Miracle Mile Advisors
Sara Rajo works closely with clients to design and implement customized investment plans based on their unique needs. As Investment Advisor, she constructs detailed investment and cash flow models, asset allocation recommendations, wealth transfer structures, pre-transaction planning recommendations, and a variety of other life planning strategies. Sara has been recognized by Forbes as one of America’s 200 Top Women Advisors.
Prior to joining Miracle Mile Advisors, Sara worked as an analyst at a global talent agency in the business affairs and client services division where she assisted the principals in modeling financial plans and agency agreements.
Sara received her Bachelor’s Degree from the University of California Los Angeles, Dean’s List. She holds the Financial Industry Regulatory Authority (FINRA) Series 65 securities license and active life insurance license in California (CA #0L20841). In Los Angeles, Sara is involved with CFCC (Commercial Finance Conference of CA) as a board member of the Young Professionals Group. Sara is very involved in philanthropic causes in Latin America. She is also actively involved in Big Brothers Big Sisters of Greater Los Angeles and Step Up Women’s Network. Sara is fluent in Spanish and conversational French.
BA, University of California Los Angeles
Assets Under Management:
Roth IRA’s are one of the best types of retirement savings accounts that exist. The money you put into a Roth IRA grows tax free, and when you start taking money out of the account later in your life, it comes out tax free. On top of that, there are no required minimum distributions from a Roth IRA, meaning that you are not required to start taking money out of it at a certain point if you don’t want to. You can let the assets grow in the Roth IRA tax free for as long as you want.
You have already opened a Roth IRA, which is the first step in the right direction! The next step is to continue saving each year by funding it with as much as you can up to the maximum. The maximum you can put into it each year at your age is $5,500. However, if your earned income is less than $5,500, you can only contribute up to your earned income. For example, if you have $2,500 in earned income this year, the most you can contribute to your Roth IRA this year is $2,500.
The more you can save the better, so I would try and contribute as much as you can each year after you cover your living expenses. With the money in the account, I would recommend buying a diversified, low cost index fund.
Usually, you do not start taking money out of a Roth IRA until you are 59 ½ to avoid paying penalties. However, there are certain exceptions to this rule that allow you to take money out of your Roth IRA before the age of 59 ½ without penalties for things like buying your first home or paying for college. Make sure you talk to someone about the specifics however before withdrawing funds, so you aren’t hit with any penalties.
Hopefully this was helpful. Feel free to reach out with additional questions.
First, you should consider if you will need those funds in the short term to buy a house, car, etc..., or if you are planning to invest that money over the long term for retirement. If you will need the funds in the near future, it is best to stick to less risky investments such as bonds/bond funds or even CDs. These types of investments will generate lower returns than you could get in the stock market, however the returns are generally higher than letting it sit in cash in a bank account. Investing in the less risky assets will also help ensure you have the funds available when you need them.
If you are planning to invest over the next 30 or 40 years for retirement, investing in the stock market is your best option. Instead of buying individual stocks, a good idea is to purchase Exchange Traded Funds (ETFs) that track stock market indexes. These ETFs give you exposure to an entire market sector such as large cap, mid cap, and small cap US equities, as well as international and emerging market equities. ETFs are passive, low cost, and tax efficient investments that generally perform better than actively managed funds over the long term.
The short answer is no. The investments in your 401(k) can perform just as well as the investments in your personal brokerage account if invested in a similar manner. The benefits of investing through your 401(k) are that the matched 3% is essentially “free money” and your investments will be tax deferred. By investing in your 401(k), you not only get an immediate tax deduction because your taxable income is reduced by the amount you invest in your 401(k), but that money gets to grow tax free and benefit from compounding interest until you withdraw the funds. This is different than in your investment account where you will have to pay taxes on realized capital gains and dividends each year, thus reducing the amount of assets earning interest. It is also important to remember that in most cases you cannot take funds from a 401(k) before age 59 1/2 without paying a penalty. If your goal is to save for retirement, then investing in the 401(k) is the better option due to the employer match and tax benefits.
Exchange traded Funds (ETFs) are a great way to get diversification with a small amount of cash. Exchange traded funds are pools of securities that anyone can buy into giving them exposure to a portion of many different companies. Each ETF has a target size, industry, country, etc. that it focuses on, and by investing in that ETF a small investment can have a piece of each part of that sector. By buying a few different ETFs from different sectors a small but highly diversified portfolio is able to be achieved.
When looking for what ETF to invest in make sure to look for a low expense ratio so that the management of the fund is not costing you too much money.
As long as a financial advisor has included a disclosure in their ADV then they have permission to trade derivatives on your account.
As far as risk management, derivatives can be a great tool for guaranteeing prices or keeping concentrated positions safe from sudden drops in the underlying security’s price. For business owners who want to lock in a price of an import or export of a commodity, derivatives can be crucial for reducing risk by providing protection against price volatility, especially if working capital is a major factor. As well, a concentration in one equity can use derivatives to secure a price point, especially through a multi-year liquidation process.
Of course when using derivatives any advisor would have to keep a close eye on the position and be able to make adjustments as needed.