Sorry that this forum is full of worthless snarky *******s like Brian. Despite his sarcastic response, I don't think your best option is to hire an advisor/money manager. I recommend you go to bogleheads dot com and join that forum and read the wiki they have there. It will be kind of overwhelming at the beginning, but spending twenty hours or so over the course of a month understanding the basics and reading the answers to your questions (which have been asked and answered a hundred times there) will definitely be worth the time and definitely worth the alternative of paying tens of thousands of dollars to an advisor.

What you're likely to figure out during your time there is that advisors are a waste of money for someone in your case. Your ideal portfolio at this point is going to be something like 75:25 VTI:BND. The higher your risk tolerance, the higher that first percentage. Bogleheads will also likely suggest an international allocation, so something like 65:25:10 VTI:BND:VEU. I don't bother with international allocation because I think US companies like Exxon, Coca-Cola, McDonald's, etc., are international enough to give you that exposure. I guess if Toyota cracks self-driving or Samsung solves AI you'll wish you had VEU. Anyway, it's that sort of simple, two- or three-fund portfolio that you should aspire to. But once you come to that conclusion, don't just sell everything you currently hold because there are tax consequences for doing so. I have no idea how much money you have or how much money you make, which strongly effect the tax situation. If you only have 50k in equities and you have no income, you could sell everything and go right into the simple portfolio. (The first $44k of long-term capital gains is tax-free, plus the standard deduction is $13k.) Otherwise, you'll have to scale out of your sub-optimal holdings over some number of years. Paying a .88% expense ratio to invest in the dumb crap in ARKW is not a good choice; I don't recognize any other ETFs you listed besides VOO VTI and QQQ, and the .2% expense ratio on QQQ is high and probably needless because I assume it holds basically the same stuff as VOO.

All a financial advisor is likely to do is take 1% of your assets every year (which REALLY adds up) and put your money in something equivalent to what I recommended, except they'll use way more ETFs or mutual funds to make it look like they have some complicated special sauce (and they'll handwave away any questions about the needless complexity by saying the complexity is for diversification, when many of the ETFs are just redundantly holding the same stocks) and they may even put it in ETFs that have higher expense ratios because those ETFs pay them a commission.

Alternatively, you can just call Vanguard and explain your situation and open a target date fund for whatever year you plan to retire. You won't learn much or really know what's going on, but it's better than going the advisor route. I recommend Vanguard because they have very low expense ratios on their ETFs and are reputable. Fidelity is probably also fine.

Disclaimer that I'm not a lawyer or fiduciary or whatever other type of person who's often a self-serving scumbag but is legally allowed to give out advice that is usually worse than the advice that I give out.

Although long-winded, you left out a lot. For instance having multiple 401ks (instead of rolling them into an IRA) is a mistake. We can't assume that his other investments are in non-taxable accounts and holding BND in taxable accounts would be a stupid mistake. Holding a target-date fund in a taxable account would also be a ridiculously thing to do. Not mentioning what accounts he should use to hold foreign investments (should he choose to do so) is a very major oversight.

That is why, in general, it is better to not come here for actual financial advice.

I do agree that he doesn't actually NEED a CFP or CFA. He does need something better than off-the-cuff far-from-optimal advice though. He should probably be made aware of the fact that there are fee-only advisors instead of pretending (or simply not knowing) that no such thing exists.

You agree he doesn't NEED a CFP, but he OUGHT to and if you were him you'd hire one IN A HEARTBEAT?

I think incorporating Somi's advice and adding your subsequent tips to roll into IRA and keep your bond exposure there is pretty sufficient given AP's vanilla financial situation... certainly a better route than paying exorbitant advisor fees to do the same thing. Superior to paying a fee-only advisor as well imo, but agree it's good for AP "to be made aware of the fact" that they exist, if he didn't already.

Thank you. I'll definitely take a look as I was completely unaware of Bogleheads. I feel like Reddit, 2p2, and most of the internet has similar advice regarding low expense funds, and reducing costs, and haven't been able to find much actual discussion on the other side of the advisor argument. That said, I'm starting to believe that the folks who really benefit from high net worth money management / planning - probably aren't on Reddit discussing it in detail. Once in a while you'll see someone with a successful tech startup exit asking what to do with ~10 - 20M, but it's not super frequent.

