On this episode of On The Money, the retirement planners at Ruedi Wealth Management answer listener questions and discuss how to protect yourself from online financial scams.
(0:44) Market Update
(5:36) Should We Continue to Diversify Internationally?
“The nature of holding a diversified portfolio is at all times you are going to own something that you’re kind of disappointed in and you’re going to own something that is doing really well. And at those times you are going to wish you didn’t own the things that aren’t doing well and put all your money in the things that are working well. But that’s hindsight, you don’t know how that is going to work out in the future.”
David Ruedi, CFP®, RICP®
(11:47) Listener text: According to what I read and listen to angel investing pays out 10,000x the average return of the stock market. I was told I am wasting my money investing in a 401k – what do you know about angel investing?
“Whoever told you’re wasting your time and money investing in the stock market is no angel.”
Paul A. Ruedi
“If I was advising a client who wanted to invest in venture capital or angel investing, I’d say you still want to put your serious money in your 401k in a low-cost, diversified portfolio. If you want to take a small portion of your investment assets and try angel investing – knock yourself out. Just don’t do it with any money you can’t afford to lose.”
David Ruedi, CFP®, RICP®
(19:14) Listener email: I am 60 years old and have $50,000 in an IRA and $17,000 in a retirement annuity – I’d like to roll this into something that has a 7-9% annual gains or more. Can I do this and avoid taxes and penalties?
“There are investments out there that have an expected long-term average return in that range, but it is not going to be every year, far from it. There will be years your portfolio balance will decline substantially. Anything that has that type of expected return is going to have a lot of years the return is negative. I don’t think there is anything out there that can guarantee a 7 or 9% return, year after year, after year.”
David Ruedi, CFP®, RICP®
“If you want a stable return, where you want it year-in and year-out, the only thing that can really do that is fixed income (bonds). You are not going to get 7-9% in bonds, you will probably get closer to 3% or a little more or less depending on the bond.”
Ryan Repko, CFP®
(30:17) How to Protect Yourself from Online Scams
“Your email is the frontlines of battle for a lot of these scams. Be highly skeptical of any email in your inbox where you don’t know the sender. And even sometimes, the sender can be compromised – for example a hacker or scammer can send an email the looks like it came from someone who is your friend or family member. You always have to check beyond just a quick glance.”
Ryan Repko, CFP®
“There are situations where people will establish relationships with people online and establish trust and confidence, then all of a sudden they are asking for money.”
Paul A. Ruedi
“A lot of times these scammers want their compensation in some weird form, like cryptocurrency or iTunes gift cards.”
David Ruedi, CFP®, RICP®