Saturday, November 27, 2010

Final Words of Advice

Not mine, but former Wall Street exec Gordon Murray's.

Mr. Murray made a pile at Goldman Sachs, Credit Suisse First Boston and elsewhere, then retired, and then discovered he had terminal cancer.

So he did what anybody would under the circumstances: He wrote a thin book summarizing what he had learned during his thirty-plus years in the investment biz, asking the questions:

Is your financial advisor a fiduciary who really works for you?

What is your percentage mix of stocks, bonds, and cash?

Do you know how your investments are doing and how much risk you are taking?

How much are you really paying in fees and investment-related taxes? ...

It took me twenty years to figure out the hotshot stockbroker to whom I was paying 2% of my assets was losing me money. (If I had dumped everything into an index fund I would have done better; I'm a slow learner.)

But I'm not alone. It took Gordon Murray a quarter-century to understand it's a fool's errand to try to outpace broad market indexes. He had to leave Goldman Sachs and Lehman Brothers for the light to go on.

... Mr. Murray knew little up until that point about basic asset allocation among stocks and bonds and other investments or the failings of active portfolio management .... “It’s American to think that if you’re smart or work hard, then you can beat the markets” ...

The high-rollers at Goldman Sachs had a generous Uncle to save their bloated corporate backsides when they loused up; you and I (sadly) don't have the same luxury. That's why Mr. Murray's little book is useful, and why I traipse around to studios urging artists to tuck money into TAG's 401(k) Plan. It's important to have a savings strategy up and running, because it gives you a financial cushion ... and more options when you hit the proverbial bump on the smooth highway you call your career.

The truth is, investing well and wisely is relatively simple. Just tie a broad-based bond allocation to your age (30% bonds=30 years old) and the rest to equities, both foreign and domestic. The only hard parts are

A) Initiating the program (sooner instead of later) and

B) Sticking with the program.

(If you're a participant in TAG's 401(k) Plan, you can make the investment thingie ridiculously simple for yourself with one-stop shopping via Vanguard Target Date Funds. You can put in $16,500 in 2011; $22,000 if you are fifty or over.)

I'll be doing a raft of 401(k) meetings over the next few weeks. The times and places:

Warner Bros. Animation -- Tues., Nov. 30th -- Building 34R, Main Conference Room -- 10 a.m.

Cartoon Network -- Wed., Dec 1st -- Main Conference Room, 1st floor -- 12 noon.

Nickelodeon -- Thurs., Dec. 2nd -- Main Conference Room -- 10 a.m.

DreamWorks Animation -- Tues., Dec. 7th -- Dining Rooms B & C -- 2 p.m.

Film Roman -- Thurs., Dec. 9th -- "Glass" Conference Room -- 10. a.m.

Walt Disney Animation Studios, Southside Building -- Tues. Dec. 14th -- Room 1300 -- 2 p.m.


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