7: The Broadcast Media

Expert in Retrospect—Mind Games of Experts

In Bed Together

Chapter 8: Authors, Self-Help Books, and Financial Celebrities

Financial Authors

Financial Celebrities

Chapter 9: Mutual Funds and ETFs

Don’t Be Fooled by Fancy Charts

Don’t Be Sold by Magicians

Benchmarking, Star Ratings, and Peer Groups

“Peers That Are Not”

Chapter 10: Insurance Agents (and Insurance Companies)

Cut Through the Hype

How Much Is That Guarantee in the Window?

Stealing Your Bucket List from You

Emotions and Reason

Avoid Needless Risk

Equity Index Annuities—The Next Auction Rate Note Disaster?

What Is Often Presented about Equity Index Annuities

Raising the Concept of EIAs One Step Higher

A Deeper Look at Why Insurance Companies Offer EIAs

Questions to Ask Insurance Agents

Chapter 11: Your Company-Endorsed Retirement Plan Adviser

The Main Question to Ask (in Addition to the Questions in Other Chapters)

Chapter 12: Banks and Trust Companies

Don’t Trust Guarantees

Chapter 13: Software, Web Sites, and Financial Educators

Avoiding the Numbers Game

Heads or Tails

The Question You Must Ask to Protect Yourself

Chapter 14: Pitches They All Use to Sacrifice Your Life

Dumbfounded by Questioning

The Fallacy of Risk Tolerance in Setting Asset Allocation

The “Risk Tolerance” Game

False Precision

Be Careful of Making Needless Sacrifices to Your Life

We Have New Information and a New Confidence Level

Preparing for Bad Markets Takes More Than Simulating Them

Chapter 15: Resources to Protect Yourself

The Root of the Problem

Isn’t There a Law Against This?

Places to Go to Learn the Truth

Conclusion

Appendix A: The Other Millionaire You Make with 2.5 Percent Excess Fees

Appendix B: The Other Millionaire You Make with 1.5 Percent Excess Fees

About the Author

Index

Copyright © 2012 by Financeware, Inc. All rights reserved.

The first edition of this book titled, Stop the Investing Rip-off: How to Avoid Being a Victim and Make More Money, was published in 2009 by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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ISBN-13 978-1-118-13306-4 (paper); ISBN 978-1-118-17781-5 (ebk); ISBN 978-1-118-17783-9 (ebk); ISBN 978-1-118-17782-2 (ebk)

This book is dedicated to my father, the late Kenneth A. Loeper, who taught me to make sure that no one pushes you around. His passion for living his life, his ethics and integrity, his strength and empathy taught me the real meaning of virtue and integrity. I miss you, Dad, and I only wish I could have written this while you were still with us.

Preface

According to the U.S. Department of Commerce, the financial services industry (banks, brokerage, and insurance) represents more than 7 percent of the nation’s gross domestic product (GDP). If you think about this, the cost of “these services” is staggering. How can it cost us 7 percent of our total output each year just to manage and service our wealth?

In 2009, the GDP for financial services was $828 billion. (We are excluding real estate from the calculation to focus on banking, brokerage, and insurance and exclude home ownership and direct real estate investing which would more than double the figure.) Total U.S. financial assets stood at $40 trillion in 2009, meaning that the financial services industry as a whole is skimming 2 percent a year out of everyone’s wealth.

Some of these costs are obvious, like ATM fees, insurance premiums, mutual fund expense ratios, brokerage commissions, or investment advisory fees. Some are hidden or at least require some extreme effort to discover. As I mention in my book, Stop the Retirement Rip-off, more than 80 percent of people do not know what, if anything, they are paying in fees for their 401(k) plan according to the American Association of Retired Persons (AARP) and a study by the Government Accountability Office (GAO). New rules are going to soon fix this retirement-plan hidden-fee problem starting in 2012 and 2013 when participants receive fee-disclosure statements for their 401(k) that will put a lot of people into Retirement Plan Sticker Shock.

The OTHER Millionaire You Make

Say you and your spouse are 25 years old. You are a teacher and your spouse is a police officer. Your combined incomes are $75,000. Things are tight, but your parents taught you the value of compounding, saving for a rainy day, and retirement. Both of you have retirement plans through your employers with matching contributions, and despite the compromise to your lifestyle, together you defer $5,000 a year to your retirement plans. This is a little less than 7 percent of your income; far below what many advisers and financial gurus would advise with their common rules of thumb. Your employers match some of your contributions, which adds another $2,000 a year to your retirement savings, bringing your total annual retirement savings to $7,000 a year. Both working for the government, your jobs are fairly secure and your incomes will likely adjust for inflation each year along with your savings and matching employer contributions.