Probably. If your 401k has good choices and low fees, you could also do 401k fully before Roth IRA. Other options are do an HSA after the 401k match part, especially if your company does some matching like mine does, then IRA, then the rest of 401k. Here's a good summary: Here is a general account funding priority that often works well for many people (not all points will apply to everyone): Establish an Emergency fund to your satisfaction. Contribute to the work-based plan (401(k), 403b,) enough to get the full employer match (the match is like free money, your best possible investment), Pay off high interest debt (a guaranteed high return, the next best thing to free money), Contribute to a Health Savings Account (HSA) if available (unlike many other tax deductions, there are no income restrictions to contribute to an HSA),[1][note 1] Contribute the maximum to an IRA, traditional or Roth (or backdoor Roth technique[note 2]), depending on eligibility and personal circumstances, Contribute the remainder of the maximum employee contribution to the work-based plan, including an After-tax 401(k) if available, Contribute to a taxable investing account, Contribute to non-deductible IRAs (may be better than taxable in certain circumstances) or annuities. If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA. An investor's tax bracket may influence the decision as well: those in higher tax brackets should consider higher contributions to a tax-deferred plan (e.g. traditional 401(k) or IRA) rather than a post-tax plan (e.g. Roth 401(k) or IRA); see Traditional versus Roth for more guidance.
I just went through this process and I had a certain question I posed to every FA as a sort of a litmus test of their sophistication and risk tolerance. I believe you generally want to stay away from FAs hawking insurance products, but at a minimum you should ask them to explain to you the technical details of how the product works. If they can't explain it (many can't), then stay away. I also only spoke to "investment advisers" that were essentially fiduciaries. Best of luck. Interviewing FAs was a surprisingly exhausting process of going through the same spiel multiple times.
Anyone know what's driving the increase on KOPN (Kopin). Last big press release on them was on the 9th.
I will continue to purchase ETFs and index funds with my salary and retirement accounts, but the financial adviser will primarily oversee an unexpected inheritance. I know myself (see penny stock thread) and my track record with investing, and to me paying a professional seems worthwhile at this stage in my life. Not to mention I just got married and having a third party discuss financial matters with my wife and I will be more productive than me doing it myself because my wife hates discussing finances. I posted about it ITT a few months ago, but the question I used as a litmus test was to see how receptive the FA was to securitizing the inherited portfolio and investing it in a way so as to generate income that I can use to pay off my student loan debt (as opposed to selling assets and paying it off). That way, in ~5 years, I'll still have the underlying assets and will no longer have the debt. Every FA I spoke with had a different response and answer, so it allowed me to kind of feel them out based on those responses.
Thanks...forgot in my original post to mention my HSA. Forgot I fired that up this year as well. I’m putting ~ 500 to 700 a month into student loans right now just because I’m tired of those things still lingering around, so within the next couple of years that hopefully will open up some additional funds to invest.
I'm thinking about buying more into fbhs. They've recovered from their April low nicely and seem like they're in place to continue to have good numbers across their sections, give or take lower masterlock sales In the next month or two.
Up pretty well on some Slack calls this AM. A lot of the larger funds have started buying back into it so the inclination is that it found its bottom for the short-term.
Thought I was going to get a nice bump on the PFE I bought a couple weeks ago. I guess contract news with the UK isn’t as exciting about “positive” reports on Phase 2 of 7 for pending vaccines lol
The transfer is still in process and he doesn't have custody yet. There are multiple banks/custodians involved, and they are all incredibly slow. COVID has exacerbated it due to the need for notarized documents, as well. Edit: We've discussed taking out a line of credit to essentially refinance the student loans, and investing conservatively in order to avoid margin calls. Because I'm not paying him any fees yet, I told him to pump the brakes and we can wait until he is earning a fee before diving into the details.
VTI is up 0.07% YTD. Yes I know all the funds and equities are fucked up YTD and YTD is not a great metric. Although the tech heavy funds have done well. Nasdaq up 17.35% YTD. Very volatile with tech though.
I’m an advisor myself. If an advisor is pushing perm insurance as one of his main strategies to you before maxing out all other options run. Depending on how you are compensated you should be A (w2) maxing out your 401k/ check if you can do voluntary after tax contributions to get upwards of $50k into the plan then back door a conversion into a Roth or B (1099) opening a owner k or SEP IRA plan to contribute $50K plus. Only then would a LIRP insurance plan be an option if you are tax sensitive, opening a taxable account and focusing on tax efficient investments like munis and individual equities/etfs would be an alternative strategy if you are fee adverse. Paying down loans if your debt is 5%+ interest should also be a priority. Two huge red flags for advisors are if they push high commission products or push you to invest/contribute as much money as possible even if that is not in your best interest, means they are in it for themselves more than for you.
