Millennial Wealth, LLC
Co-Founder, Chief Compliance Officer
Chad Rixse spent 3 years in the bank-run private wealth management world working primarily with high net worth families and individuals. As much as he enjoyed helping this demographic, he realized that many people, particularly those from his generation, were far too often left behind.
Chad wanted to change that.
Chad's mission in life has always been to help others. As a child, he wanted to become a doctor because he found that helping others was such a rewarding experience for him. Although the medical field did not become his path, he's found another way to fulfill this mission.
The truth is, Chad believes his generation faces a unique set of circumstances. They live in a digital era surrounded by technology and a constant stream of information. Many of them are college educated and burdened with student loans. They lived through, and very well remember, one of the worst financial crises in history. Plus to top it all off, they were taught very little in school about healthy financial habits and preparing for the future.
None of this sat well with Chad. As a Millennial himself, he has experienced many of these struggles first-hand. He knew he had to act. He knew he had to actually do something about it. When he found Levi, it quickly became clear how he was going to make that happen.
BA, Spanish, University of Washington
Assets Under Management:
If you have $20k in savings account already, I'd recommend moving that over to a High Yield Savings Account like what American Express offers (https://personalsavings.americanexpress.com/high-yield-savings-account.html?extlink=ps2017=searchbranded-CampID-10705730-REF) so you can be earning higher interest while still keeping it liquid, insured, and principal protected. You could also open a Standard Brokerage account at some place like Vanguard (https://personal.vanguard.com/open-account/oax/app/triage#/) and put a portion of the funds (I would not put all due to being on a fixed income and unable to work) into a very conservative municipal bond fund. Vanguard ETF's are very low cost, and municipal bonds provide a stated coupon (interest rate) that is earned tax-free. Either of those options is going to give you better earning potential than just leaving it where it is now.
If you are adding to your savings and paying off your credit card every month, you are not overspending. The average American doesn't even have $1,000 in savings, you have $11k. This is very good! It appears your living expenses are quite low since you do not pay rent and have very little debt. A good rule of thumb is to have at least 3-6 months of living expenses saved in case of an emergency or if you lose your job. From what you've provided, this seems to be the case. I would focus more on automating your savings habits. You can do this by first tallying your regular average monthly expenses as you listed above such as gas, groceries, etc., then determine how much you have left over after that each month. Take half of that leftover amount and have that automatically going into your savings account or something like a Roth IRA (up to $5500/yr limit) every month. The other half leftover, you can spend however you please. Here's a Net Income/Expense Worksheet you can use to help you do this. Congrats on having some solid savings already at age 22!! Best of luck to you :)
Yes sir, it most certainly is! You can withdraw funds from retirement accounts penalty-free at age 59 1/2 so you are good to go there. You'll just have to pay ordinary income tax on it is all. If you are not working now and need the money, I'd suggest talking with your advisor (if you have one) about repositioning the investments in that account to start generating income for you. This will allow you to preserve the principal for a much longer period of time than just taking a chunk of the principal out. Hope this helps!
Go with the Roth 401(k) option. There are no income limits on Roth 401(k)'s and current total annual contribution limits to 401(k)'s is $18,000. You can split this up however you want between the traditional portion, the Roth, or just one or the other. Roth IRA's have income limits for contributions. If your tax filing status is single and you make over $133k/yr, you cannot contribute to a Roth IRA at all, which is where the backdoor piece comes in. However, both Traditional IRA's and Roth IRA's have an annual contribution limit of $5,500. There is no escaping that. In order to do the backdoor Roth, you'd have to make your contribution to the traditional, not deduct the contribution on your taxes, then convert to the Roth. This is a lot more messy than beneficial. With the Roth 401(k), you get all the benefits of a Roth, can contribute far more, and don't have to worry about the tax piece other than that it won't be lowering your federal gross taxable income.
Tricky question. If you can have your debt paid down in 2-3 years, I'd say you are better off sticking with that plan and using that additional capital once your debt is paid off to invest. BUT, it really depends on what the interest rates are on your debt and how much that really costs you over time just making minimum payments. If your debt is super low interest, you're probably better off participating in the market. If it's very high interest, get it paid off because it costs too much. Another option could be to stick with your current plan of paying it off as soon as possible but make sure you are contributing up to the max your employer will match in your 401(k). This ensures healthy 401(k) contributions while still tackling your goal of being debt-free.