Education = FutMP900341471Not On My Nickel is Do It Your Self, but only from the standpoint of selecting a Portfolio Manager

How do you achieve the best retirement returns?  First, understand performance does matter.  Poor advice will detract from your performance and how much money you will have at retirement.

At Not On My Nickel you learn how to determine what is good and what is bad advice. At Not On My Nickel, you are not doing it yourself. You are given the tools, research and education to select your portfolio manager, who will do all the retirement investment management for you.

Ideally, one does not change managers very frequently. Not On My Nickel helps learn how to research portfolio managers that have been in the business for decades and have the performance results that exceed their relevant indices. There are not many that consistently outperform their index. Not On My Nickel believes in strictly investing with the few portfolio managers that do.

Passive vs Active Management

Not On My Nickel believes in principally active management, but solely with our nation’s top portfolio managers that have proven their worth and have out-performed their index for years.  They must meet our six strict criteria, as defined on our home page here, Save Your Sanity”  and have prudent and reasonable fees, as one believes in “an honest day’s work, for an honest day’s pay.”  These are the true fiduciaries, not middleman that keep you in the dark as to performance and unnecessary fees on top of fees.  By definition, that model is NOT a fiduciary business model.  It is simply a model that developed with the advent of 401(k)’s in the early 1980′s.  It is a redundant business model.

This business model and the “financial planning” industry is now focusing on lower fee mutual funds and ETF passive investing, solely as a means to keep their high fees of 1%- 3%.  Why?  In this low interest rate environment, once you pay your “advisor” your returns may be negative.  Thus the advice industry is able to retain their fees, if the asset manager (who is actually managing your money) has lower fees, which is the case with passive investing.

There may be instances when passive management is warranted, but a blind adherence to passive investing, guarantees performance, after fees, below an index.

Not On My Nickel’s Vision

We are here to change the current business model for retirement investing. Ideally, everyone would have defined benefit pensions, but that is no longer the case and probably will not be the case. What is the next best alternative today? We believe that in today’s retirement investing marketplace “assets under management fees”, on top of mutual fund fees, are simply a scheme to defraud a retirement investor of savings that belong rightfully to them.  We provide the tools and education to help retirement investors take charge.

Screen Shot 2013-08-19 at 5.34.26 AMTake a look at this chart on the left of a 401k investor’s dreadful returns compared to a Not On My Nickel researched portfolio manager, PRWCX. How much is lost, in many of the 401(k) plans today? So much money is needlessly lost, particularly from newly-designed target date options. Yes, in most 401(K) plans, you are often losing your hard-earned savings to fees and poor returns. The returns on the left are the actual returns, filed per SEC reporting standards.

retirement savings per robert hiltonsmith

Robert HIltonsmith’s retirement reality with a focus on hidden fees

In the instance on the left, if you have a State Farm sponsored plan, managed by Black Rock, as the chart on the left depicts, and are in one of their Target Date Fund options(NLHAX), you could be giving up thousands of dollars needlessly for advice fees, 401(k) fees and poor returns. Further in this instance on the left, your employer may have allowed Charles Schwab/Guided Choice to further charge you an advice fee to select a poorly performing Target Date Fund.

Read the study to the right, prepared by Robert Hiltonsmith. You are losing hundreds of thousands of dollars to worthless fees in most 401(k) plans.  Not On My Nickel further highlights the worthless advice fees, not mentioned in this study, that are being skimmed from your nest-egg by “Advisors” and the poor returns of today’s Target Date Funds or packaged exchange traded funds, (ETF’s) that have no performance history!  It is like throwing money into the wind.

You can change this picture today!  Despite the promotion by main stream media, described in this Blog Series, Part I, by the Wall Street Journal and the New York Times, financial advice for everyone, is not the option. Employer sponsored 401(k) education is conflicted and therefore of little value. Conflicted advice and education, provided by a sales force, selling products, is not advice and education. The result is financial illiteracy. Bona fide retirement investing education that provides real transparency and the tools to make informed choice is the solution.

