• I help tech employees/entrepreneurs manage their money • Have worked in wealth management in SV & SF for 10+ years • Our firm manages ~$4B and I head our San Francisco office. I'm also helping to build BrightPlan (digital wealth management solution) & teach personal finance at UC Berkeley Extension EDIT: Thanks for the love everyone. I'll leave with one of my favorite podcasts of all time on money. Seems like many in the community would appreciate the topics discussed here: https://podcasts.apple.com/us/podcast/morgan-housel-the-psychology-of-money/id1241946146?i=1000439082944 Disclaimer: My responses are for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own investment, tax, legal and accounting advisors.
What do you guys do when the wealth declines due to bad investments
If it's a bad investment I would recommend getting out of it whether it is up or down. If it's a good investment that is down due to market volatility, that's perfectly normal and I would discourage the investor to take any action. In fact, in might be a good time to buy more at a discount.
I think they said it right. Discourage to take action = encourage not to take action. No?
What’s the median personal (not household) net worth of your clients?
It varies widely, but on average $3M - $25M. There are some with less and some with a lot more, but most fall within this range.
That's neither a median nor average. More like a 6 sigma limit 🤦♂️
Any advice for people who just started their career? How should they plan their spending/saving?
Save as much as you can, spend as little as you can. Put savings in vtsax. Forget about it.
Solid advice. But be balanced. Enjoy your 20's because you only get it once. There is no point in saving millions that you can't even spend later. If Warren Buffet gave you a chance to take his place, if he could take your place, would you do it? I've never heard a yes answer to this question. I've had older clients that have a lot saved and always dreamt of traveling later in life. But once they are retired, they realize they can't travel because they can't walk as much, or their body is too frail, etc. There are a lot of tools available now that let you automate your savings. Create a structure so that you don't have to make a decision to save each time. Be frugal but not cheap. Offer to pay for the meal next time you're out with your parents.
Can you hire me
how much $ do you have to work with a wealth manager? (when is it good time to get one?)
I would say complexity matters more than wealth in many cases. A single person with no dependents with $10M may be somewhat of a simple situation, where someone with $500k with children, parents, and additional complexity could really benefit from working with an advisor. The problem is that advisors (good ones) can usually only work with maybe 50 - 100 families, so it will be hard to work with an advisor with a low net worth (translates to cannot pay our fees). The good news is that fintech is making what used to be only accessible for high net worth individuals to the mass affluent. Many companies are also starting to recognize the importance of providing financial wellness benefits. It's cheaper for the company to pay for an advisor to help get an employee's finances in control than to pay them a higher salary for example. I think having dependents, whether that is kids, a spouse, or parents, that start to rely on your income is where many people start seeking an advisor to get more serious and make sure they're not making any mistakes.
I am paying too much in San Francisco property tax and cannot deduct it on Schedule A anymore. What should I do?
That new tax law really crushed homeowners in California, NY and other states with high state tax. I would try talking to an accountant to see if there is any way in your personal situation that allows you to reduce taxable income in someway. No one can predict what's going to happen next year, but tax laws could change quite a bit more in 2020 or 2021 depending on who gets elected. Brace yourself.
My job is here and not worth quitting just to move away for lower tax (TC 425K). But I could downsize now, downsize before or after future retirement, accept a far-longer commute, switch to renting, or ...? There seems to be no good option but the status quo. Ideas?
If you are risk-averse but okay for long-term investment, what are some ways you can invest your money?
It sounds like the long-term nature of your investment horizon affords you risk capacity, but you have limited risk tolerance. Long-term investors typically do well by investing in something risky... but risk-averse investors often bail out (sell everything) as soon as the market takes a dip. And the market takes a lot of dips - the average is a 14% decline every year. In general, I've found that individuals like you find comfort in having a year or two years of expenses you need in cash. That seems to provide some reassurance that you will not go broke. The other important thing to consider is to have enough investments in stock so you're not wasting your risk capacity, but enough in safe assets (such as cash or bonds) so that your portfolio value is not fluctuating up and down as much as the stock market. It's also important once you put in your head that it is natural for the stock market to go up and down, but that over the long-run, they have always provided a positive return. *This is where compliance will ask me to note that past performance is not an indication of future returns.
Do you recommend buying uber stocks?
It's hard to recommend a particular stock without knowing the context of your financial situation. In general, is it okay to invest a little for fun? Sure, it's fun to track and it should be a good learning experience. Would I bet my entire net worth or any meaningful amount in one stock? Probably not.
This is the answer for is it ok to gamble. Sure with a little money just for fun
Tc?
I won't give you my personal TC since it's easy to identify me. I can say that typically... the more $ you manage, the higher your TC. You can get a fairly good estimate of TC of an advisor by following these formulas: https://www.investmentnews.com/article/20190504/FREE/190509978/a-new-pay-model-300-advisers-move-and-the-entire-industry-feels-the