I feel like I am at a point where my savings and income is so high (relative to what I am used to) that it’s almost uncomfortable and I don’t feel capable to manage it. I’m signing up for a financial planner to manage it and help me make a plan so they can help me out. Has anyone else gone through a point where you feel this way? Back when I was making $9 an hour it was easy - I knew exactly where everything should go and what I can and cannot afford. I’m thinking I will be good as long as I listen to my financial planner and maintain transparency with them. Has this been true for you, or did something else help you handle this? I completely get that this sounds like humble bragging and almost icky - sorry. But I grew up poor in America, I am not psychologically used to this and am having some trouble. No one in family to talk to openly. Any tips, resources, stories may be useful. TC 290k
Open an account at vanguard and invest in index funds (VFIAX, VTSAX and similar). Make sure you fully fund retirement (max 401k and backdoor Roth) also investing in index funds. Check out online resources like financial independence subreddit and bogleheads. Financial advisors can be useful but the also generally have high fees and generally are on some sort of commission (idk about what your companies internal plan looks like). Also for some specific advice, never buy an annuity and never buy whole life insurance
@rbtrnndsnw My 2 cents ...... do talk to financial planner for ideas/suggestions ..... but I would advise to invest on your own.
How about just for 1 year I will have a planner and then the following year I may be more equipped to do investing on my own, probably. I’m only 28 so any mistakes I make early are very costly. It’s too hard for me right now flying solo on this.
See my other post ....... you don’t need to fly solo. Use Morningstar discuss forums (portfolio design forum) ..... professional and career investors will provide feedback on your strategy ........ also, once you have invested and have a plan ........ then have a session with Financial planner.
I recommend a plan similar to this... 1) pay off any credit card or other high interest debt if you have it 2) build a nice 3-6 month emergency fund, use gross income not expenses 3) put some cash aside for purchases intended in the next year (new phone, car, etc) 4) max your 401k match, then Roth IRA (backdoor), then 401k in total. Usually index funds are recommended here 5) if you have kids hit up a 529 6) HSA max if you have it (acts as best tax advantage inv account) 7) take what’s left and put it into your brokerage of choice (recommend: fidelity, vanguard, Schwab) and do a basic split into index funds 8) ignore looking at your money, and pre-plan all your expenses and save the money in advance to avoid touching your savings/investments 9) retire and live awesome
Great summary! Here’s the next level: https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy
Thanks, I agree with this list. #7 I also agree with but is the one that I have some trouble with. Emotions get in the way. For example, attachment to tech stocks.
Many posts today asking for financial advice. Lookup Dogecoin. You can't go wrong with that.
You make less than you think. Start here to educate yourself on financial literacy. It will help to understand the function of money, budgeting, short and long term planning. Easy and excellently presented https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy
What do you mean I make less than I think? My first reaction is to be defensive because I have a pretty good idea of total saving post tax and post expense. But I’m reality, perhaps there is something more to learn from your statement. My other assets are $$ saved so far and earning potential in the future, need to plan for this too
I suspected that you’re pretty young, unmarried, no kids, Bay Area resident. I make more than you and my choices with three kids in the Bay Area are all well thought-out, after being stupid and living “the big life” in my early 30s. Without discipline, I’d do a disservice to my family. When I look left and right, I see people making a lot of money but burning through it and having high debt. They do that because they adjusted their lifestyle beyond their income level. All of them have advanced degrees. Just a kind word of warning, didn’t want you to become defensive. I should have worded more carefully, my apologies!
Bogleheads! Or this - https://forum.mrmoneymustache.com/investor-alley/investment-order/
For easy, stressfree investment (that outperform 90% of financial planners) - Go with simple three fund portfolio or lazy portfolios (look them up). Read - “a random walk down Wall Street” ......or https://www.bogleheads.org/wiki/Getting_started
so you invest all of your $$ (after retirement) into the 3 fund portfolio? This seems like the right approach but I don’t have time to research enough to validate it
You are young and it’s ok to make mistakes. My issue with financial adviser/robo adviser investing your money is - they try to lock you in ........ e.g. even though you realize your portfolio choices are bad (or you are paying too much commissions) ..... since money has appreciated after few years ..... pulling out will have tax penalties. E.g. Wealthfront direct indexing is prime example. Most financial advisers do the same
Managing wealth can be deeply overwhelming and a financial planner can help you feel more confident, but imo paying for an advisor to manage your assets is rarely worth the cost especially in the $$ range you’re dealing with, i.e. you’ve got enough money that it’s worth being thoughtful about how it’s managed, but not enough that it really is beyond your ability to manage yourself. For me the way I dealt with how overwhelmed I was feeling was opening an account with a robo advisor. Once I had the account I saw that it was actually just a really simple programming problem, I saw ways to optimize it, and started to I felt confident tackling it myself. I did some reading, wrote some of my own scripts, and now I manage it on my own and save myself a lot of money in fees. You might consider seeing if you can find a fee only advisor (there are definitely ones that charge like $500 not the $5k you mentioned above!), one that will have a meeting with you and help you set up a plan, but I think you’ll find you can build the confidence to manage your assets yourself! You figured out how to go from $9/hr to $290k/yr, believe in your ability to learn wealth management too!
Thanks for the reply. Yes “overwhelm” is the perfect term to describe what I am feeling - that is exactly it. It is a lot, the 1% fee. I’m not planning to do this my whole life, just 1-3 years max. Still a bad idea? I could consider robo again for part of my portfolio. Might not be a bad idea. This person can also be fee only but the fee is $5k. I haven’t saved $500k in non-retirement accounts yet so it’s cheaper to do 1% of non retirement accounts. I don’t think I’m going to find the confidence anytime soon. Hopefully in 2-3 years. I have a diagnosed anxiety issue that needs to be considered, since money management isn’t just math but also an emotion-problem.
Idk that I’d feel like it’s an actively bad idea to sign on with an advisor for a couple of years, that was my first instinct, but I am glad that I personally decided to not sign up with an advisor and just wrestle thru the emotion+math problem. It really is one that I think you’ll find you’re capable tackling (even with professional advisor help) for way way way less than 1% of your assets under management/yr. Try tossing $5k in a robo advisor. Schwab’s is decent and they’re very simple accounts to open and close. I started there and ended up moving my assets out to Ally because they’ve got a better interest rate on savings and an API that I like.
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Employers usually have some provided free financial planning. You could start there. Worst case put it in ST CDs. Don't start throwing under the mattress.