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Escape From Wall Street | Ep 182

Rick Ferri, host of the Boglehead podcast, joins the show to talk about investing during these unprecedented times.

Rick’s Story

Rick Ferri got into finance after leaving the military to spend more time with his family. He became a Chartered Financial Analyst (CFA) in three years and then got his Masters in Finance.

As he dove into learning more and more about investing and stock picking he realized that most people don’t outperform the market. He realized that the sales pitches from investment firms are simply untrue. They don’t have any specialized knowledge and they can’t outperform the market.

He was considering leaving the industry all together when he heard Jack Bogle speak. He was amazed to hear that someone else felt the same way about the industry as he did. So he bought Bogle’s book, Bogle On Mutual Funds.  He agreed with what he was reading–that the financial industry is a lot of smoke and mirrors, and that index funds are really the best way to invest.

He started his own firm in 1999 focusing on low-cost investments. He charged .25% to his clients and invested their money in low-cost index funds. He believes that the best investments are to buy “the market” because the fees are low and you get a better rate of return.

He also believes “financial planning” is different than ” investment management”. Investment planning is discussion about the portfolio, setting an asset allocation, creating a portfolio and implementing and managing it. This can be charged as an assets under management fee (AUM).

Finanical planning goes much deeper and includes topics outside of your investments such as insurance or life goals. This should be charged as an hourly fee or a fixed fee.

Connect With Rick

Check out his website rickferri.com

Listen to his Boglehead Podcast

On Twitter at @rick_ferri

He is also active at bogleheads.org

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