Bloom Asset Management, Inc.
Jack K. Riashi, Jr., CFP® has been with Bloom Asset Management since 2002 and has been an active member of the firm’s Investment Committee since inception, which is responsible for setting investment strategies and selecting approved securities for client portfolios. He provides a wide range of financial expertise including personalized investment management, asset allocation, and comprehensive retirement planning. Jack has been featured as a financial expert for the Detroit News' Money Makeover series and has been a frequent guest on WXYZ-TV Channel 7 Action News providing financial advice and market observations. He has also contributed numerous articles for the firm’s website, MoneyTalk and MoneyWatch newsletters. Jack has also been selected as an HOUR Detroit Five Star Wealth Manager each year since 2011, an honor he works hard to achieve.
Jack has been serving clients in the financial service industry since 1987, holds the designation of Certified Financial Planner (CFP®) and is an active member of the Financial Planning Association. He is a graduate of Wayne State University with a bachelor's degree in finance and has been a featured speaker at many Bloom Asset Management seminars.
As a CERTIFIED FINANCIAL PLANNER™ practitioner, Jack has met rigorous education and ethical requirements and has gained extensive knowledge in the areas of financial planning, risk management, investments, income tax planning, and retirement and estate planning.
In his free time, he enjoys spending time with friends and family and is an avid golfer and cyclist. Jack is also very actively involved in his Church and has contributed his expertise in financial planning and goal setting to the Church’s Finance Committee over the years.
BS, Finance, Wayne State University
Assets Under Management:
You can use a variety of investment types or asset classes in your Roth IRA, especially through a discount brokerage firm like Fidelity and/or Charles Schwab. They have a variety of low cost no-load mutual funds and/or ETFs to use to construct your portfolio. The main point here is your portfolio. I only know about your Roth IRA, but you may have other investment accounts like a 401k, individual brokerage, or possibly even a regular IRA. You should view your Roth IRA as being part of your overall portfolio, and not just as a stand-alone account. I generally like having higher growth investments in a Roth IRA because it may be the last account you use for retirement down the road. Again, I do not know much about your personal goals and plans for retirement.
At our firm, we use an asset class positioning strategy and attempt to include certain asset classes in certain types of accounts based upon how they are taxed. For taxable accounts, we like to use more tax efficient equity funds like U.S. large blend, large growth, and large value. In IRAs, we like to use fixed income or bond funds, or less tax efficient equity funds like foreign and even U.S. small-cap funds. For Roth IRAs, we like to use foreign stock funds, emerging market stocks, and even global real estate funds. I do think combining a U.S. large growth fund with a foreign fund in a Roth IRA is a good idea. You could include a U.S. large growth, global real estate and an emerging market stock fund. But again, this account and the underlying investments should be considered within the context with your overall game plan for your portfolio. Too many investors invest by account and do not consider their entire portfolio. You should start with your entire portfolio, and then select the investments, and then determine what account make sense for each investment as it relates to your portfolio. Your decision making will improve.
With respect to performance, you certainly want to make sure the investments you are using fits within your strategy. If it is an actively managed mutual fund, then you need to check its history and other statistics to make sure it is appropriate. If you go the passive or index route, then that might be easier because there would be less of a need to check performance over benchmarks since they invest solely based on a benchmark. There are plusses and minuses to using active verse passive/index investments. But that is for another blog!
Best of luck to you.
The inheritance has certainly unexpectedly strengthened your financial situation and has given you an opportunity to become debt free. I personally do not care what interest rate you are paying on your mortgage because it pales in comparison to having no mortgage on your home. The positive monthly cash flow from having no mortgage payment for the next 27 years supersedes the tax benefits of the mortgage interest. You and your spouse will feel much better by doing so. You will still have about $620,000 left in cash after paying off the mortgage assuming you receive $800k. The cash balance can go toward investing, fully funding Roth IRAs, assuming your income qualifies for the full contribution, setting aside cash for a rainy day, or even purchasing a second home if desired, although second homes can become headaches very fast.
You have a great opportunity to strengthen your retirement savings if you decide to invest some or all of the cash balance. I also believe it makes sense to take some of the money and go on a nice family trip. Enjoy yourselves!
I also believe it makes sense to interview several financial planners/advisors to help you. This will be an excellent investment of your time. Just make sure they are "fee-only" advisors and not "sales-only" advisors. Advisors can help you define goals, map out an investment strategy, and help you with legacy planning (estate planning), and other financial goals.
In the end, you have a lot of financial flexibility to pay down/pay off debt, invest, and/or do both.
