3"x5" with financial advice goes viral

[Independent voter]

Guy with a financial blog talks with dozens of financial advisors over the years, he comes to an epiphany, you can write the major financial tips on a 3x5 card. The card goes viral on social media.

Some of these non-Americans won't have like a 401K, the way many of us in the US save for retirement. Same with Roth or IRA.

I don't get the last two:

"Make financial advisors adhere to fiduciary standards"

and

"Support social insurance when things go wrong"

[Goobadin]

Fiduciary Standards are more stringent than Suitability Standards. Establishing an agent as a fiduciary requires that they're actions are always in the BEST interests of their beneficiaries. As opposed to simply requiring their actions to meet a minimal threshold of suitability.

There are two similar options, both with favorable results for you, but one that also has favorable results for your advisor. Under suitability, the advisor will most likely suggest the option that also benefits him. Under fiduciary standards, even if the difference between options is nearly negligible, there be required to advise you take the other.

[alexw]

Fiduciary Standards are more stringent than Suitability Standards. Establishing an agent as a fiduciary requires that they're actions are always in the BEST interests of their beneficiaries. As opposed to simply requiring their actions to meet a minimal threshold of suitability.

There are two similar options, both with favorable results for you, but one that also has favorable results for your advisor. Under suitability, the advisor will most likely suggest the option that also benefits him. Under fiduciary standards, even if the difference between options is nearly negligible, there be required to advise you take the other.

These laws have been reformed, such that fiduciary standards will become the de facto standard (where suitable standards are the current standard) and are going into force on Jan 1st 2018, which is a very good thing.

Not surprisingly the republicans have gone ballistic over it as its another one of Obama's executive actions.

[RaoBurning]

I wish I made enough money to be able to follow any of that advice.

[Gamdwelf]

This is common knowledge why is this viral?

It's like don't light yourself on fire etc.

[Rukh]

This is common knowledge why is this viral?

It's like don't light yourself on fire etc.

Oh DON'T light yourself on fire? Man that was just in time.

[Annoying]

"Support social insurance when things go wrong"

Well, I guess you could replace it with:
"Don't get unlucky and get sick, or you can't do any of these things."

[Malachi256]

This is common knowledge why is this viral?

It's like don't light yourself on fire etc.

Dave Ramsey wouldn't be in business if most people had financial common sense.

[Gamdwelf]

Dave Ramsey wouldn't be in business if most people had financial common sense.

Fuck that guy he preys on the dumb to make money.

[Malachi256]

Fuck that guy he preys on the dumb to make money.

Lol sheesh. I'd say that credit card companies prey on the dumb (or pretty much any "buy now, pay us [much] later!" scheme), but if you want to go after Dave that's fine. I've never heard him say or sell anything suspect. Yes he sells financial self-help stuff, but it has never come off as predatory to me. Likewise, I know there are many many people who would give him a lot of credit for helping them.

[Independent voter]

I got caught by the buying individual stocks thing, it's practically gambling.

[Gamdwelf]

I got caught by the buying individual stocks thing, it's practically gambling.

It's really not gambling with stocks. Derivatives yes stocks and bonds not so much.

[Independent voter]

It's really not gambling with stocks. Derivatives yes stocks and bonds not so much.

Mmmmm, it depends which stock you buy. There's even a group of stocks called "penny stocks" that you buy very cheap hoping they greatly increase in value.

But google might be stable for the next 5 years, that's true.

[Garnier Fructis]

I really hope by 'mutual fund' he means 'index fund' and not 'actively managed mutual fund.'

[Grimbold21]

No idea what any of that means.

[Deleted]

So, basically: bet save, dont bet everything you have, don´t bet everthing on only one thing you think you know you can bet with because the other will know about the stuff that is going to be bet more than you do, you can´t bet tax´s, don´t lough on those that haven´t bet becouse they might pay for your ass in case you loose everything at the betting.

[Masark]

Some of these non-Americans won't have like a 401K, the way many of us in the US save for retirement. Same with Roth or IRA.

For Canadians, those translate to RRSP (Registered Retirement Savings Plan) and TFSA (Tax Free Savings Account).

[Celista]

Most of this is OK advice if you have little to no finance knowledge; for some reason he did not include "start saving and investing as early as possible" which is more relevant to the average layperson than his last two pieces of advice (not that his advice was bad; it's just not something I personally would have included on a 3x5 card, if that's all room I had advice to give). I do agree that we need to uphold ethics in finance and that we should support Social Security.

Buying and selling individual securities is not an issue for individuals with average to better than average finance knowledge; playing stocks can be a losing matter due to transactions fees, however. And if you have no idea how to properly diversify a portfolio, read financial statements, calculate the intrinsic value of a stock, etc and are not willing to keep up with business news and financial trends then you are indeed better off buying into a managed mutual fund or an index fund.

[Evil Midnight Bomber]

This is common knowledge why is this viral?

It's like don't light yourself on fire etc.

You might be surprised to learn just how uncommon "common knowledge" really is.

[EliWallach]

Implied but not mentioned outright. Dollar cost averaging. Invest your money on a regular basis. When the market's going down you're investing, when the market's going up you're investing. Don't try to out guess the market because you will lose. Watch your investments. Don't chase the highest returns. If you're under performing, swap to something else. But always go for quality. Will you be rich? Probably not, but you will be comfortable and that's about as good as it gets.