Choosing an AFP

Chile Investment, how to invest in Chile, what to watch out for when investing, economic issues, currency exchange in Chile, and more.
User avatar
admin
Site Admin
Posts: 24182
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Choosing an AFP

Post by admin » Wed Mar 28, 2018 4:21 pm

https://www.df.cl/noticias/empresas/ban ... 14907.html

Its the commisions, stupid!!!

Dug in to one of the u.s. mutuel funds offered by a chilean bank a while back. They were charging like a 5% commision. Found out the con artist were just buying the u.s. vanguarde funds with like a 0.30 to 0.50% commision. It took me a good 4 hours of digging to find that out.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 24182
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Choosing an AFP

Post by admin » Thu Mar 29, 2018 8:25 am

Here were the average returns this month for the afp funds by risk catagory. It was a crappy month for the markets overall.

http://www.pulso.cl/trader/fondo-pierde ... mundiales/

Given the tiny spread between the A fund and the E fund
, unless you are 80 years old i really see no reason to invest in anything but the A fund since you are being forced to choose.

Of course, i dont believe depending on any goverment scheam for retirment is ap good investment. If i see anything from it someday, wonderful; otherwise i just consider it another tax.

The history of all goverment retirment scheames says, most get wiped out as politicians can never keep their hands off the cookie jar. Why i am very, very against the bullshit the left is pushing to create a goverment run afp.

They need to modernize of the current afp system, but otherwise keep the goverment's hands off. Lower the commissions, implent some of the tax breaks more lke the 401k systems to encourage more savings, etc.

Still, i assume i am on my own when it comes to retirement, and i sure as hell do not want to wait untill i am 65, 70, or dead to cash in on the pyramid scheme of a goverment retirement plan.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

jehturner
Rank: Chile Forum Citizen
Posts: 1502
Joined: Thu Nov 20, 2008 12:24 am
Location: La Serena

Re: Choosing an AFP

Post by jehturner » Fri Mar 30, 2018 5:26 pm

Yeah, just the same as the mutual funds. The business model for equity funds seems to go like this:

* Customer provides some capital.
* Fund invests the money and keeps the (average) profit.
* Fund returns the customer's original capital, plus or minus its variation with volatility.
* Ie. customer assumes the risk, bank assumes the returns.

Who wouldn't want to participate in such a scheme?

mem
Rank: Chile Forum Citizen
Posts: 932
Joined: Tue Nov 24, 2015 11:18 am

Re: Choosing an AFP

Post by mem » Sat Sep 08, 2018 3:50 pm

So to summarize.


Chilean social security/AFP is a joke. The money put into it should be kissed goodbye as a throwaway fee for immigration and alternative to US SS

The only benefit is Chilean AFP/social security is less than US Social Security so with a totalization agreement it can cut your US tax bill

Bottom line: Find the absolute cheapest AFP and who cares if they go belly up later, just find the next cheapest AFP at that time.

thisisreallycomplicated
Rank: Chile Forum Citizen
Posts: 2262
Joined: Sun Aug 07, 2011 6:25 pm
Location: Coquimbo

Re: Choosing an AFP

Post by thisisreallycomplicated » Sat Sep 08, 2018 4:52 pm

mem wrote:
Sat Sep 08, 2018 3:50 pm
So to summarize.


Chilean social security/AFP is a joke. The money put into it should be kissed goodbye as a throwaway fee for immigration and alternative to US SS

The only benefit is Chilean AFP/social security is less than US Social Security so with a totalization agreement it can cut your US tax bill

Bottom line: Find the absolute cheapest AFP and who cares if they go belly up later, just find the next cheapest AFP at that time.
That sounds about right
“Now it’s conspiracy – they’ve made that something that should not even be entertained for a minute, that powerful people might get together and have a plan. Doesn’t happen, you’re a kook, you’re a conspiracy buff!” – George Carlin

User avatar
admin
Site Admin
Posts: 24182
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Choosing an AFP

Post by admin » Sun Sep 09, 2018 8:28 am

mem wrote:
Sat Sep 08, 2018 3:50 pm
So to summarize.


Chilean social security/AFP is a joke. The money put into it should be kissed goodbye as a throwaway fee for immigration and alternative to US SS

The only benefit is Chilean AFP/social security is less than US Social Security so with a totalization agreement it can cut your US tax bill

Bottom line: Find the absolute cheapest AFP and who cares if they go belly up later, just find the next cheapest AFP at that time.

Here is the thing. The chilean AFP system is probably the best mouse trap out there, among a globe full of broken mouse traps.

My beef against the afp system is it could be a lot more efficient, and have better returns. In short, it needs to be modernized. What these idiots earn in commisions should be invested, and their jobs could be replaced by a computer. In fact, i am almost certain most of these afps are being run by computer trading. Not some "expert" giving it deep thought. So why are we paying for a computer algo to do all the work?
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

Duganist
Rank: Chile Forum Tourist
Posts: 6
Joined: Mon Feb 17, 2020 2:26 pm
Location: V Region
Contact:

Re: Choosing an AFP

Post by Duganist » Tue Feb 25, 2020 6:48 pm

Bravo. I really agree on this. I have just revised the notion of starting a derivative brokerage to doing a roboadvisor service that gets low-risk USD risks and cut the costs as low as possible, automate everything, leave custody to individual's segregated accounts. Taking custody and adding overheads, then fees, seems like an ill-spent use of time and the money of others.

This is something I am optimistic will become a generally popular option in the wake of AFP reform after the dust has settled in the political upheaval. As much as there may be pro-social reforms I really don't see Chile becoming Argentina.

Post Reply