AUTHOR: Steve Spinella on 8/17/2025 FIRST: Richard Hayman on 8/17/2025 | RECENT: David Powell on 8/31/2025
Comments
Thanks, Mark. Lots to resonate with here. Our own 94 you mom with VD is more worried about letting her parents know where she is than the money, although that has come up.
I do direct investing, but not using a financial product. Rather I have a list of 25 companies and I invest approximately equal dollar amounts in each one. This is a form of direct investing because I have an "index" that I am buying directly. There are various benefits to this:
1) It is like the Dow Jones industrials, but a different set of equities, which I have selected based on my preferences regarding fundamentals, diversification, and analytics.
2) Because I own each equity directly I can select shares to sell based on tax considerations. This is a form of heightened tax efficiency.
3) Abitragers regularly skim money off the market. Direct investing enables me to keep some of this money through active trading strategies.
4) While past results are no guarantee of future performance and DI will not exactly follow any index, this strategy has over 1,3, and 5 year horizons provided lower risk and higher return than owning a total market fund.
5) Obviously there are no management fees, but equally obviously I must make the management decisions. The size of the portfolio and the value of my time influence whether this is a good strategy.
I enjoyed reading the discussion of joint marital vs separate accounts. I'm like RQuinn, but it helps me to remember that our experiences so impact our perspectives. As for legacy, my mother was reminding my father about the soldering iron he bought without consulting for years. I certainly didn't find that constructive. Neither of them developed much insight into investments, but that was common in their era. I learned much from my father-in-law after their early demise.
Regarding what happens when I die, I wrote a set of alternatives for my wife and mother-in-law to consider after my father-in-law died, as an appendix to a family planning document, and that appendix is still there and provides the just-in-time alternatives for my wife or children to choose between when I'm gone.
In practice I am the family full service financial advisor, but my fees are very low. Still, it's fair to say that I do better when they do better (because of joint finances and shared inheritances!) (My annual fee is running about 0.1% of AUM and it's voluntary at that.)
In tax estimating, I estimate. Missing a marginal breakpoint is usually a marginal error. I also plan without including any traditional IRA contributions so I have a (married older) $16k margin. And with these things I also comfort myself :-).
My son tells me this sort of thinking--"leverage is good"--pervades his young, rich, and smart peer group. (He works for one of those companies we've all heard about.) I know my thoughts in this regard are of little value and even less respect for that peer group. They are, after all, younger and smarter.
If they had ears to hear, though, I would talk about the selective bias in storytelling, since those who don't survive do not tell their stories, and stories of loss are less exciting than stories of risk followed by reward.
Since they are young, smart, and rich, they have the opportunity to choose security, yet risk sits at the door and flashes enticing glimpses of an even more wonderful life, no matter how wonderful life already is.
If that was once you and something helped you, what was it? I was one of those looking on and thinking I do not have the luxury of making such foolish choices if I am going to survive and live well in my own situation.
I am grateful I am rich and secure enough to worry about someone stealing my assets. Thanks for starting this discussion, Ben! (Is the alternative to be poor enough to only worry about stealing someone else's assets? Is the messy middle both or neither?!)
Here is another reason not to save up HSA expenses--I would think they are an auditable item in the year you reimburse them. If you reimburse them right along, there is not such a huge audit risk in any particular year, and the audit risk rolls off a bit year by year as the 3 year and 7 year windows pass.
Someone once said they wouldn't join a club that would let them be a member. I feel the same way about advisors and wealth managers for people who have less than 10 million invested. At some point the portfolio gets big enough that it's quite reasonable to hire someone to manage it--under your supervision, because it would be foolish not to supervise such a manager.
I cringe every time I hear the term "smartvestor pro."
Comments
Thanks, Mark. Lots to resonate with here. Our own 94 you mom with VD is more worried about letting her parents know where she is than the money, although that has come up.
