There was an outfit advertising on the front page the other day and it reminded me that I was interested in seeing about getting someone to help me make better use of my income. I throw plenty of dollars at the stock market, but honestly have neither the time nor the inclination to git gud at the tax side of things.
Has anybody used any services like this that they’d recommend?
Fidelity manipulates and fine tunes my stuff - there’s a fee but for what I’ve made since they started doing that (did that after I got laid off and was no longer contributing to my big retirement funds), it’s all been totally worth it. Also, nothing like Vanguard mutual funds. They are the best.
The best wealth management is first having one years salary in a readily accessible savings account and second max out any 401k you have available or max out your IRA until you have at least $500,000, preferably much more you need to manage. Then and only then investigate any wealth management service remembering the first wealth they want to manage is theirs.
Agree with this too… if you can, ON TOP of maxing out your 401K and possible an IRA or Roth IRA start stashing money in a Vanguard account. Do you research. BUT - once you get to that point and have a bunch of 401k’s sitting around from former companies, I’ve found Fidelities wealth management bunch to be top notch. The fact that they are worried about their wealth before yours works in your favor - they take a percentage in your gains…
Fidelity is good. I’d also say check out bogleheads site. It’s an education and entertaining also for relatively new investors. One can join and ask questions. Then do your own research.
Well, for my own part, I’ve been maxing out my 401k and IRA every year for a while now, mostly in Vanguard mutual funds - both accounts are with Vanguard. “VOO and chill” for the most part. Between the 401k, IRAs and company-funded MPP, I’ve got right around $500k.
I’ve additionally got a Fidelity brokerage account I’m throwing money at on top of that for more speculative stuff, casting a fairly wide net to maybe get lucky on “the next Amazon/Nvidia/Etc.” But of course this means I snag a few duds, which I could probably take advantage of tax loss harvesting on.
My only debt right now is the mortgage (<3% interest) which I’m going to let ride, and the solar panels (6% interest) that I’ll have paid off by next year.
As far as “do your own research” goes - this thread is one part of that research ;p
That’s about as good as it gets! You can write off your mortgage interest so that’s a plus. Don’t know how old you are though? If you can take the risk look in to A LITTLE BIT of crypto currency - it’s fun, bounces around alot unpredictably, no one really knows exactly what any of them are…and it’s a bit like gambling but it may be worth throwing a bit in to that particular pot if you really do some research (I can’t tell you what the best ones are except there are some that you can stake and make just a little bit of money for free) - as soon as that grows a bit, take out your initial investment and now you are playing with house money (cuz it’s all a bit like gambling)…
I don’t use a wealth management service or pay a broker. If I was lazy, wanted such things but didn’t want to pay a fee, I would consider Target Date Investments? Also, if you like managing your own investments but your spouse is not into it, it’s not a bad idea to give a piece of your portfolio to a manager to get your spouse comfortable with the firm & to build/lose trust. I haven’t done that yet but I keep telling myself I should. I use Fidelity, American Funds, Scwabb, Prudential (PGIM), Robinhood & Investco and the idea of having it all under one app sounds appealing & scary at the same time.
I was recently connected with a financial advisor on linkedin who said his specialty is working with mariners. One thing he mentioned is that he works out strategies for property management, which leads me to ask a spin off question, how many of you are investing in real estate, and do you have difficulty managing them when youre away at work? I have been looking into sone turnkey companies lately and trying to decide if its worth it for the small yields that come from being truly passive.
Best thing my husband and I ever did financially was to fix up a townhome and rent it out. We use a property management co to deal with everything, and while they irritate me alot and will surely fee you to death, that thing pays for itself AND the mortgage payment on the house. All those fees the property management charge are tax deductible. It took some guts to do this but it’s paying off now. Being away isn’t an issue if you are willing to deal with a property management co. Mine runs on the motto “hands free ownership”. That’s all well and good, but it means things like $350 to tighten a faucet. To avoid that kind of stuff, we opted to have them call us before they contract a plumber or etc. and fix it ourself when we can. It’s awesome.
If you dont mind me asking, how much did you put down on it before financing? I was running some numbers with sone turnkey companies and figured I’d need to put down at least 30-35% for it to be worth it, does that track with your experience?
Well, we found a place that was relatively cheap for our area, and both my hubby and I sold homes that left us with quite a bit of cash to make a pretty hard core down payment. Then we lived in it while we updated it/finished the basement/etc. Our goal, when we started, was to make it pay for itself at first. So do the math/use a mortgage calculator - see what you need to put down to pay for itself and then some. We then used most of the rent to pay on the rental property, and some to pay to the house that we moved in to soften the blow of a rather large-ish mortgage payment. Worked out really well. At the years have gone by, the rents in our area increased (ALOT) - but we kept the rent increases relatively low - so that enabled us to make larger payments on our home…and refi (pulled out some savings as well that we had) to lower our home payment to the point where the rent paid for both our rental and home mortgages. But initially, because we were willing to move in to a town home that needed some updating and had a pretty small mortgage, we were able to update quite a bit ourselves, build up equity rapidly, and be able to qualify for a loan for a second home.
I have a guy at Merrill Lynch that I’ve used for years. He’s not very expensive, and he’s done great things for me. Is it costing me money? Yes, but I’m doing much better than I would be by myself.
