Founder & CEO
Chance Butler is the Founder and CEO of InvestingUnder35. Life is meant to be enjoyed and no one knows that better than he does. At birth, Chance was given a 50/50 shot a living, hence the name Chance. His early years consisted of a lot of illness which forced him home from school and he count those days as a blessing. While home sick, his grandfather was an individual investor and watching the stock market channel all day with him is where he found his passion for investing and business. Chance made his first investment in grade school and have been correctly managing his finances and investments ever since.
The Millenial generation is redefining the world. Who wants to wait until traditional retirement age to enjoy life and finally check off those bucket list items? Not Chance!
A Financial Advisor can truly have a profound impact on the lives of their clients. As Fiduciaries, they exist to serve their clients by always having their best interests in mind. Their goal is to help you live life your way NOW without sacrificing tomorrow.
It is his hope that when you work with InvestingUnder35, you not only receive personal and expert comprehensive financial advice, but that you find a life-long friendship with your advisor.
Assets Under Management:
Fee-Only Fiduciary - Investment Planning
Annual Retainer - Financial Planning
Any comments or articles posted are strictly for educational purposes only and should not be considered personal one-on-one investment, tax, or legal advice.
Great job on setting yourself up for early financial success! You should definitely look to start a portfolio of stocks and other asset classes.
If you're looking to grow your money, a CD would be an absolute waste of time. Historically low interest rates + rising inflation means you would essentially make no money at all in a CD. It also locks your money up, so if you did need it back for some reason, you would forfeit a lot of the gain.
Stocks are the second best way to grow your wealth, while your skillset is the first.
Here is an example of a portfolio for a "medium" amount of risk:
Gold(Gold Streams are the best): 5-10%
Cash(Money Market Fund): 5-10%
If you're brand new to investing, I always try to include one of my client's favorite companies in the portfolio. This will help them stay invested during a recession.
Hope this helps!
You have lots of flexibility within your current financial situation, which is excellent! Here are some ideas and thoughts that really stood out to me after reading your situation:
1. You're looking for an advisor that is Fee-Only and held to the Fiduciary standard. This simply means the advisor has legal accountability to always act in your best interest at all times and they are not compensated based on recommendations or product sales.
2. An Immediate Income Annuity could actually be a great recommendation for you. This could solve your current income needs and it would provide a life long income stream on which you can include in planning your retirement lifestyle. Typically, you take a chunk of your assets, say $150,000 - $200,000 to purchase this type of annuity.
3. Instead of the annuity, have you thought of selling your rental property? With low inventory in most of the markets, it is still very much a sellers market and this could solve your income needs for the immediate future and allow you to maximize other income sources.
4. If you solve your immediate need for income with #2 or #3 above, it would be best to maximize your Social Security Benefit. Hopefully you are looking at 30+ years in retirement, so maximizing it could be extremely beneficial. Also, depending on your wifes age and Social Security history, it could be extremely important.
5. As you're just starting to enter the retirement phase, the biggest threat you face is a market downturn(Becoming ever more likely with the Trade War tensions escalating) and having to draw on that account in the same year. That is a tough scenario to make up.
6. Unfortunately, that long-term bond recommendation was absolutely unsuitable and a terrible recommendation. As interest rates go up, bond values go down, especially with longer durations. You are looking for a more diversified portfolio of some bonds(floating rate and shorter duration), income stocks with some room to grow and some other real assets like Gold and Real Estate that can throw off a nice amount of income, but can also grow in value over a longer time frame.
Hopefully this gets you moving in the right direction!
I'm more than happy to go into more details. Feel free to setup a complimentary consultation anytime!
The best method for selling is going to a dealer listed in the government database found here: https://catalog.usmint.gov/bullion-dealer-locator
Since Gold is considered a collectible, the profit from the sale will be taxed at 28% and needs to be reported on your income tax; however, since you inherited this gold bullion, you should receive a step up in cost basis on the date of death. This means that you would pay the 28% tax on the appreciation in value from the date of inheritance to present day only.
Hope this helps!
I love that you are planning a future for your child!
The recommendations would vary quite differently depending on the age of your child and what the money will be used for. If he is 15 or older, a savings bond purchased from a bank would be a good investment. It will grow slightly, and be guaranteed when it's redeemed.
If the child is much younger, investing in stocks would be a great way to grow the money. The 100 year average for stocks is roughly 8% year over year growth over a period of time. A simple S&P 500 index would suffice(IVV) or if you want to be a little more enterprising, a concentrated purchase in something domestic will do quite well over time.
Is the money for college or further education? If so, take a look at your states 529 plan. They will have investment options to choose from, and this will grow tax-free! The only downside is the money must be used for education related expenses or a penalty will be issued.
Hope this helps! Feel free to reach out for a more personal recommendation!
Chance Butler - Intelligent Investor
Hello and congrats on this distribution! Not every employee gets this opportunity, so it's great that you're looking to maximize this benefit. Here are a few thoughts I had when I read your question:
1. Without having access to the options plan documentation, you can typically specify how many shares you elect to purchase at the exercise price. So you may not have to take the full distribution now, and elect to break it up into several years to help lower your high income. This really depends on the vesting schedule and how the options can be exercised, understanding the plan is critical here.
2. Maximizing your wifes contribution to her 401k is a great way to lower your tax bill! $18,500 is the max she can contribute this year.
3. If you take the full $200,000 - $250,000 you will be unable to make a deductible contribution to an IRA because of your high earning status.
4. 529 plans could help with your state income, but will not help you on your federal taxes owed. The state income obviously depends on what state you live in!
5. One option, if charity is on your heart and part of you long term plans, is to make a contribution to what's called a Donor Advised Fund. This allows you to donate a large chunk of money, receive the tax break benefits, invest the money and write grant checks to your favorite charities worldwide. The growth of these investments is also tax free and this can be passed down from generation to generation.
6. Finally, speaking with your CPA about your current deductions would give you an idea of where you stand tax-wise today.
Hopefully this helps with some ideas!