MZ Capital Management
Michael Zhuang is founder and principal of MZ Capital, a fee-only registered investment advisor firm located in the Greater Washington D.C. metropolitan area.
Michael earned dual Master Degrees in Mathematics and Quantitative Finance from Carnegie Mellon University. He was also a PhD candidate for Financial Economics. After completing all training and exams, he decided his true calling is not in academia. The PhD training taught him how to think rigorously and research thoroughly.
From 1999 to 2000, Michael worked as a financial engineer for Societe Generale, the biggest French banking group.
From 2000 to 2003, Michael was hired by PG&E National Energy Group to launch their weather derivatives trading business. Within 2 years, he became one of the top 3 traders in the field. Nevertheless, he saw first hand the crooked ways of the financial industry where everything goes to make a buck. That experience motivated him to launch MZ Capital.
Michael's investment approach is based on the Nobel Prize winning research of Eugene Fama. He is also deeply influenced by three people: Warren Buffet on value-orientation and patience, David Swensen on multi-asset-class investing and decision framework, and John Bogle on minimization of costs for clients and stewardship of clients' money.
Michael is active in the community. He twice sponsored Melodic Impact, a musical fundraiser for kids with cancer. He volunteered as an instructor for Toastmasters International's Youth Leadership Program. He was on the board of Special Love, Inc., a non-profit devoted to kids suffering from cancer. Recently, he also completed Leadership Montgomery.
Michael is married with two children. His favorite past time is stand-up comedy and storytelling. He was nominated as Top Ten Storytellers in Virginia. He has also won multiple Story League contests in DC and Best Storyteller in Philadelphia's Story Slam. He performed clean comedy regularly in corporate, charity and association events.
MS, Finance and Economics, Carnegie Mellon University
MZ Capital Management Story and Value
Since you are only 44 years, if you cash it out now, you will pay taxes and a 10% penalty. I am sure there are better ways to payoff your car and go on a vacation. Maybe you can get your husband to moonlight for Uber. Just FYI, if you cash out when you are 59.5, you will still pay taxes, but at least there is no penalty.
Also you may want to rollover to an IRA that you have full control over. Rolling over to your current 457(b) could be an option as well if the plan has good investment options. Don't leave it with your old employer for simplicity and safety's sake. I have a client whose old employer went bust, and his 401(k) money was frozen for 2 years as the court sought out the wreckage. You don't need that.
It's more advisable to rollover into your IRA for the following reasons:
1) Most 403(b) and 401(k) for small entities have horrible investment options and exorbitant hidden fees (especially those plans peddled by insuarance companies). Check out this article: https://investment-fiduciary.com/2010/07/15/sucker-401k-plans/
2) When your money is in a 403(b) or 401(k), it's still not quite your money. Everything you want to do with the money, the trustees of the plan have to sign on to it.
3) If the entitiy should go bankrupt, assets in the 401(k) or 403(b) plan would be frozen by the court to ensure there is no monkey business to hide money from creditors. You don't really want to deal with that when you had left the entity.
There is no straight answer to your question. Financially, it appears better to invest with your financial advisor, but the outcome is not certain. On the other hand, paying the mortgage may give you peace of mind, which is very valuable as well. With regard to working with a financial advisor, I'd like to encourage you to understand the legal framework governing financial advice. Most financial advisors are either brokers or registered investment advisors. The brokers are regulated by The Securities and Exchange Act of 1934 that does not require them to act in their clients' best interest, in other words, they do not have a fiduciary responsibility to their clients. The registered investment advisors are regulated by The Investment Adviser Act of 1940 that does require them to act in their clients' best interest, in other words, they have a fiduciary responsibility to their clients. It may come as a surprise to you that 93% of all financial advisors out there are brokers who don't need to act in your best interest. All financial advisors from major banks/brokerages are brokers; thought not all brokers are from major banks/brokerages. The question to ask is, do you have a series 7 license?
In any given years, there are always some funds that perform better than the index. Are they just lucky or the managers truly have skills to beat the market? Study after study have showed that it is mostly due to luck. Since there are so many funds in the world, there bound to be some that will beat that market.
A good analogy would be a stadium full of people tossing coins. After the first coin toss, heads remain standing, tails sit down. About half will remain standing. After the second coin toss, head remain standing, tails sit down. About a quarter will remain standing. So on and so forth. After the tenth coin toss, odds have it that there are five people remain standing. They have consecutively tossed head ten times. Are they expert coin tossers? They are not. If you try another round of ten coin tosses, they could sit down very quickly.
The same logic applies to outperforming funds.
Wow. $15,000 a year income is barely a living wage. One thing I can tell you is that there is no portfolio of any kind that can solve your money problem. Your best investment is not in stocks, but in yourself, which I presume you are doing by going to school. Instead of trying to build a portfolio, make sure you learn marketable skills, and also learn to market your skills. One last thing, learn storytelling. This is a powerful tool. I hired my first employee because he told me a story that touched me. People will open doors for you when they empathize with you.