Crane Asset Management LLC
Chief Investment Officer
Crane Asset Management LLC is a full-service investment counseling firm providing investment management services to private individuals, retirement plans, endowments, and charitable foundations. All accounts are managed on a discretionary basis. John Frye founded the firm in 2003, with a partner who remains Chief Operating Officer. They work with all of their clients to formulate a long-term investment strategy that will meet their investment objectives while addressing their risk profiles. Understanding their clients in this way enables them to develop unique plans based upon each of their clients’ needs to help them achieve their financial goals.
Before co-founding Crane Asset Management LLC, John served as Executive Vice President and Portfolio Manager at Renberg & Associates in Beverly Hills. He began his career with E. F. Hutton & Company in New York and subsequently worked with Alex. Brown & Sons in Baltimore. He received his Bachelor of Arts in Politics from Princeton University in 1977 and his M.B.A. from Columbia University Graduate School of Business. John holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Los Angeles.
BA, Politics, Princeton University
MBA, Finance, Columbia Graduate School of Business
Assets Under Management:
Crane Asset Management is registered with the State of California. A copy of Crane's Form ADV filing (Parts 2A and 2B) can be accessed here. In addition, Crane's Form ADV (Part 1) can be downloaded from the SEC's website. (Type in Crane's name in the field provided and follow the instructions on the site to download the information required.)
Frankly, I think it's a dumb idea. You should only own life insurance if there is someone who would be materially affected, financially, if you died. You don't say if you are married or have children; if you do, by all means get enough insurance to fill the financial hole that your death would create in their lives. Otherwise, save the money or put it towards paying off debt. Insurance brokers get a nice commission if they sell policies and it's easy to talk young people into it because premiums are low at your age, but resist. 3-4% is a lousy long term return. If you are fortunate to have a family and a nice income 15 years from now you will still be able to buy term life insurance for a relative pittance. Meanwhile, get in the habit of building savings. Contribute as much as you can to your 401(k), if you have one, or an IRA if you don't. Every month, "pay yourself" at the same time as you pay your rent, utilities, credit cards, etc. You'll be surprised how fast your nest egg grows.
No, unless your "brokerage account" was titled as an IRA. You only owe tax on the gains. Whatever the difference was between your cost basis and the amount received upon liquidation is taxable income. Some of it may be long term (held over a year and taxes at lower rates) or short term (taxed as ordinary income). If you had a loss you can deduct the first $3,000 from your ordinary income and carry the rest forward to offset gains in future years.
If you liquidated an IRA and took the proceeds as a distribution, you will not only be taxed at your marginal bracket but if you are under 59-1/2 years old you must also pay a 10% penalty. (If you did this less than 60 days ago you can still undo it. Hurry.)
By the way, after taxes and inflation your return on a CD will be negative. Liquidating your equities and other dividend/interest-paying assets (unless you need this money in the next 12 months) was a dumb thing to do.
Even though a house can turn out to be a good investment you should never buy one solely as an investment. I would say that you should continue renting as long as you are happy in your current home.
The problem is that in retirement you ought to have your assets be liquid, spendable, and home equity most assuredly is not. You would tie up a lot of money in the down payment and then assume the extra costs of mortgage, property taxes, insurance, maintenance, etc. Don't saddle yourself with that responsibility. "You can't eat home equity." You would reduce your available funds and simultaneously increase your monthly obligations. I think you would hate yourself for having done that.
Besides, as you age, aren't you going to need less space, not more?
You should absolutely buy the term insurance, but resolve to put away the difference into an investment portfolio. "Whole life" is really just an insurance policy with an investment portfolio wrapped around it -- the pitch is that you pay a lot per month when you are young and then your portfolio pays the premiums down the road. Usually the returns on that portfolio are low and the management fees are high. I believe your father-in-law is well intentioned in that it's often hard for a young couple to discipline themselves to make monthly deposits to savings. Prove to him (and yourselves) that you can do it.
You can have "cash value accumulation" with anything as long as you force yourselves to (1) contribute steadily; and (2) do not touch until retirement. The best way to do that is to set a 401K contribution as high as you feel comfortable setting it, and put the rest into a Roth. I think it's too early to set up 529s if you don't have kids.
One further thought: At your stage in life you probably don't need $2 million in life insurance. You should have just enough so that if one of you dies suddenly the insurance will fill the financial hole and allow the survivor to continue without disruption to his/her lifestyle. This number is probably fairly small today (think in terms of about 5 years' income) but will grow as your family grows. You can always get modest term policies today and layer on additional policies later. That could save you some money.
Insurance is not an investment; it's a bet you hope you lose.
It depends on the size of your invested savings. If they are small (say, less than five years' living needs) then the additional cost of an advisor might not give you enough of a benefit for it to matter much. You might consider hiring a planner by the hour to select some funds for you, but might be better off avoiding the ongoing management fee. However, an advisor would be very valuable if you have substantial wealth. First of all, he/she would recognize that a 50-50 allocation might or might not be optimal in your circumstances; also, your advisor could assist in planning your estate, guiding you through times of market volatility and helping to keep you from acting out of fear; and putting parts of your portfolio into asset classes you may not be familiar with but would be very beneficial (for example, preferred stocks.)
And you should never under any circumstances own stock options. They are gambles, not investments.