Bright Road Wealth Management, LLC
How I got into this mess:
I'll admit it took me longer to find my true calling than most. Resistance to wearing a suit, lack of a win-at-all costs attitude (commitment to my own integrity), and an industry rife with conflicts of interest all conspired to keep me from becoming a financial planner sooner.
But by the time I found my home as a fee-only financial planner, I had unwittingly built a strong skill set that became the perfect foundation on which to build a career. Creativity honed in architecture and the arts combined with 15 years of small business operational management and strategic planning, provide much more practical experience than many advisors with more direct experience can bring to bear. Years of coaching individuals in productivity and efficiency combined with study of behavioral economics gave me an intuitive understanding of motivation. Finally, years of outdoor adventure guiding and real estate investment management brought me enough risk assessment and risk management experience to fill several lifetimes.
What I provide for my clients:
I am committed to full-service, comprehensive financial planning and investment management. I work with clients, both in person and virtually, to optimize their unique financial situation. I like to help my clients save money and increase the return/ risk ratio of their investments. My goal is to maximize the probability of you achieving your own personal and financial goals. This is a long-game approach. As humans, we are prone to growth and as we grow our goals can change, so I use what I know about you to preserve your future choices.
When I am not working on improving your financial life:
I hang out with my wife and two young kids in the outdoors - biking, camping, skiing, or rafting. I teach Wilderness First Aid courses for NOLS. I volunteer as Treasurer of the Tacoma Waldorf School Board of Trustees.
Bachelor of Environmental Design, Texas A&M University
Fee-Only Based on Assets Under Management
Bright Road Wealth Management, LLC is a registered investment adviser in the States of Alaska, Texas, and Washington. The adviser may not transact business in states where it is not appropriately registered, excluded, or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.
No. Social Security payments are based on your work history and the age at which you claimed benefits. Once you’ve filed for benefits, the only changes should be cost of living adjustments, if you become eligible to claim spousal benefits, or if an error was made during filing. Your income can also effect taxation of your benefit.
First, I’m very sorry for your loss. That must be very difficult.
Here are three good possibilities for investing the money:
1) Put it in a Vanguard Target Date Fund. These are good investments, easy process, low expenses.
2) Put it in a Betterment account. This will provide a better mutual fund allocation that matches your investment profile. Still low expenses, easy process.
3) Find a fee-only (not fee-based), fiduciary (in all cases) advisor to build a portfolio for you. You get will the best results by working with someone to create a comprehensive financial plan. This portfolio will match your goals with the least risk needed to achieve the desired outcome. You will also get advice on some tax issues you are facing, such as required withdrawals of those IRAs. Some advisors may also be able to help you with decisions about the house.
I would avoid advisors who offer “free” advice, who recommend buying individual stocks, or recommend “guaranteed investment” or “alternative investments”. You don’t need the excess risk that these products require or the excess fees that go along with them.
I’d be happy to answer further questions for you and point you in the direction of more resources. Feel free to contact me.
You should not hire a financial advisor who is willing to select individual stocks for you, nor should you do that yourself. The historical evidence shows that the vast majority of people who engage in stock-picking underperform the market dramatically, even advisors. There are plenty of advisors still doing this thinking they are somehow able to predict the future. They can't, no one can.
Instead you should be investing in the entire market, which you can only really do with mutual funds.
To the question of allocation, I'd ask how you decided that 50/50 is the right allocation for you. This is where an advisor can really help. Asset allocation is complex and it's easy to mess up - naive diversification is a huge problem that I see when investors pick investments without guidance. The goal of asset allocation is to dampen the volatility of your portfolio while still achieving a reasonable return, but if you end up without proper diversification, your allocation can't do it's job.
To that end, if you want a do it yourself approach, an easy way to assure that you are actually diversified is to pick a low expense ratio target date fund. A target date fund for 2020 typically has a 55/45 allocation right now. This allocation will change over time in a risk appropriate way.
I'd recommend talking to a few fee-only (not fee-based) advisors to get a better understanding of your situation and what the best asset allocation would be for you specifically.
Here's a few things I wish I'd known when I was 20:
1) 80% of the free information out there is designed to either sell magazines or increase the number of trades an investor completes. Neither of these are good for investors.
2) If it sounds too good to be true, it IS too good to be true (except compound interest - haha - that's true and sounds magical). Don't try to beat the market, it can't be done consistently over time. If someone tells you that you can beat the market without dramatically increasing the risk of loss, they don't understand the numbers.
3) An investment of $1000 - $3000 now to meet with a good fee-only advisor will repay you exponentially over your lifetime. Think of this as inexpensive education.
4) There are lots of sales people that call themselves advisors. Ask how they get paid. An advisor who is paid by you only has her interests aligned with yours.
5) These days stock picking is a losing game. No one knows what the future holds. Plenty of blue chip companies have had their stock go to zero, but through diversifying across the entire market (aka mutual funds) you can almost eliminate the chances that your portfolio will go to zero.
6) Nothing in investing is urgent. If someone is rushing you to decide "now before this opportunity is gone," the answer should be "no thank you."
7) Sorry, I can't stop. Yes, invest now, early in life. This will greatly improve your chances of reaching your goals and dramatically increase the number of options you will have late in life.
Without question, you will benefit from saving and investing right away. This will build great habits for you in the future when your expenses start to creep up. The benefits of investing early are hard to overstate. The more time your money has to grow, the more secure your future will be. That said, you will need to balance saving with paying off your student loans.
At minimum, saving what is needed in the 401(k) to take full advantage of the match is essentially giving yourself a raise! After that, balance paying off the higher rate student loans with saving. If you need a boost to your credit score, as many do after college, pay off the newest loans first. Then your oldest loans are still helping to improve your credit score.
When choosing whether to invest more in your work retirement plan, it depends on the details of your employer's 401(k). If the fees are low and the funds available are high quality, then it would pay to put more money into the 401(k). The primary goal of 401(k) plan designers is reducing risk, not catering to each individual's needs. It means you are unlikely to get a terrible fund in your 401(k), but it also means you may get funds that underperform, have higher fees, or don't fit your financial plan. I frequently find that clients are better served by investing additional money in a Roth IRA.
The Roth question, whether 401(k) or IRA, comes down to taxes. Do you want to pay them now or in the future? Many professionals think this is a no-brainer, best to pay the taxes now and withdraw tax free, but I think it really depends on the client. Everyone is different and I think it comes down to a question of when you need the money. Do you need to lower your taxes this year? Then you'd want a traditional IRA.