Take advantage of any match you get first then I would look to HSA/Roth but I would push Roth. Important to get money into a Roth while you can before you get to a point where you are above income limits. With changes from Secure Act Roth’s are even more important as a legacy tool. The new rules on a ten year cap on withdrawals by your beneficiaries makes a 401k/trad ira a shitty vehicle for passing on wealth. Take the tax hit now then you and your children will get a dollar on a dollar rather than .70$ on the dollar later on.
went through this a few years ago whitecoatinvestor is a great baseline set in the "get rid of debt over 4-5% first, max 401k, backdoor roth, kids college funds, taxable account" type hierarchy making on the literal investing part I found using a robo advisor for the first few years the best as it helped me learn while having really low fees and invested in really low expense ratio funds. then when i was comfortable i moved everything to vanguard to shed everything but the expense ratios. imo I'd point the soon to be wife towards betterment. she can text with a financial advisor under the base plan, if she wants to talk to one on the phone the next plan still has reasonable fees with good expense ratio funds and can always move back down to the base when she gets comfortable with your plan. as a high income person (i don't remember which kind of physician you are but regardless) the long term investing plan is easily the best vs the more volatile day trading/active investing path. the % you lose to active FA's is unlikely to be made up in returns over your life span. I've been dealing with a bunch of FA actions by helping my parents and another family member straighten out their finances as they enter retirement, the amount of money they've lost due to making just small mistakes with these folks is pretty enormous.
maybe every ones finances i've gone through just happened to pick bad advisors but you can easily pick out where they got taken advantage of even if its just on the margins. i've just yet to be convinced the benefit they provide ever outweighs the cost and the risk of it being a net negative is far too high for my liking. i'm a conservative investor though, don't need to hit homeruns just let me hit doubles for 30-40 years.
All great answers in here. In my professional opinion, run like hell from any FA that pushes any type of life insurance as an investment. A fun question to ask when interviewing or working with an FA is how much money they're going to make on a given product/investment vehicle. Tends to make the permanent insurance guys feel a little awkward.
Care to provide some examples? Just curious. FWIW in going through my relatives' investment accounts over the last few months I completely agree that paying a % of AUM has been an astounding waste of money for them. To the point where I have questioned whether there is some sort of law or contract being broken/breached.
i've gone through a bunch of the proposals my parents have been given for example and they build in their own or certain funds that have insane expense ratios, like 1%+ just things your normal person may miss because weird they only reference their fee as being industry average at .5-1% but you have to dig to find the expense ratios of the funds they push before even getting into weird annuities or whole life policies or more overtly bad for consumer options
Completely agree and I'm not knocking a % of AUM. What I meant was that it appears some of my relatives have basically been taken advantage of, and they are paying an annual % of AUM on accounts that haven't had a trade in 3-6 years.
Ah, I see. Yes, it's basically the opposite of the commission issue where brokers traded too much. With AUM they can ignore it too much when reality is there should be some movement in portfolios, esp in Feb and Mar this year.
Of course the other issue is whether they are just managing the portfolio or are they doing other things to help?
There was a guy here in Omaha (since shut down) that ran his own MF with an expense ratio >2%. He would then purchase that fund in clients' wrap accounts where he was collecting an annual percent fee. I would also recommend looking up both the individual advisor as well as the advisory firm via this website: https://adviserinfo.sec.gov/
Ask the FA what he/she does with his/her own money, specific allocations, and returns over the last 1/3/5/10 years? They’re asking for your money. Have them show you what they’ve done with their own.
there are definitely bad actively managed funds but I would challenge the idea that they provide no value. You don’t want a large cap blend mutual fund when you can just buy an s&p index but in growth categories or micro cap or international there are absolutely funds that create alpha even when taking into account cost. The hard part is sifting through the garbage. Two most important screeners I use are 1- is the fund in the bottom 25% in fees vs it’s category and 2 - does the manager invest at least a million of his own money into the fund he manages. I agree to stay away from advisors who push proprietary products.
TSLA up another 10% today. A $3500 October 16 call will now set you back $5K. That price would give them a $600B market cap and make them I think #7 in the world.
earnings Wednesday after the bell my bet would be that it posts a profit, it pops up 10%+ after hours, and then on Thursday it closes red. not sure if i'm going to pull the trigger
i dont really disagree with anything here but i still can never quite decide if the value they provide outpaces the fees as benchmarked against just a broadly invested portfolio with basically just vanguard products that uncertainty combined with the risk of NOT making a correct decision of FA, or that FA shifting to being a bad one, etc is where i end up but I think at this point my case is made so won't clog the thread up more
My biggest bumble to date was that action and I'll never touch TSLA again as a result. I learned a lot about options as a result. For the thread's entertainment, and whatever expense you're funding off of a single day trades, here's hoping a big W for ya.
Hi yes if the NASDAQ would like to go up 2.5% every day for the next 3 weeks so I could retire that would be great.
Thoughts on Vanguard US Growth Fund VWUSX?? Up 30% YTD, 17.72 over 10 years. I guess you'd be exposed to all equity in it but has a strong track record. 0.39% expense ratio.
Also I just compared vanguard growth funds to fidelity funds and fidelity almost always has a much higher expense ratio. Why would anyone use fidelity then? Is it because fidelity doesn't have a minimum to invest and vanguard is $3000?
All depends on who the fund manager is, how active they are and what the overall goal for the fund is. Fidelity also has 0 expense ratio funds. Vanguard Growth Funds if they have a significantly smaller expense ratio are likely more passive funds. If you want us to help you pick some funds we’re going to need a lot more information. What is your current assent allocation? What asset allocation do you want? The current money you’re looking to invest, what is your timeline for it. Are you looking to save up for something short term or long term like retirement? Just funny money to gamble in individual stocks and options? What kind of account are you putting it in? 401k? IRA? 529? Taxable? I know you like to read, I posted some good investing literature in a response to one of your posts a few pages backs. Happy to help but can’t just recommend a fund in a bubble. Like Lyrtch said picking a fund based on YTD and past performance is always a bad idea. Past performance is never a guarantee of future results.
PM Sent. Wasn't comfortable posting all the details. But I will go back and read the book you recommended.