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Rising Star
You can start with someone from your 401k, I have fidelity and they have advisors
As a recent grad savings doesn’t have to be complicated. Max out your 401k, max out Roth IRA, select a few mutual funds that perform well and one balanced fund that targets retirement year like a fidelity 2050.
Lock in a low interest rate mortgage. Pay off debt.
If there is any left over, invest in a metals fund (silver/gold) and get some crypto (Bitcoin, ether)
Chief
If you’re a recent college grad, then yes I’d say you’re a bit young and won’t get the full benefits from a financial advisor. Also, some of the advisors I know require their clients to make a minimum amount income wise.
I have a financial advisor but that’s due to an unfortunate circumstance (death of a parent). I like my advisor a lot, but if this is something you truly want for yourself, I say go for it in a few years depending on what assets you have, income levels, etc.
Conversation Starter
So sorry for your loss. What’s the recommended income and where do you find good ones? Could learn something from you here.
OP, here’s what I’d say: financial competency varies for all of us, some people are more naturally inclined and others are not. It’s not a good or bad thing, it’s just the way it is. I know a financial advisor that works with young professionals that have strong earning potential and are committed to saving. She grows with her clients and works wonders on them - she’s kind of like a financial coach (but at a legit investment firm) and walks you through whatever you need to know. I can connect you if you’d like. You’d probably want to 100k/year at least I’d think but not sure if there’s a minimum for their firm.
Conversation Starter
Hi, do you mind if I send a DM. Would love to learn more about this.
Rising Star
Someone already mentioned using your 401k provider which is a great suggestion.
things that also helped me - someone with ZERO financial literacy
- find someone in your life who is doing well and ask how they learned. They’ll often recommend a lot of books that are a great basis. I will be honest and say i didn’t read any of them LOL. But those who i know who are doing very well with their investments all recommend the same ones so I’m sure there is something there
- there is a personal finance bowl here that is very helpful for quick hit advice
- i have some friends who hit $1M net worth in retirement before 30 and made sub $100k while doing it. I asked them for help. Not to act as my advisor, but asked them how they budgeted, what types of accounts they recommended, etc.
For example, I learned some tips on how to maximize the money you withdraw in retirement by structuring your IRA in certain ways - like if you create a self directed IRA LLC you can use the funds to invest in property. Learned about loop holes for back door contributions, etc.
If i could go back in time, i would have started a relationship with an accountant with a tax law degree and used guidance they provided to set myself up a bit better.
My MIL uses Edward Jones type advisors and pays a hefty fee for them to manage her money - something like 8k a year but she doesn’t really have to think about what to invest in. She also doesn’t have her money saved effectively.
The lawyer / accountant i am using can provide the structure advice that i find to be more important. for the investments themselves, you usually just put the money itself into ETFs (basically buying shares of a fund that owns a spread of stocks) and it will grow.
I also play around with a small amount of money in an individual brokerage account which helps me learn a bit more about selecting stocks myself.
Rising Star
One other thing that no one really tells you to consider - HSA!!! triple tax advantage! All you need to withdraw is receipts and if you create a decent filing system, you can stock them up and withdraw nice chunks. There are apps for saving receipts. I use Google drive.
My husband turned a $1k company contribution into $15k in 6m by investing the funds.
I work Benefits adjacent and most HR teams do not want to talk about the investment side of an HSA bc they feel it’s complicated. That being said - it’s also a known fact that most Americans should plan to have $400k saved JUST for medical expenses in retirement.
Rising Star
I’m sorry to hear that. The cost of care is absolutely insane.
The other driver is senior care. I had no idea how much it cost until my grandmother needed it. A senior care / memory care facility cost about $7k a month and it was honestly the worst facility.
If you want Medicare to cover it, the senior basically needs to have $0 net worth / no assets over a five year look back period. They can’t gift money away… whatever they do have is taken to offset the cost of care until they have nothing left. Which is scary because they still need money for other things.
Then, if they have have anything when they pass (a home, life insurance, etc), the government can seize it to ‘pay back’ the cost of their care.
I like CEO’s advice. Assuming you don’t have a large inheritance to manage, I’d look up some basic personal finance books and go from there. There’s a ton of info available online also.
I started with “I Will Teach You to be Rich” which was basically a step by step guide on how to get your finances organized and how to prioritize savings. It also addresses some key concepts like minimizing fees with investments, time in the market is important, etc.
If you’re just starting out and don’t have a huge net worth due to inheritance or whatever, you don’t really need one. Assuming you already have emergency funds, contribute to your 401k up to company match, max out IRA, max HSA, max 401k, then open a taxable brokerage and buy broad index ETFs like VTI, VXUS, or VOO (vanguard funds but most brokerages have equivalents). Track your spending and create a budget.
I found the personal investment bowl tips helpful: https://joinfishbowl.com/bowl_968ywcvjm7
Sounds like you should go for a Robo advisor/ automated investing. Try Marcus Invest.
Check out Betterment! Just started using them & it’s been great
Vanguard index funds all the way. Much lower fees than paying someone. Also a financial advisor isn’t legally obligated to act in your best interest. Only fiduciaries are required to do so.
The fees you pay a financial advisor compound over time and can cost you hundreds of thousands by retirement.