My situation is not that - to be clear - however I've been working in tech for almost 25 years - in an extremely expensive market - so the amount is enough to get me personal attention at financial institutions, but not the top tier, $5M+ attention.

The other piece I think often goes undiscussed is that costs and direct investment returns aren't necessarily the most important thing (as you elude to). I'm paying about 50% in taxes between federal / state / NII - so an investment strategy that can help defer / eliminate taxes may be worth paying for (I've maxed out the 401k for years, and am waiting for a down earnings year to contribute to the ROTH given the tax situation).

I mostly agree - however some places have access to better institutional class funds than you can get as a retail investor (it was definitely the case during my short stint at a financial institution). In this case you're right - I was lazy. Now 2 of my former 401ks have been rolled over into an IRA, however I've left a 3rd as a 401k at the same institution as I liked the funds, there was no additional cost / fees - and no better alternative. My final is a current 401k at a different institution which I have the standard limited control over based on the employer rules.


In general, I'm not COMPLETELY inept, but as I said - over the years I've found these forums to be frequented by some very smart folks who's analysis approach I've appreciated (present company included obviously as I appreciate everyone offering their time to help, regardless of snark).

The challenge remains - it's obvious to me, that there's a lot to be gained from someone who goes beyond simply placing your money in various funds. Whether that's recognizing areas to optimize ("hey - you have $500k sitting in cash for a downpayment - maybe consider an allocation across a double exempt muni ETF and a treasury ladder to avoid some taxes depending on your timeline") - or identifying ways to reduce your position in a stock ("maybe sell covered calls on this stock you want to reduce exposure to - that way you make money on the call - and if they sell - you reduce your exposure").

The challenging part is where to actually get that advice (CPA, CFA, CFP, forums, books, etc.) - and how much it's worth.

It's just a lot!

He doen't NEED a landscaper, but he ought have one (assuming his lawn looks like his portfolio and choices of account types),and I'd hire one in a heartbeat if I wasn't particularly interested in landscaping.

We don't actually know whether his situation is vanilla. Not enough information was given. We don't know how he's behaved during the last few bull and bear markets or if he has plans ahead of retirement or a gazillion other personal details. We don't even know his tax rate or his amount saved in various accounts or his expected tax rate in retirement.

I agree that it saves money if you do everything yourself and it is always best to not spend on services. Earlier today I was threshing wheat and tomorrow I am going to fashion a stone to grind it into flour.

He shouldn't need to pay for much in the way of a financial plan (assuming his situation is vanilla). If he goes the super expensive wealth management route with Vanguard, they charge 0.30% per annum and he probably doesn't even need that (I'm assuming he doesn't need any hand holding during market dislocations here). And he'll get to say things like, "well, my wealth manager takes care of the details you know [snooty laugh] ha ha[/snooty laugh]>" between chukkas.

An advisor would have told you about backdoor Roth IRAs years ago and have helped you decide whether it is the correct route for you.

Hiring someone to figure out tax minimization (a CFP, most likely) makes a ton of sense for you. Or, you could take a year or two off from actually earning money to learn all the details.



You can get the same or lower fees in ETF form in an IRA in most cases. Unless you really like a certain mutual fund over anything available in an ETF, of course.




It isn't an issue of being inept, or a lack of ability to become ept. It is an issue of how much your time is worth and your bandwidth to deal with both the big picture and the details.

That's kind of the point of a rando asking for investing advice on a message board -- we trust he is disclosing the relevant details of his financial situation. If he has complex trusts and annuities he didn't tell us about, that'd be on him.

The point of bogleheads or socking money away in 75/25 vanguard funds or target retirement funds is you don't behave variably in bull/bear markets. you just invest and forget. if you are liable to get cold feet in bear markets then sure, maybe pay someone to hold your hand and don't do that (though that's no guarantee, ime advisors go which way the wind blows and are equally susceptible to herd mentality).

I don't know my expected tax rate in retirement and neither do you.

Yeah because paying someone to invest your money in index funds and skim 2% off the top is the same as paying someone to thresh wheat or fashion flour grinding stones.