Happy businessmen
With the advent of the Internet, retirement investors can now take control of their nest-eggs with the proper tools and research
With the advent of the Internet and easy access to information, many people are now buying airplane tickets and booking hotels online. The intermediary, the travel agent, has been eliminated in many transactions. Why? One can obtain the same thing through less money and through their own research, perhaps delivering a better vacation by exploring the alternatives that best fit their life styles.

Not On My Nickel believes with the proper tools, real education and transparency, retirement investors can get engaged and pick their own portfolio managers. Why is this so critical today?

No Transparency

(1) In most cases you have no idea what the performance will be for the selections that your financial advisor is recommending for your retirement nest egg. See Not On My Nickel’s Blog on the lack of audited performance standards for Advisors. They are using asset allocation models and placing you in so many asset classes, you really do not know if it is better or worse for your returns.

Redundant Fees that Deliver No Value

(2) You are paying the financial intermediary in most cases an unnecessary fee and you are guaranteed to do worse than an index fund, if you are in an index fund, as a result of this fee.

Advisor Created Obfuscation in Employer Plans – Get A Simple Straightforward List of the BEST Portfolio Managers, with Proper Education, at Not On My Nickel

(3) If you are provided a simple list of the very, very few top portfolio managers/mutual funds that have outperformed the index for many years, after fees, you will most likely do better, since you are saving the advisor fee and your returns are not being diluted by poorly performing funds.

Advisors Subject Your Savings to Potential for Fraud - Not On My Nickel Eliminates the Risk of Advisor Fraud

(4) You eliminate the risk of Ponzi schemes! Here is a another one reported recently in Investment News: FINRA alleged that from December 2010 to January 2013, he converted customer assets in two trust accounts, using at least 50 transactions falsely characterized as loans, and transferred the money to two of his friends. One victim was a 77-year-old retired homemaker with Alzheimer’s who lived in a nursing home, FINRA said in the settlement agreement. Mr. Thornes diverted about $1.7 million from the homemaker’s $2 million trust account, FINRA said.

Why Hasn’t The Retirement Investor Taken Charge Sooner?  Workplace Financial Education Has Been Designed To Move Your Towards Hiring a Financial Advisor

Assume for a moment you go to your 401(k) menu selections, how do you know which one to pick?

• Does the financial education package provided by your employer, as mandated by the Department of Labor, show you how to select the best fund for your
needs? Not normally.

• Does the financial education package provided by your employer, as mandated by the Department of Labor highlight the additional costs and risks of going
with a Target Date Fund? (Read SEC Investor Advisory Committee’s List of Risks with Target Date funds here –  It is a long list!)

• Does your financial education package encourage you to get help in picking a mutual fund?  No, there is no employer provided education on how to measure what mutual fund is best for you!  Here is the typical response you get for any employer plan option:  “Yes, click here to hire an advisor.”

• Does your prospective financial advisor show you your monthly returns for your total portfolio after all fees, including the advisor fee, before you choose to invest with them? If not, it is time to take over.

Example – a Fidelity 403(b) Plan

One Employer’s Defined Contribution offers 353 options! Wow, where do you begin?

Now for this plan, administered by Fidelity Investments, it does provide a good screening option for the investments they offer. Say you want to select a Balanced Fund, with low fees. You run Fidelity’s screener using low expenses and here is what you get, shown in the Chart Below:

Screen Shot 2013-07-29 at 12.33.35 PM

Do not hit the button after you take a look at this graph – “I need help, I need a financial advisor!”  Through Not On My Nickel’s real financial education curriculum, that is hands-on, pragmatic and straight-forward, you will be on your way. It is the first and only retirement curriculum designed for you to take charge of your retirement savings, without an unnecessary layer of a financial advisor that operates in their interest.  Learn through Not On My Nickel straight-forward curriculum how to read this chart, what each item means and how to make the choices in your best interest.  Learn why you would never want to select the Target Date Option. Learn how much money you are losing if you are in the Target Date Option.  Learn the fees associated with each option.

Remember from NOMN’s last week’s Blog Post on audited performance standards, if your financial advisor does not post their performance standards monthly on their website, and are measured against an approved index, caution. Note that is a red flag and cause for concern.

