Senior Vice President
In her advisory work with clients, Michelle Brownstein seeks to deliver a cohesive, transparent strategy to managing their wealth and achieving their goals. Michelle understands that the first step in any successful relationship with a client is to truly listen and ensure that there is a clear set of goals laid out up front.
While Michelle currently specializes in working with higher net worth individuals, her experience ranges from working with individuals just starting out and putting their first plan in place out of college to those living off their assets in retirement and figuring out the best way to pass assets to the next generation. Michelle is known for her directness and believes that being straight forward with clients is the best way to help them, even if the truth is a bit hard to swallow at times.
Michelle holds a BA in Economics along with a minor in Political Science from UCLA where she graduated with Honors; she earned her CFP® after completing the necessary course work through New York University.
Michelle loves to travel and often visits her family, who are still based in Southern California. When not in the office, she spends her time running, swimming, exploring new restaurants in San Francisco and cooking.
BA, Economics, UCLA
As a general rule of thumb, before putting money towards retirement, pay off loans with an interest rate exceeding 5%. Interest fees on loans with interest rates above 5% will offset any probable investment gains, so you should start making extra payments toward these loans to reduce total interest expense, if you can. However, if the rate on the loan is less than 5%, it usually makes sense to invest extra cash, rather than paying off loans faster.
According to research we recently conducted, 48% of parents say they would prioritize saving for their child’s college education over their retirement – so the situation you’re faced with is a common one. When managing conflicting financial priorities, in most cases, saving for retirement should be a priority over saving for your child’s college. There are ways to offset the costs of college, like scholarships and student loans, but it’s a lot more challenging to offset the costs of retirement.
Remember to max out 401k contributions up the amount your employer (and your husband’s employer) will match at your respective jobs. If not, you’re leaving money on the table!
Hiring a financial advisor can be the right choice for a variety of reasons: advisors not only offer investment expertise, but they can also help manage some of the anxieties associated with investing to keep you on track towards your long-term goals.
That said, they are some points to consider when evaluating what type of advisor makes sense for you. It’s important to remember that only financial advisors who are fiduciaries are legally required to put your best interests first. If your advisor isn't a fiduciary, they are only required to follow a suitability standard and may be making commission off their recommendations to you. When considering a firm and an advisor, ask questions. Press as to whether they’re a fiduciary and ask how they make their money. If you don’t like the answer, walk away.
First, congratulations – doing your research is a great start!
One of the first steps you should consider is beginning to save for your retirement. If you’re still an active member of the military, that may be via a Thrift Savings Plan. It could also be through a 401k plan, an employer-sponsored plan that allows you to save for retirement in a tax-sheltered way (up to $18,500 per year in 2018) to help maximize your savings. If your employer offers that plan as an option, you can “set and forget” contributions, meaning you can withhold a percentage of your paycheck every month and have it be directly invested. Often employers will match a percentage of your contributions – generally within 3% to 6% of your annual pay – so if you can, I encourage you to contribute up to that match.
If your employer doesn’t offer this option, consider a traditional or Roth IRA. We’ve pulled together a video that walks through the differences between the two.
While robo-advisory platforms can be a more affordable option for investors seeking advice, many are not equipped handle larger portfolios or more complex financial planning needs. Investors who fall into the affluent/mass affluent bucket will likely need more personalized, higher-touch service to manage their assets. Advisors, and the companies they work for, can offer additional services such as tax efficient security selection, regular tax-loss harvesting throughout the year and estate planning advisory.
Perhaps one of the most overlooked benefits of working with a financial advisor is an easily accessible, objective third-party that can help manage the emotions associated with investing. In the last few years, we’ve seen a strong bull market with relatively low volatility. As a result, investors trust their robo-advisor to return gains. When a correction arrives, investors’ emotions will kick-in, and many will try to override their robo accounts and end up pulling out of the market at the wrong time. Having an advisor is key in helping you stay on track for the long-term. Just make sure that your advisor is a fiduciary, which means they’re legally bound to act in your best interests.
There’s a common saying that cash is king – but that saying isn’t necessarily true when it comes to your portfolio and long-term financial goals. Cash has a place in any strategy, and in your case, that means short-to-mid-term liquidity needs. As a general rule of thumb, I recommend that you keep an emergency fund of three-to-six months of expenses in cash, plus enough cash to cover any larger purchases you plan to make in 18-24 months.
Beyond that, simply put, your money isn’t being put to work if all of it is sitting in a checking account.