Good luck to you and your spouse!
You are way ahead of the average person in your age group. A job well-done is in order! It seems like you have done some planning to accumulate your assets, but like other advisors who've responded, it would be a good idea for you to work with a competent financial planner to help solidify your goals and help guide you in areas outside of your investment portfolio. From the figures you provided, it appears you are doing a great job of saving annually toward retirement. On the surface, your situation looks very strong and your future appears bright. However, I do not know any of your specific goals. Whether you are well-positioned for the future depends on when you plan to stop working and how much you plan to spend in retirement. This can be a very detailed process, but one well worth the effort. A good financial planner can help you here.
With respect to your asset allocation strategy, the only information I know is that you have 25% of your portfolio in stocks and 25% in cash. I do not know how your $1 million 401(k) is allocated. I encourage you to view your portfolio as one large global portfolio. Based upon your goals, I may not include the cash as part of your portfolio since you may need to use some or all of it toward a home purchase. You have the flexibility to have a small mortgage, but it depends on the purchase price of your future home, etc.
Your investment allocation should be geared toward your specific goals and eventual spending when you stop working. You want to make sure you have enough assets that last for many years, which means you may still require long-term growth. If that is the case, then you may need to continue having exposure to growth assets like stocks or mutual funds/ETFs that invest in stocks. Additionally, I believe you should have exposure to more stable assets like bonds to keep your downside under control in the event we suffer through some bad markets, especially if you plan to use some of your $500k in cash for a home purchase. There is no reason to have an aggressive allocation. Again, working with a competent advisor in this area can be very helpful. They can do a good job of assessing what makes sense for you.
A competent planner will also help you with estate planning and make sure you have appropriate beneficiaries listed for your assets.
In summary, keep up the great work! Best of luck to you and continue staying proactive!
Other than using a higher yielding savings account, you do not want to risk investing your $25,000 by investing it. If you are planning to buy a house in the next few years, then the $25,000 can be used as part of the downpayment. You may need to come up with additional downpayment money but it depends on the purchase price of your future home. In other words, if you are planning to buy a home for $200,000, then 20% (down payment) would be $40,000. You are short $15,000 of that 20% downpayment so you should consider adding additional savings to reach the 20% downpayment goal. You may be able to put less money down on a home, but working toward 20% is a good start.
If you want to earn higher income on your cash, then I would recommend establishing an online savings account at American Express Bank, Synchrony Bank, Ally Bank, etc. Most of those online banks are yielding about 1.60% or more. You can link your primary checking account to those accounts. There are no minimums and literally zero fees.
You have zero debt, but I'm not sure of your other living expenses. However, since you live at home, they are probably low. You may want to consider establishing a Roth IRA, which is a great retirement account to help compliment your 401(k). You can contribute up to $5,500 per year and the money grows tax-free. It is a powerful retirement account. If you have the cash flow to make the maximum, then I would strongly encourage you to do so. You can establish a Roth IRA at a discount broker like Schwab or Fidelity. At some point, you may want to target 10% toward your 401(k) or even higher. However, if contributing 8% to your 401(k) allows you to contribute the maximum to your Roth IRA, then continue contributing 8% to your 401(k).
Lastly, make sure you have a sound investment allocation, with a fair amount of exposure to growth assets like U.S. and foreign stocks, using high-quality mutual funds and/or exchange-traded funds. You are young, and should be able to withstand greater volatility than most meaning you have many years to make up for losses in your portfolio should your portfolio suffer temporary setbacks.
Best of luck to you!
Hello, I think what you are doing with your employer 401(k), by contributing 15% of your compensation, is great. Targeting 15% or more is ideal for building a sound retirement portfolio. Hopefully, they provide a match, or even better, have a Roth option. Just make sure your 401(k) is allocated properly, with a nice mix of growth and stability. Since you are relatively young, you should have a sizeable portion in growth (U.S. and foreign equities, among other areas).
With respect to your savings, I would strongly recommend you consider establishing an online savings account with an online bank such as Ally Bank, American Express or some other FDI-insured bank. Many of them offer yields of 1.50% or higher these days. There are a number of them to review, and you can use this site for due diligence:
I've always found Nerdwallet to be helpful. You can open an online saving account with no minimum and link it to your primary checking account where you can transfer into and out of anytime you like.
Caveat: I would keep enough in your checking account to pay bills though, and not transfer everything to an online savings account. You should earmark a specific dollar amount each month toward your down payment or other goals. I view savings accounts as monies for emergencies, but you could certainly carve out a portion for a future down payment on a house.
Hope this helps you out! Good luck!