Vestnomics Wealth Management, LLC
Russ Blahetka, CFP® is the founder and Managing Director of Vestnomics Wealth Management, an independent, fee-only, Registered Investment Advisory firm serving individuals, families, and self employed individuals. He founded Vestnomics on the simple concept that everyone has the right to achieve their financial goals. Prior to this, he was a Financial Advisor and District manager at Waddell & Reed.
At Vestnomics the focus is on the human side of finance. Together, Russ and his team cut through the jargon and media noise and focus on the personal, human aspect of their client's finances. Vestnomics is a personal, economic advisor. The fee structure for the firm is transparent and reasonable. They offer hourly or flat fee for financial planning and also offer assets under management based fees. Russ' clients receive regular communications on their portfolio's performance as well as timely updates of market conditions. All advisors at Vestnomics are bound by the CFP® Board's code of ethics. This means Russ and his team are bound by the "best interest" standard, not the less strict "suitability" standard.
In addition to helping clients towards their goals, Russ teaches "Investments in Personal Financial Planning" at the UC Santa Cruz Extension. Additionally, he teaches "Financial Statement Analysis" in the extension's CPA and Business Administration program. Outside of his professional endeavors, he can be found taking lessons in an Evektor Sports Star working towards his Sport Pilot License. Furthermore, he serves on the board for Title IX Media, an organization which promotes gender equality in sports, and the Academy of Finance at Independence High School.
DBA, International Business, Argosy University
MBA, Global Business, San Jose State University
Assets Under Management:
Information contained in this posting is informational and educational in nature. Do NOT take information provided here as legal, tax, or investment advice pertinent to your specific situation. Any information posted here is not a solicitation of any type, nor does it constitute an opinion on the appropriateness of any investment either in general or specific to the reader's situation. Do NOT act on any information or answer without obtaining legal, tax, and/or investment advice specific to your situation from an appropriately licensed professional.
You are right, "working in banking" is a very vague way of describing a career. There are many different banking careers you could consider, from being a teller to running a branch. However, there is also investment banking, agri-business banking, etc. You could go into lending, securities, personal banking, commercial banking fraud, and more.
Start by looking at what you enjoy most. Are you an analytical type person? Do you like to ferret out mysteries? Are you more of a relationship person? Do you thrive on personal interactions? This will help guide you to an area of the banking spectrum that may hold interest for you. Once you have some idea of your own personal style (and if you aren't sure, ask some of the people around you- they can provide some feedback- some may be brutally honest), you can start looking at descriptions of what some of these careers may be like. The internet has a lot of information available. You can try JobMonkey, Chron, or BankingCareers to name a few.
Once you have an idea of a direction or two, the next place would be to try and score some informational interviews. In this case, you aren't looking to land a position (though it may be possible), but to gain more information as to what the realities of a particular position may be. This is where your personal network may be helpful. You may be saying, "I don't know any bankers!" True, but someone may know someone in a bank in their network who may know someone in a position in which you have an interest. It may cost you a cup of coffee or a Big Mac and Fries, but the more you spread your net, the better opportunity you have of landing a position you would like. Make sure you have a resume available in case you are asked for one. Also, send a thank you NOTE (or CARD), not an email. Yes, you paid for the coffee, but they helped you. They may not be slighted if you don't send a card or a note, but they will remember you longer if you send something tangible. A note is something that will not be easily deleted or end up in a spam folder.
Then, once you are sure of a position, polish the resume to better meet what the employer is seeking and go for it. Let your network know what you are in search mode.
One last thing, do not make the mistake of thinking your first position will determine your career path for eternity. It won't. It will determine what skills you will learn that can be applied if you ever decide to make a career change or change to another specialty in your career field.
There are a couple things to consider here. First, at the very least there will be tax implications removing money from your IRA. If you are in the Federal 25% tax bracket, you would need to pay taxes on the $16K (I don't believe this is considered taxable for TN state income tax purposes). If you pay it from your cash flow that would be $4,000. If you want to remove enough to have $16K net of taxes you would need to remove $21,333 (there is tax on what is distributed for withholding). At worse, if you are under 59-1/2, you will also pay a 10% early withdrawal penalty. In this case, a minimum of an additional $1600. So, if you are under 59-1/2, the $16K withdrawal will cost you an additional $4000 to $7466 in potential taxes and potential penalties. This is money that will not be available to grow. So, if all you remove is $16,000, assuming a modest 7% growth, you will have lost an additional $16K in growth on top of the $16K removed. If you remove $16K now, your balance drops to $64K, and assuming the 7% average growth and no additional deposts, your balance would be in the neighborhood of $128K. However, if you don't remove the money, you could have a balance around $160K. You could start replacing the money in the IRA but it will not grow to where it could have been if you hadn't removed it.
