Successful Portfolios LLC
President and Chief Investment Strategist
Parker Evans, CFA, CFP founded Successful Portfolios in February 2010. He is a licensed Investment Advisor Representative with 30 years of professional experience. His wealth management credentials include Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Market Technician (CMT). Successful Portfolios helps individuals and families plan and manage personalized investment portfolios at leading online brokerages, including Charles Schwab, TD Ameritrade, and Interactive Brokers.
BA, Economics, Eckerd College
MBA, Finance, Nova Southeastern University
Assets Under Management:
Successful Portfolios Form ADV Part 2 Brochure is available on the SEC Investment Advisor Disclosure website: www.adviserinfo.sec.gov, Firm CRD# 152429.
I suggest you consider opening and funding a nonqualified investment account at a reputable online broker. Charles Schwab, Interactive Brokers, and TD Ameritrade are good choices. Also, consider engaging an independent advisor at one of these brokers.
At 3.7%, assuming that's a fixed rate mortgage, I think it makes sense to pay off your mortgage as scheduled and not prepay. Also, from a diversification perspective, I believe it's a good idea to not put all your eggs in one basket, i.e., qualified retirement accounts. The future is uncertain regarding tax rates and your need for pre-retirement liquidity.
Regarding the distribution you and your wife take from your portfolio, the 4% rule states that retirees with a diversified portfolio split between stocks and bonds can safely withdraw 4% of their initial balance at retirement, adjusting the dollar amount for inflation each year after that.
Regarding the asset allocation in your portfolio, if you want to reduce risk, then increase the proportion of high-grade bonds relative to stocks. Before you make any changes though, I'd advise you to assess your risk tolerance by taking the award-winning online FinaMetrica Risk Tolerance Test.
Given your circumstances paying off all of your student debt now would be unwise. A better approach would be to pay off any high-interest low-balance student loans. Hold on to most of your cash in a high yield online FDIC insured savings account for the time being until your financial future appears more predictable.
And congratulations on what is in effect the defeasance of your student debt.
Yes, to "trade on margin" in a securities account, by definition, you must take out a loan to do this. Here's how it works. You open a margin brokerage account with a $90,000 deposit. Once you've invested all your cash and then buy more securities (e.g., stocks), you'll automatically be the loaned money. In a standard "Reg T" margin account, you can leverage your deposit 2 to 1. In other words, you can buy up to $180,000 of stock with a $90,000 cash deposit.
Please be aware there are risks and complexities trading in a margin account not addressed by the above answer.
Margin Primer: https://www.interactivebrokers.com/en/index.php?f=24862
Congratulations on having a solid financial plan at such a young age. Consider opening a brokerage account and investing in low-cost, no transaction free, Exchange Traded Fund (ETF) at an established online brokerage such as Charles Schwab and TD Ameritrade. Managed mutual funds tend to be less tax-efficient and more expensive to own than comparable ETFs.