Hi all! Tried to keep this short, but the details are important.
I am new to investing - new as in I know next to nothing, and am only partway through the PFC course. I contribute more than the max to my company 401k and that’s as much as I have ever done, investment-wise. Literally, I know nothing.
My mom, who is 66 and just retired from an accounting/financial mgt of a small non-profit position, and who is independent and very smart but who I am concerned is starting to show a few signs of early dementia (can’t remember she told me a very in-depth story the day prior and tells me all over again, relays things to me that happened when I was there with her, etc), was left in a good financial position by my father when he passed five years ago. Although she’s an accountant, he was an engineer and he was the financial mastermind between the two of them, so he managed their investments.
After he passed, she researched three financial management companies and hired one to assess her situation. They did, and set her up in a way to ensure that she will have access to her money when needed, but it’s still in accounts that’s accruing interest, and she’ll get maximum social security (as in, they talked about when she should retire to get the most out of it), plus they talked about putting her house and other assets in trust so if she gets sick, she doesn’t lose her shirt to medical bills. Overall, it seemed like they did a pretty good job for her.
Yesterday, she tells me that she and two friends (both of whom are a little nutty - nice, but extreme religious zealots/almost cult-like in their religion, very extreme in a lot of their behaviors) are planning on going to a ‘conference’ in Scottsdale, AZ in a couple months to attend a financial planning seminar put on by some guy who has his own ‘method’ of investing based on looking at the last 8 years of market trends and then picking what you should invest in from those trends. She said he does things differently than everyone else “just like how Dave Ramsey does the snowball method to pay off debt, but it works!” and that “so many people have done so well using his method!”
I told her that to me, it sounds like a scheme and that anyone who needs to sell tickets to a conference is making their money that way, so they can tell you anything and then throw in the old disclaimer and if you lose your money, it’s not their fault. I also told her that if the last 8 years were an indication of what the next few years will do, then everyone would do it that way, but she didn’t seem to agree. I asked her why she even wanted to make a change in her portfolio considering she hired a reputable advisor who had done a good job for her, she doesn’t have any financial needs, and she’s set until she dies even if she lives to 100, and she said that she’s only making 8% return and she thinks she should be getting more like 10-12% so she wants to move her money from her index fund to something more aggressive. My response was that the one and ONLY thing I know about finances is that you NEVER get more aggressive with your money as you age; you start out aggressive when you’re young and you get more conservative as you get older.
She was not amused by my objections and refused to discuss the topic further. She wouldn’t give me the guy’s name so I could look him up, and I can’t find any information on any financial planners holding conferences in Arizona except Mark Matson, who to me seems like a scammer (or at least is charging fees that are way too high).
My fear is that she’s going to go to this convention with her two nutty friends, get totally swayed by whatever persuasive tactics they have, and immediately sign over her money, then lose her shirt.
I’m hoping that by posting here, either a) someone will be familiar with whoever this person in Arizona is and will know if they’re legit or a scammer, b) someone can give me a few more pieces of ‘standard’ advice that I can use the next time I talk to her about this to try to convince her to think about it a little more clearly (by that I mean, common knowledge stuff like ‘you don’t get more aggressive as you get older’), or c) other people who know more than me can help set my mind at ease. I feel like I’m at a huge disadvantage in trying to talk her out of this since she’s the accountant and I’m not someone who knows much about investing. Or maybe she’s right and I truly don’t understand - but based on what I’ve learned from Jeremy’s course and what little knowledge I had before, all my alarm bells are going off and my gut is screaming that something is very wrong.
I do plan to tell her to run this brilliant idea past her current financial advisor, my uncle (my dad’s brother) who is also an engineer and extremely good with money, and my cousin who is a financial advisor to get opinions other than mine.
Anyway, thank you from the bottom of my heart for reading my essay and for any advice you may have. She’s an incredible, selfless human being and the thought of her losing everything is just heartbreaking. Of course, she could come live with me, but since I’m not at a point where I even have a 1-month emergency fund set up and I don’t even have 100k in my retirement account at 40, I have no idea how I would take care of her financially so I want to protect her money at all costs. She doesn’t deserve to be destitute.