Sometimes it just pays to have a guy.
In these uncertain times it probably does pay to have a professional manager if you have enough in savings and enough investments to manage. Personally I am avoiding any real estate purchases right now as prices are above the bubble territory of 2008 but any purchases made up until about 2019 should put one in good shape as long as one can keep them occupied. There will be some excellent opportunities coming up for those that have the cash. There are surprising ways for mariners to make money with our schedule. A friend of mine and myself had coin operated car washes which did well by us and we could maintain with our opposite schedules.
Below is a quote from me from a thread titled “Get Rich Realistically” from Nov 2019. It was a reply to @exdraggerman asking a question very similar to yours. A few months later he said he bought an investment property, was looking for another but COVID hit shortly after so who knows what happened? Even though the markets, cost basis & economies have changed since 2002, 2007, 2019 & 2020, my advice & opinions are the same. Instead of me retyping it out I just copied & pasted from 2019. Be brave, find mentors who have done it & good luck.
From 2019:
When one of my real estate mentors started in the real estate market in '01-'02 myself & his others coworkers were naysayers & told him if it was that easy everyone would be doing it. To his face & behind his back all his crew said he was going to lose his ass with his crazy scheme. We were wrong. He was up to 30 properties but lost more than half during his divorce. In 2007 when my wife & I got into buying foreclosures my shipmates told me exactly the same thing, that I was dreaming & wasting my time & money. We were up to 10 properties but sold one recently. No regrets at all concerning investing in real estate.
Since you asked, below are a few observations & advice from a mariner who invests in real estate
#2 Get as many mentors that you can. From my experience, people who invest in real estate love talking about it & sharing what they learned.
#3. Realize before hand that you are buying a job. The more work you put into it the more you earn. But its a real chore. Too much work sometimes.
#4. Realize that there’s no 2 investors who do it exactly the same way. I have 4 mentors who all made tons of money & all of them have completely different business models & my model is different than all of theirs.
#5. Read the book, “Building Wealth One House At A Time”. After our 3rd purchase I figured I should get some book knowledge & read about a dozen real estate books. This book was the best IMO.
#6. IMO, it’s really not worth it if you only have 1-2 investment properties. Taking care of 1 is the same amount of work as taking care of 2 & taking care of 2 is the same amount of work as taking care of 4. Don’t waste your time with 1.
#7. Spending more to purchase doesn’t mean a higher rate of return. When we started investing we could of bought $100k homes & charged $1,000 a month in rent. Instead we purchased $25k - $40k homes & charged $750 a month rent. Those $100k homes in 2008 are now worth $200k & those $25k- $40k home are now worth +$100k. You do the math.
#8. Do as much work as you possibly can. Think of the work that you do yourself as money earned. If you paint a room, you earned $200. If you pressure wash a house, you earned $250. Etc, Etc. Not bad money to earn on your off time.
I saved #1 for last.
#1. Have a spouse who is willing to or willing to learn how to take care of business while you are at work. You will not be able to successfully manage property from the ship for any amount of time. Never tell a tenant or a contractor no one is in town to take care of it. Property Managers will ensure you only earn enough to break even if you are lucky & relatives will screw you over no matter how much you love them or how generous you think you are. Only trust your spouse. They have to be on board because they will do at least 1/2 of the work.
I can go forever but won’t. Check out the book I mentioned. Its full of tips
Great insight, Im going to pick up that book right away. 
Am about as ignorant an amateur as most who don’t invest for a living, but realize that the large wire house money managers as M Lynch and Wells Fargo are not modeled for max gains for individual investors. Having investments in Mutual Funds in a Non-Retirement/ Brokerage account is maximizing phantom taxes out of your control due to internal churn; death by fees and taxes. They are OK in IRAs/ 401Ks because those are deferred vehicles. The key is establishing cash flow without liquidating principle by maxing dividends and interest when approaching the end of your working life. Take a major share from high tech growth to large cap value dividend producers, is what I have found makes sense. Management fees should be between 1.0-1.5% and no higher. That should include all fees, which would exclude most mutual funds, Think ETFs instead.
I would go further than that. The key is to do what you said but 3 years BEFORE the end of your working life. So when you stop getting a paycheck you are living off of interest & dividends from 3 years previous. Then when the economy & markets shit the bed you’re not dependent on the interest & dividends from the down market and have 3 years to make adjustments. If God forbid you do have to liquidate a tiny piece of the principle, it’s 3 years down the road hopefully after the economy/markets have recovered? At least that’s our plan.
I would go further than that if you live in the USA. If you don’t have a years salary in checking or savings account you should not even consider investing. Assuming you have that covered and have made what you consider wise investments you need to determine what you want your income to be when you retire at whatever age that may be. If you have no government mandated or union pension and are say 60 years old you need about 1.5 million dollars invested to provide you with enough income to provide you with $60,000/yr income at a 4% return. Assuming all your debts are paid that is not much since you will have to buy health insurance, pay property tax, insurance etc. Of course if you make less than $100,000/ year this is means you will have to work longer to accumulate this amount if you have a family, likely until you are 70 which will be to your advantage as this allows you to make any amount of money without your social security being reduced, at least for now.
Of course it is a different matter for those in more developed countries who do not have to worry about health insurance.