Retirement, Recruitment, and the Lottery

Attendance:  Bickford, Brian

Topic 1:  One of our members is researching college savings plan.  We'll have a meeting about that soon.

Topic 2:  Retirment
Frontline: The Retirement Gamble

This one made the group a little concerned about the future.  The takeaway was that high fees could erode a good amount of potential gains.  The example that they give is that an account making 7% per year with 2% fees would lose 2/3 of that 7% gain over a 50 year time horizon.  The "solution" is to avoid high fee mutual funds and go for low cost index funds.  Now in reality, you probably have to save some sort of fee, so you'd never get the straight 7%.  One should just do their best to find funds with the lowest fees possible.

Fees for 401(k) plans tend to be difficult to find.  Those of us with these plans should really look into those fees.  If we do find exorbitant fees, then we might want to consider different options.  Whether those options are actually available is yet to be determined.

We should also check out the fees of the funds that we currently own.  The expense ratio will be the most obvious.  We didn't end up to bad.  At least, we don't think so.  Let's avoid all of those funds that we were looking at with 1%+ fees.  Gotta think about those dividend funds.  This thought applies, but maybe there is a little more to it.  More discussion necessary.

SPY:  0.09%
EWZ:  0.61%
NORW:  0.5%
ENZL:  0.53%
T:  0%

The move to this style of retirement plan was somewhat of an accident.  The plans were originally set up as a "tax dodge" for the well to do.  An outside story (heard it on the radio) with the fellow that invented the plan confirmed that it wasn't intended to be everyone's standard retirement option.

Mutual funds are bad since they potentially charge high fees.  Hedge funds are evil.  They have almost no risk.  They only get paid if they make a profit.  Everyone wins if there is a profit.  The investor loses if there is a lost.  The hedge fund just closes the fund, returns what is left, and starts a new fund.

Topic 3:  Recruitment Firms (Next week!)

How to find them?
How do they make money?  - based on first year's salary.
What do you miss out on by using them?
Is it a good idea to use them?

Topic 4:  Lottery in Florida

The lottery funds education.  It was meant to be a supplement, but the government pulled funding when the lottery dollars showed up.
Bright futures is not what it used to be.

Topic 5:  Rates on student loans about to double... Dag!

Student Loan Interest Set to Double

Does this impacts the loans that we have from the past?  Not sure.  Have to call.

Profit!