Ruedi Wealth Management
Prior to working at Ruedi Wealth Management, Paul worked in the Financial Advisor Services department at Dimensional Fund Advisors, teaching advisors about the core investment philosophies behind Dimensional’s mutual funds and how to implement them in client portfolios. Paul started out working with RIA firms similar in size to Ruedi Wealth on the east coast, until about halfway through when he moved to a group that worked with some of the largest, most successful advisory firms in the country. He believes it was a great learning experience to see how these firms operate, and found it interesting that these larger firms didn’t really do anything special as far as serving their clients that smaller firms couldn’t do just as well, they were just better marketers and leveraged this to grow to such a large size.
At Ruedi Wealth, Paul helps produce educational resources (Radio Shows, Blog Posts, Newsletters, Seminars) and manages various marketing platforms like their company website, google marketing, event management, and social media accounts. He loves the fact that this work can be done almost anywhere and involves a certain amount of creativity. Like everyone at Ruedi Wealth, Paul enjoys what he does because he really feels like it helps people. Even if people read his blogs and listen to their radio show and never become clients, he still feels like he has made a positive impact on their lives by providing them with helpful perspective on complex financial issues.
BS, Finance, Miami University
Assets Under Management:
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Yes, you can save too much and you may have already, though it is impossible to know if you are without crunching the numbers as part of a goal-based financial plan.
It is a great "problem" to have, and fairly common among frugal people who naturally have high savings rates like you and your wife. If you already have more than enough saved to put you on track to fund all your future financial goals and continue to save at an excessively high rate, you are needlessly sacrificing your lifestyle now, while you are young, in order to end up the richest person in the graveyard!
This is where a financial plan can be extremely helpful, to let you know how much you should be saving and in which accounts. If you aren't sure the exact amount you need to save, in which accounts, and in which type of investments, it is only natural that you would worry that you are saving too much or too little. There are a lot of moving parts to your financial situation, but a financial plan will make financial decisions like how much to save pretty straightforward and based on what it takes to achieve your most important goals.
My recommendation would be to skip the stock trading as you are more likely to cost yourself than help yourself investing this way. Trying to outguess the market and pick the right stocks at the right time is a fool's errand - a much more reliable approach is simply to grow your wealth by investing in stocks using a handful of diversified, low-cost index funds or ETFs. It's simple, more reliable than picking stocks, and takes almost no effort.
I tend to caution young people against owning bonds, as they have the time horizon and capacity to ride out any short term bumps in the stock market and can benefit from decades of compound growth. Considering you are only 26, bonds are probably only a good idea if you have a short term goal that you will need the money for that you don’t want to put at risk in the stock market. Since we don't know what the stock market will do over short periods, you don't want to get caught having to sell stock holdings while they are down to fund a goal that is only a few years away.
If you are going to invest in bonds to save for a short-term goal, you should probably do so using a diversified, low-cost bond fund as it will allow you to more efficiently spread your money around than you could by buying individual bonds yourself. Make sure the bonds are short-term and high quality – longer term, lower quality bonds can bounce around quite a bit and can leave you at risk of having to sell holdings while they are down.
I’d skip the penny stock picking and invest in a diversified stock portfolio using low-cost index funds or index ETFs
You can open a brokerage account at Charles Schwab – I believe the minimum amount you need to open an account is $1,000, but they will waive that if you set up monthly recurring deposits of $100. I took advantage of the recurring deposits option when I had just graduated and could only invest small amounts each month.
If you are investing in small chunks, you will need to be conscious of transaction costs. A $5 charge to buy an index fund or ETF doesn’t sound like a lot, but if you are only investing $100 at a time it’s a solid 5% haircut every time you invest – better not to build that cost into your investment program. Fortunately, Schwab has great index funds and index ETF options that you can buy with no transaction costs: https://www.schwab.com/public/schwab/investing/accounts_products/schwab_index_funds_etfs
It sounds like you are on autopilot with your investments for the foreseeable future.
That being said, what a financial advisor can, and should, do for clients goes well beyond just advice on your investments. They can save you the time and energy involved in managing your own finances, prevent you from making costly mistakes, and last but certainly not least, build a financial plan based on your goals that will guide your financial decisions. I could see any one of these services being worth .30% – if each one is worth that to you, then it’s a no brainer. It all depends on how much value you personally get out of the relationship. Just for reference, a typical advisor charges closer to 1% of assets for these services; our clients pay our fees with happy dollars as they feel the value we provide to their life is worth multiples of what we charge.
I recently had a friend in a similar situation (investing in index funds on autopilot) ask me this same question. He has more money than he will ever spend, doesn’t react emotionally to market swings, invests in a globally diversified index fund portfolio that he is comfortable with, and doesn’t mind taking the time to manage his own finances. For him, it was probably not worth it to use their services.
Perhaps you could give it a try and see if they can create enough value for you to justify the fee? If they don’t, opt out and save the fees.
I would highly recommend becoming a CFP® Professional as soon as possible. When I entered the financial planning profession, I had a great background in investments and some knowledge of retirement planning, but much like you I felt a need to gain more expertise in other areas of financial planning like estate planning and tax planning. Taking the courses and preparing for the exam filled in the gaps in my knowledge in all the areas of financial planning and I imagine it will do the same for you. It will also give you a better understanding of how all the different aspects of financial planning interact and how you need to consider everything to do truly comprehensive financial planning. Once you are allowed to use the designation it will provide you with credibility that can be crucial to your success as a young advisor.
As far as tips for a beginning advisor – Nick Murray has some great books on the craft of financial advice. All of the advisors at our firm have read several of his books; Behavioral Investment Counseling and The Game of Numbers are a couple of my personal favorites. He publishes a great newsletter for financial advisors as well.