Post: Deeply Rooted
Link to comment from May 27, 2026
I do direct investing, but not using a financial product. Rather I have a list of 25 companies and I invest approximately equal dollar amounts in each one. This is a form of direct investing because I have an "index" that I am buying directly. There are various benefits to this: 1) It is like the Dow Jones industrials, but a different set of equities, which I have selected based on my preferences regarding fundamentals, diversification, and analytics. 2) Because I own each equity directly I can select shares to sell based on tax considerations. This is a form of heightened tax efficiency. 3) Abitragers regularly skim money off the market. Direct investing enables me to keep some of this money through active trading strategies. 4) While past results are no guarantee of future performance and DI will not exactly follow any index, this strategy has over 1,3, and 5 year horizons provided lower risk and higher return than owning a total market fund. 5) Obviously there are no management fees, but equally obviously I must make the management decisions. The size of the portfolio and the value of my time influence whether this is a good strategy.
Post: Direct Indexing Anyone?
Link to comment from May 17, 2026
I enjoyed reading the discussion of joint marital vs separate accounts. I'm like RQuinn, but it helps me to remember that our experiences so impact our perspectives. As for legacy, my mother was reminding my father about the soldering iron he bought without consulting for years. I certainly didn't find that constructive. Neither of them developed much insight into investments, but that was common in their era. I learned much from my father-in-law after their early demise. Regarding what happens when I die, I wrote a set of alternatives for my wife and mother-in-law to consider after my father-in-law died, as an appendix to a family planning document, and that appendix is still there and provides the just-in-time alternatives for my wife or children to choose between when I'm gone. In practice I am the family full service financial advisor, but my fees are very low. Still, it's fair to say that I do better when they do better (because of joint finances and shared inheritances!) (My annual fee is running about 0.1% of AUM and it's voluntary at that.)
Post: One Good Call?
Link to comment from April 18, 2026
Point made, Elaine. Thanks. I will ask myself what story I have to tell in the months ahead, not just what I would like to read.
Post: Note to HD Writers and Contributors
Link to comment from April 4, 2026
In tax estimating, I estimate. Missing a marginal breakpoint is usually a marginal error. I also plan without including any traditional IRA contributions so I have a (married older) $16k margin. And with these things I also comfort myself :-).
Post: Yes, I am a NIIT wit
Link to comment from February 14, 2026
Perhaps you can ask your favorite AI/large language model to explain it ;-).
Post: Yes, I am a NIIT wit
Link to comment from February 14, 2026
My son tells me this sort of thinking--"leverage is good"--pervades his young, rich, and smart peer group. (He works for one of those companies we've all heard about.) I know my thoughts in this regard are of little value and even less respect for that peer group. They are, after all, younger and smarter. If they had ears to hear, though, I would talk about the selective bias in storytelling, since those who don't survive do not tell their stories, and stories of loss are less exciting than stories of risk followed by reward. Since they are young, smart, and rich, they have the opportunity to choose security, yet risk sits at the door and flashes enticing glimpses of an even more wonderful life, no matter how wonderful life already is. If that was once you and something helped you, what was it? I was one of those looking on and thinking I do not have the luxury of making such foolish choices if I am going to survive and live well in my own situation.
Post: Modest Leverage for Young Investors
Link to comment from December 20, 2025
I am grateful I am rich and secure enough to worry about someone stealing my assets. Thanks for starting this discussion, Ben! (Is the alternative to be poor enough to only worry about stealing someone else's assets? Is the messy middle both or neither?!)
Post: Can we be completely safe?
Link to comment from December 20, 2025
Here is another reason not to save up HSA expenses--I would think they are an auditable item in the year you reimburse them. If you reimburse them right along, there is not such a huge audit risk in any particular year, and the audit risk rolls off a bit year by year as the 3 year and 7 year windows pass.
Post: HSA Proposal
Link to comment from December 2, 2025
Someone once said they wouldn't join a club that would let them be a member. I feel the same way about advisors and wealth managers for people who have less than 10 million invested. At some point the portfolio gets big enough that it's quite reasonable to hire someone to manage it--under your supervision, because it would be foolish not to supervise such a manager. I cringe every time I hear the term "smartvestor pro."
Post: Does My Sister Need a Financial Advisor?
Link to comment from November 8, 2025