On the equity loan side, if you borrow $16K, your interest is potentially deductible. You would save a little on your federal taxes (better than paying), potentially save on TN taxes, and you can accelerate repayment if you desire.
It may feel better to not have the debt, and it may be one less check to write. However, deductible interest is generally better than non-deductible interest. Equity line interest is generally lower than credit card interest. And if you can potentially earn more on your IRA money than the net after tax interest rate, then it is better to keep the money growing for you.
Have a great weekend.
You don't say whether you are married, have children, have a job that offers some life insurance (should not be your sole source for protection), etc. That said, I believe most young adults should have some life insurance if only to cover final needs and reduce the stress on their parents/spouse/SO. At 24, having some term is a good thing. Having some form of whole life can be a good thing as well as it is something you will never lose if you keep up the premiums. Later in life, you may not qualify for life insurance due to health, but you will have some money set aside for final needs, etc.
Notice, I didn't discuss whole life as a 'bucket' for retirement. This is, in my opinion, an inefficient use of money. There are, as with anything, reasons to use a whole life policy for some purpose like this, but it should only be considered once you have taken advantage of other vehicles available such as your company retirement plan, a ROTH or traditional IRA, your emergency fund, etc., AND if you are in a high enough tax bracket to make such a policy more tax efficient than other vehicles. Also, the traditional whole life policy generally pays a low fixed interest. Other types of whole life, such as Universal life or Variable Universal Life, may be a better choice based on time horizon. However, remember, the main purpose of any life insurance is to provide cash to your beneficiaries.
Unfortunately, as you realized, if you stop paying on the whole life policy, you will lose at most the premia you paid. However, if you consider what you could do with the money (fully fund your retirement contributions, start a nest egg, etc.), it could be a better choice than continuing to make payments.
Insurance is an important part of anyone's financial life. It helps shift risk to provide protection to your property and loved ones. As with any tool, it works best when properly used. You may want to sit down with a non-commissioned advisor (may cost you some money now but could save you more ongoing) for a second opinion.
Congratulations on building so much wealth at such an early age. You have done very well for your self.
I think there are several reasons for your reluctance to invest more, but likely it comes down to uncertainty. Where should you put your money? What instruments? What amount of your hard earned money should you put at risk (seen sitting in a CD has risk, such as not keeping pace with inflation)? We tend not to act until we have some idea what actions would be appropriate. This is normal.
You obviously have money skills. However, just like a star athlete, you could benefit from some coaching. Is there a cost? Yes, but consider it another investment. You are investing in knowledge and having someone you can trust help you navigate some of the choices you have.
I would suggest you find a fee only financial advisor in your area. Someone that would charge you for financial consulting. There are firms that will do planning without you moving money to their management. You want someone who will act as a fiduciary, such as someone with an independent Registered Investment Advisor. You should also look for someone who is a Certified Financial Planner or PFS. This way you will get as near unbiased advice as possible.
Congratulations on paying off your student loans! That is a great accomplishment.
By a TSP, I assume you are referring to a a Thrift Savings Plan, the defined contribution plan for Federal employees. If you take a second job, the IRS will still limit your total contributions between multiple TSP plans or between your current TSP and another defined contribution plan such as a 401(k) plan or a 403(b) plan. The same holds true if you split contributions between a ROTH TSP and a traditional TSP.
However, there is an alternative. You can still contribute the maximum to your TSP and contribute to either a traditional IRA or a ROTH IRA. The limit for 2016 is $5,500. Like the TSP, this is a combined maximum. You cannot contribute $5,500 to three separate IRAs. This is short of a full $18,000, but it is helpful.
For the remainder of the money you could use tax efficient Exchange Traded Funds (ETFs) or mutual funds. The growth may not be 100% tax deferred as it would in an IRA or other retirement plan, but it would be tax efficient.