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:
In my practice, I generally position most bond funds in tax-deferred accounts like regular IRAs since the money grows tax-deferred. However, if you plan to use the short-term bond fund as a source of emergency money, then you could also add it to your brokerage account where you can access those assets anytime you desire. The last account I would use for any bond fund, not just a short-term bond fund, is a Roth IRA. A Roth IRA is one of the very best retirement accounts available and because assets in those accounts grow tax-free, you generally want to use growth-oriented investments in those accounts such as equities.
I also think equity funds like an index fund and/or even actively managed stock funds are better positioned in brokerage accounts because capital gain rates are generally lower than ordinary income rates. This may not apply to all taxpayers, but it may for most. Positioning bond funds in brokerage accounts subjects you to interest income, which is taxed at your highest ordinary tax rate. However, if you wanted to invest in a bond fund in a taxable brokerage account, then you may want to consider using a tax-free bond fund. There are many short-term tax-free bond funds available to purchase. This could be a solution depending on your tax bracket.
In summary, I like growth-oriented investments in Roth IRAs and brokerage accounts, and bond funds in IRA or tax-deferred accounts. However, the positioning of asset classes will depend on how much you have each of those accounts. If all you own is a brokerage account, then you will need to own bond funds to make sure you have adequate diversification. You could use taxable and/or tax-free bond funds.
I hope the above helped. Good 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!
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!
This is one of these life events that call for a detailed overview of your situation. The successful sale of your company is a real achievement. It appears this sale put you in a strong financial situation and may afford you the chance to live very comfortably for the rest of your life and the life of your family if you plan appropriately. At this point, I would not worry so much about the stock market reaching all-time highs as I would establishing a game plan for the rest of your life. The game plan includes mapping out whether you plan to never work again, how much income you will need, and making sure you have retained the services of a competent CPA, financial advisor, and an attorney to name a few. This team of professionals will be helpful to you going forward.
Depending on your goals and objectives, and more specifically, your annual income needs, you may not have to have as much exposure to riskier assets like stocks than you think. There are a number of ways you can invest this money that will help sustain your standard of living for the rest of your life. You could establish a globally diversified investment portfolio that includes a number of asset classes like stocks, bonds, cash, or even annuities, which I do not particularly care for. In other words, you could take some of the money and generate a lifetime stream of income that will last the rest of your life using an immediate annuity so you are not entirely dependent on market returns. Again, I do not believe you need to take as much risk as you think necessary given the size of your assets, but this depends on your long-term income needs. You could live another 45 years plus so you want to be sure that any strategy considers a long-term life expectancy.
It may also make sense to interview at least three to five financial advisors before making a decision to hire one. You want a firm that will work with you and guide you prudently. You do not want to use a firm that wants to sell products as your solution(s). Be very careful and obtain referrals from other professionals. Please visit the CFP web site--CFP.net and try to find fee-only advisors.
Take your time and do not make any quick decisions. This is a time for personal reflection and goal setting.
I wish you the best of luck!