Having no money is complicated.

Having enough money to pay your bills is not very complicated.

I'm just entering that weird spot where I have enough money that that it's getting complicated, but I don't have enough money to pay somebody else to handle it. I'm sure some of you got here long before me, and some will get there after me.

It's easy to make mistakes that cost a lot of money.

I have an engineering degree, and have had a successful career for 20+ years. I'm not the smartest guy in the room, but I pick things up fairly quickly. I'm drinking from a firehose trying to understand money management right now. Balancing income, tax avoidance, liquidity, long term investing, cash management.....

The early days were simple. Get a check, spend all of it. Now I have to figure out what to do with anything left over, try to keep what I have, and grow what I can.

You have to work hard to get here, and now you have to work harder to stay here.

quote:

Originally posted by fwbulldog:
Get a check, spend all of it.

Hopefully it didn't take you 20 years to figure out this was a poor life choice..?

It sounds like you're asking the right questions and thinking about the right things. That will get you pointed in the right direction. Just remember this: if you can learn to live on 80% of what you earn you will always have a healthy cushion.

I've never had more money than I know what to do with.

So like you say, my finances have been very uncomplicated.

But as a Gemini dreamer,
I have it worked out in my head that,

My financial burden would not begin until the seven figure per year mark.

30% of me hopes I never have to trust other people with any part of my finances.

Research local financial advisers. Set up an appointment with the most successful one and get some guidance.

It doesn't have to be hard.

Email sent.

quote:

Originally posted by beltfed21:
Research local financial advisers. Set up an appointment with the most successful one and get some guidance.

Yea, that's a problem. Unless you have enough money, they won't deal with you. If you have a little money, the ones that will deal with you bamboozle you out of a lot of it with fees and commissions. You'd do much better just investing yourself in the lazy-3.

I've interviewed several from the Dave Ramsey ELP list. All of them just want to push me into expensive investments. They don't look expensive, and they'll throw lots of charts at you showing how much you'll make, but some were as high as 5% up front fees. No thanks.

Just finished reading "The Power of Zero" by David Mcknight. Pretty interesting take on what's wrong with the prevailing wisdom of "max out your 401k" mindset. There is no chance that taxes are going to be lower in 15 years. These giant pots of money people have invested in 401ks, that have been growing for 20/30 years, are going to have RMDs at tax rates that are going to make you throw up. Double whammy when it counts as provisional income and triggers your SS to be taxed.

Navigating future taxable events is tricky. Some crazy rules about income limits, contribution limits, back-door conversions. And now the CARES act has made some options available that have never existed. It's complicated.

It will become more complicated if the wrong friends or relatives find out you have "extra" money.

Good luck with it. I've consolidated with Fidelity and am happy with them.

If "major money" comes in via inheritance, Fido can handle it for a fee or it may go to a Bank & Trust, under a separate revocable trust. I like the idea of locking away such a large sum until my youngest relative is in her 50s, but am not sure that is allowed. Regrettably, it is not currently a problem I suffer.

Save early, save often. You miss a chance here, you never get another (at least not with that chunk of money).

Don't worry about where exactly to invest, you have plenty of time to evaluate and make choices. It is a lot easier to redirect funds already in the mix than to try to find more to drop in there.

And for heavens sake, don't worry about maximizing your return, missing an opportunity, etc. This can only be recognized in retrospect. Worrying about it sours the positive things you have done, and leads to poor decision making.

In the event of a sudden influx of cash
I will be giving
www.suzeorman.com a try

quote:

Originally posted by Woodman:
It will become more complicated if the wrong friends or relatives find out you have "extra" money.

Good luck with it. I've consolidated with Fidelity and am happy with them.

If "major money" comes in via inheritance, Fido can handle it for a fee or it may go to a Bank & Trust, under a separate revocable trust. I like the idea of locking away such a large sum until my youngest relative is in her 50s, but am not sure that is allowed. Regrettably, it is not currently a problem I suffer.