I don't know what this means but seems you're just being intentionally obtuse and good riddance

i dk this isn't even wrong. certainly there are people good at their craft and it's not worth the time to sink a few hours to read about basic investing advice. it's more the spirit of AP coming to a rando board saying "what should i do?" and "i'm wary of paying anybody -- even my friend who i trust fully -- any money for investment advice" and offering "just pay them they're ****ing gardeners and you suck at gardening".

but if that sounds like the most appealing route to AP, by all means.

2%? That would be silly.



I can explain further: 0.3% is a smaller number than 1%.

I think you're overestimating what an advisor would do for you. I assume some exist who would be watching your holdings really closely and checking in with you periodically to see if you're thinking of going back to school or getting a new house or making deductible purchases or a million other things that could potentially be relevant, but I think that would be very expensive. It's not quite the level of a personal accountant, but I think it's beyond what the vast majority of advisors do. I think even the ones charging 1% are spending very little effort. People I know who have their money managed, despite my entreaties, are just having someone rebalance occasionally and do withdrawals (click a button) and send tax documents (click a different button). Ask your friend or brother or whoever it was for some potential advisors and call them and ask if they even tax-loss harvest for clients. I doubt they do, but maybe I'm wrong. My thinking is along the lines of: if someone is smart and savvy and willing to put in effort, why would they be a low-level advisor to nobodies with seven-figure net worths instead of running their own fund or doing something else more lucrative. As others have said, there are fee-only advisors, but I doubt they're better than the advice you'll get on bogleheads.

I should have included something in the last post about making sure the right holdings are in taxable vs non-taxable accounts.

Last thing I'll say is that this endeavor (personal finance) can be empowering and useful, but it can also really eat up your life. There's always another thing you can learn about (should I be buying I-Bonds; what about these Opportunity Zones?), and your mention of selling calls to try to save on taxes would worry me (if I cared about you) that you'll venture into trying to find alpha and end up getting your ass handed to you in addition to losing so much time. Or you start following some Fintwit guys or whatever. It can be a huge rabbit hole. I'd just keep it as simple as you can, and if you make a few small mistakes or don't want to bother trying to save a few hundred dollars by tax-loss harvesting or setting up a ladder instead of buying a fund, don't worry about it.

Thanks for the thoughtful response. With regards to the discussion around my situation - it's pretty vanilla.

- Retirement Accoutn Assets
- 401ks / IRA (~25%)
- Zero Roth Savings

- Liquid, after tax assets
- Cash (earmarked for another home purchase - which has been sitting as cash for 6 years - massive leak #1) 24%
- Index funds (VOO, QQQ, MTUM, SCHB, SCHM, VTI, ARKW) 30%
- AMZN, SFDC, GOOG (21%)

I don't trade basically at all. I've sold one ETF since 2015 and that was ARKK (as I just wanted less Cathy Woods in my life).

Even finding competent folks who offer this type of service to figure out what "super expensive" really means is a challenge. Clearly if there's someone who could help make/save $25k /yr. would be worth paying $10 - $15k - but again - finding them is tough. Who do you think these folks are? What do you think they charge?

My friend is the one who mentioned this as a service of on of his "high net worth advisors" functions (which to be honest I'm not sure I even qualify for as I believe thinks I have more than I do). That said, my long standing belief is that most advisors are minimal touch - as the goal is to get as much money under management as possible - not to drive the best returns possible.

I feel like this was rhetorical to some extent - but running a fund and running an advisory business are very different skill sets and roles. My friend has been doing this for years, and owns his own advisory firm. As other advisors have retired, or changed directions, he's bought up their books of business and built an extremely nice life. Predictable, stable, low stress, high income. He's no Bobby Axlerod, but I can defintiely see the appeal (particularly when compared to living in the high stress, higher BS tech world)


Fwiw - the idea (not mine) - what just to sell calls on a stock which I own too much of (due to never bothering to sell ESPP / RSU / etc.) and would like to reduce my exposure to. It wasn't a tax thing - just a clever way to reduce exposure over time. If you make money on the calls which go unexercised - great. If they exercise and you unload some shares - also great.

What you are doing when you sell a covered call is giving up all (if strike = current price) or some (if strike > current price) of the upside in return for a premium and keeping all of the downside exposure.

I assume that you would like to reduce your exposure because you don't want the downside exposure. If so, selling covered calls doesn't fix the problem.