Learn more about Not On My Nickel tools, educational services and how to research the select few top performing mutual funds for your retirement nest egg today. Invest a few hours of time and you will be on your way to taking charge of your retirement nest-egg with portfolio managers you believe in, without the high fees and associated risks of the unknown.

Brokerage Window

Remember, if you are in a 401(k) plan with options that have high fees and poor performance, you have an alternative today!  You may use your 401(k) Plan’s Brokerage Window with the research and education provided by a Not On My Nickel subscription, whose annual costs are less than the Load Charge on a typical mutual fund and provides the tools, research and education to eliminate all these fees detracting from the performance of your retirement savings.



Coin Dropping Into Piggy Bank

Mandatory Retirement Savings is a Concept You Might Want to Investigate

We wrote in an August 3rd Blog on how employers take automatic deductions from employee’s paychecks and place into Department of Labor approved Target Date Funds that carry high fees and poor performance. Many employers are already taking 3% of salary for many employees that do not “Opt Out” of the deduction. You probably were not even aware of this, as it was probably given to you in a long disclosure document in Size 4 font, that you did not have time to read.

Just where is your paycheck going?  Time to investigate.  The answers will shock you; very little of the deduction is going into your retirement fund!  In last week’s Blog we analyzed the costs of being in a “default option” Target Date Fund.

Compare the Results of a Not On My Nickel researched fund to a Target Date fund.

Take a look at the shocking analysis below, Comparison of State Farm Target Date Fund with Not On My Nickel Researched Fund.

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On a $10,000 investment in your 401(k) with the State Farm Target Date Fund (NLHAX) you lose money in the first year. After five years, you generate a gain of $715! Note, this $715 could diminished to nothing or negative if you are paying typical advisor fees from .25% – 2.50% asset under management fees. With a Not On My Nickel researched fund, after expenses, you earn approximately $3860 for the same period. That is 5 times greater than your employer selected Target Date Fund, designed and created by BlackRock.

Wall Street is Pushing a Mandatory Savings Model – Up to 10% of your Paycheck Annually

“CEO Larry Fink thinks Americans are not saving enough for retirement. Fink said on CNBC Wednesday morning that the U.S. needs a mandatory savings policy to help Americans accumulate wealth for lengthening lifetimes that will require more retirement income. “ Now there is a push by Wall Street to take out another 9 -10% of your salary automatically to fund your retirement or is it Mr. Fink’s retirement?

Remember from our (August 3 Blog), Mr. Fink is CEO of BlackRock, a creator of mutual funds and exchange traded funds (ETF’s) held in many retirement accounts. State Farm’s Target Date fund advisor works for Mr. Fink at BlackRock, who selected principally BlackRock ETF’s for the fund, as we reported in last week’s Blog.

Screen Shot 2013-07-30 at 4.44.46 AMThe fact remains that many Americans are already having 3% deducted from their payroll and have no idea where it is.

If the financial services industry is now pushing to have 9% or 10% taken directly from your paycheck, annually, it may be time to take charge, take control and monitor where your life savings is going.

Let’s assume you make $60,000 per year and your spouse makes $30,000.  You would immediately have $9000 taken from your earnings, assuming the financial services industry gets their way.  While one cannot argue the need to save more for retirement, one can argue you must stand up and choose and understand where that $9000 is going.  As the August 3 Blog Post showed you, your lack of inaction will cost you thousands upon thousands of dollars each year.  Forget clipping coupons.  This is real money to go after and it really belongs to you, not to an asset manager firm or sales person who calls themselves an ‘asset manager’ or  ‘advisor’.

Above,  is a reaction on Twitter to BlackRock’s Mr. Fink’s pronouncement about mandatory retirement savings, in this Twitter post by Zerohedge.


Problems MP900387715


Target Date Funds are the default option in your 401(k) or 403(b) account.

Here are a few definitions to get started on this Blog Post:

Target Date Fund: “The funds generally are set up so that investors can put their entire nest egg into a single one linked to the year they expect to retire, in effect putting a savings strategy on autopilot,” as the Wall Street Journal reported in “Missing the Target” on June 14, 2013.