My and employer 401k and RSU plan is with Fidelity. I also have a Roth IRA with them. At this point it's all in a targeted date fund, which hasn't been awesome, but it's doing ok. As I get more educated I'm starting to shift things a little bit here and there. I've ridden through two pretty bad crashes, and it's pretty likely the next one is coming soon. I have time to ride that one out (I hope).

quote:

Originally posted by fwbulldog:

Just finished reading "The Power of Zero" by David Mcknight. Pretty interesting take on what's wrong with the prevailing wisdom of "max out your 401k" mindset. There is no chance that taxes are going to be lower in 15 years. These giant pots of money people have invested in 401ks, that have been growing for 20/30 years, are going to have RMDs at tax rates that are going to make you throw up. Double whammy when it counts as provisional income and triggers your SS to be taxed.

Don’t sweat SS taxes in retirement. Frankly, if you’re NOT getting taxed on 85% of your social security payments you’re probably living a little too close to the edge. SS should be around 35 or 40% of retirement income at most and at that level there’ll likely be some taxes on it. Only if you have little income beyond SS will you avoid taxes on it and that will not be a very satisfying retirement. Roth IRAs solve the problem today, but if the socialists take power you can bet roths will cease to be taxfree at some point. Got to pay for all that free stuff somehow!

keep 6 months 'cash' in a savings account.

get a brokerage account at Schwab / Vanguard / Fidelity

buy VTI w / no transaction fees. dollar-cost in over time. do that for the next 25 years and I bet you'll be happy you did.

doesn't have to be any more complicated than that.

------------------------------------

Keep learning and don't assume others (the experts) are smarter than you are. Keep it simple.

As an engineer you can probably learn anything. This is a perfect thing to learn to do yourself.

Strive to get credit cards and cars paid off and the mortgage as soon as you can. If you are still in your peak earning years without debt you are more than golden.

Vanguard worked really well for us... everything in one place, advice if you need it, great customer service.

We are retiring in January with no debt and we own our home. It wasn't easy, nor fun but it's so worth the effort when you get to our current situation.

quote:

Originally posted by fwbulldog:
it's pretty likely the next one is coming soon. I have time to ride that one out (I hope).

Nothing wrong with having 25% in cash between retirement and individual accounts when you think we're at the top of the market; as you get older, you may want more liquidity as a matter of principle.

I finally got into an Australia & New Zealand fund; had been meaning to do that for years. Overall, about 15% domestic and 35% foreign stock. 35% bonds, 15% on the sidelines. A 'moderate' portfolio.

I have a couple 401K's from two jobs.
Have a decent chunk of change that the wife inherited invested as well.

My current job makes me save also, bastards.

I'll retire one day, but never quit grinding.
Estate sales/flea markets/yard sales are ripe for deal hunters.

Have one house on land contract, thought about retiring early and trying the slum lord thing.
As I get older, the less I like most people though.

I guess I'm kinda in the same boat, OP.

Have a very successful investment banker/neighbor that advises me, and I have the wife's money with, maybe "too" successful if you know what I mean.

Recently opened a Roth with TD Ameritrade so I could buy a couple stocks during the Covid crash.
Big return % wise, but I was scared and only put in a few $500 installments, should have dumped the other account and put it all on Royal Caribbean and Carrier's IPO, could have doubled up and ran by now.

Lets see...

You'll need an X-Six, 2011, Korth, Nemo Omen, M2...

Other than what has been mentioned already, see if it would be economically feasible to roll in to/start a Roth 401k if one can be had.

Having too much money is def a good problem to have. Aside from the obligatory cash savings for emergencies, most people recommend a mix of short and long term investments.

ETFs are a solid investment, pretty low risk and good historical performance. REITs are also a lesser known option for many. Real Estate Investment Trusts either own/manage or invest in commercial properties such as apartments, so you get a dividend from the rental income during the contract period (3 to 5 years usually) after which the property is sold, hopefully for a profit and you get a piece of that as well.

Then of course there’s government bonds or T bills, which are very low risk, but tie up your money for long periods without significant growth.

No matter what the tax man is going to get his cut in the end.

I use Edward Jones and Fidelity. I expect them to act as a fiduciary, as I do not trust a single adviser, accountant, or broker to act in my best interest. The more you have, the more complicated this problem becomes.