Default Option: Many employees are not aware that if they do not sign up for their 401k or “Opt Out”, their employer will automatically deduct from their paycheck for their retirement savings. Where does your hard-earned money go? Into a highly risky, very expensive, unproven Target Date Fund approved by the SEC and Department of Labor. Why would regulators do that? Wall Street convinced them to.  Here are the risks and solutions as reported by the SEC Investor Advisory Committee.

Simplicity for Retirement Investors: The government likes them because they are simple for investors. Just put your money in one spot. One can do the same at Not On My Nickel education. Learn how to compare what is in your best interest with Not On My Nickel education. There is a comparison below on what you are losing out on by allowing these default options, but first a few more definitions.

Not On My Nickel: A revolutionary retirement research and education service that engages retirement savers to take control of their retirement savings through choosing, on their own, one or two mutual funds.  Not On My Nickel provides ongoing monthly research and education on these funds for the investor. What is the difference between most Target Funds and Not on My Nickel researched funds?  Not On My Nickel researched mutual funds carry less risk, significantly lower fees and proven portfolio manager performance that outperforms indices. It is simple, easy and much more conservative than a Target Date Fund.

Regulatory Capture: The influence of big-monied lobbyists on our nation’s financial services regulators, on behalf of the financial services industry.

Government Oversight: The Department of Labor knows these funds are fatally flawed, but Wall Street likes them. That is what is called regulatory capture. Wall Street determines the investments that go into the Fund. The more assets in the Funds, the more the financial services firms make.

Who Wins: Wall Street- Target Date Funds generate significantly more fees for financial services firms. Take a look at what the holdings are in the State Street 2030 LifePath Index Target Date Fund in the Chart on the lower left:

Screen Shot 2013-07-30 at 3.46.35 AM

Asset manager, BlackRock wins in this case. You will note that most of the holdings in this Target Date Fund, State Farm Life Path 2030 are Blackrock ETF’s or IShares. Who is the lead advisor to State Farm on this Target Date Fund? Blackrock’s Amy Whiteslaw, the Director of Blackrock Institutional Trust Company. Ms. Whiteslaw is one of the Portfolio Managers for State Farm, with an employment history of designing defined compensation plan holdings.  No conflict there?

The unlucky retirement investors that have been placed in the State Farm 2030 Life Path Fund or the TIAA-CREF 2030 Index Fund or TIAA-CREF 2030 Target Date Fund are losing due to higher fees and poor performance compared to Not On My Nickel researched funds.  These retirement investors now have a choice.  Not On My Nickel research and education provides the tools every retirement investor needs to take charge and invest in a few easy steps on your own.

Power of Compounding: The longer you wait to take action the greater you lose. See what waiting costs you at this compounding calculator at the SEC website.

As the Wall Street Journal reported: “Target-date funds, which are often composed of separate underlying funds, also carry widely disparate fees, and higher-cost funds can cut into investor returns. Some of these underlying funds passively track indexes, while others actively try to beat the market—an approach that can push fees up and lead to diverging performance.”

Here is a comparison between the performance of three Target Funds and a NOMN researched fund for your retirement savings.  One can easily select the NOMN researched balanced fund and invest in it, in place of a Target Date Fund. This is accomplished through your 401(k) Brokerage Window or your IRA.  The comparison is compelling.  Less fees, proven performance, less risk…what are you waiting for!  Screen Shot 2013-07-30 at 5.00.16 AM

The green line is a core Balanced Fund (PRWCX) researched by Not On My Nickel. It has proven performance, lower fees and less risk compared to the State Farm 2030 Life Path NLHAX, represented by the Blue Line and TIAA Cref (TCLNX), red line, Target Date 2030 Fund or TIAA Cref 2030 Index Fund (TLHIX), purple line.

The State Farm Target Date has an Expense Ratio of 1.6%, Brokers get paid .25% (12b-1) fee each year (!) for selling it to you and you pay the stockbroker or financial planner a 5% load to buy it!

What are you waiting for. Take action and move out of your default option. Remember the power of compounding.  Next week’s Blog will show you how much you are losing in Target Date Funds, such as this State Farm one, designed by BlackRock.