Apologies if you are trying to reduce your upside exposure. That would be kind of weird though and I'll have questions if that is the case

AP, the general consensus here is that doing it yourself is better than paying an advisor, but the people who believe this believe all advisors charge 1.5%-2.5%, passive investing beating active investing in their arbitrary timeframe in the past means that it will continue, all advisors are focusing on finding new business and not managing money and reading 20 hours of articles online will allow someone to learn everything an advisor knows regarding retirement, taxes and estate planning - all of which is false.

If your friend has been doing it for 10+ years, isn’t at a bank or insurance company and owns his own company (as you said) I would guess he is likely worth what he charges.

So if you can make $10 selling a $1M call option on a $1 stock with a negligable % chance to go to $1M - might it not be worth taking on all the downside risk and giving up all the upside?

Obviously this is an extreme example - but somewhere between this and reality there are reasonable approaches to selling call options to maximize your return on a stock you own and are looking to reduce your exposure to.

You probably should have a Roth IRA or do a backdoor Roth IRA

Funds/stocks that pay dividends you want them in tax advantaged accounts

If you "basically don't trade" (Saw mention of options trading??? That's trading...), then you probably shouldn't bother owning individual stocks and you definitely don't need so many different funds

You want broad market funds like VOO or VTI. I don't think there's even a point to owning both at same time anyway. Should probably just pick the one with the lower expense ratio

Look into tax harvesting

You might also want to look into a health savings account

Some of this may make sense for you but it depends on more specific and personal information. Also risk tolerance and time horizon. Good to learn this stuff on your own but this would be why you pay wealth manager. I suspect you suspect you have leaks (you've identified some already) which suggests you might want someone helping you not just with understanding it all in more depth, but with the actual planning and transactions

For example, had you paid an advisor to tell you what to do, you'd at least be earning interest or a return of some sort on nearly 1/4th of your assets for the last 6 years...Now just imagine the mistakes you're currently making that might be immediately identified...

You get exactly all of the downside plus $10 minus a miniscule amount of the upside in your example.

No matter the strike you pick for the call you sell, you get the premium minus some amount of the upside plus precisely all of the downside exposure.

There is a stock price range where a covered call will be more profitable than either simply selling the stock (at the time you would have sold the call) or simply holding the stock. It is trivial to calculate that price range for any strike. It is not trivial to figure out the probability that the stock price will be within that range at expiration of the call.

AP it’s difficult to think about how much better off you’d be if you started with your buddy 5 or 10 years ago. If you want to make the same mistake over the next 5-10 years too that is fine, but I think you will figure out before year 10 the mistake and start working with him.

I forgot to add that what you should do is spend 5 or so years researching the ins and outs of "short risk reversal trades on long positions in individual stocks" while holding your oversized allocation to your company stock. This would be ideal, but you will want to do your research starting about 5 years ago.

Or, you could just yolo covered calls at random deltas and expiration dates. It might work and it isn't really yolo-ing your life's savings. It would be random though, which can be fun. Rolling 2 month covered calls at 30 Delta closing the call at two weeks from expiration might be exhilarating for you!

Or you could do the extremely complicated thing and just sell the unwanted portion of the company stock and buy an index ETF. That would entirely solve the problem, but really doesn't sound like it would be any fun.

Hi all,

Venturing into buying my first home and looking for advice from folks who have done it and had investments.

I have a good amount in savings and more
in investment accounts. Looking to spend around 1/2 of it all on the house. Question is should I keep the investments and borrow (from lender or parents) / pay a mortgage at 7% or sell some of my investments and just pay cash for the place?

One option I make the maximum from the market but have a loan and the other I don’t have a debt but make less from the market (and have a smaller life/poker roll).

Thanks,
DT

You'll have a tax hit if you liquidate investments over the cap gains threshold for tax. It might make sense to take a pledged asset loan or line of credit on your brokerage account but that will likely run about 8-10% APR. If you can get beneficial terms from your parents/can afford the debt service, I'd consider doing that. You can always slowly liquidate investments to pay down principal and save the taxes over years if you need.

I am considering selling a small portion of my investment portfolio to increase my down payment on a home and reduce my monthlies. I don't want to get hit with a capital gains tax. How do I sell my shares to avoid this? Highest price first? Most recent first? Thanks!

Some more specifics may be required, but generally you want to start by selling shares that you have held for more than 366 days, which will be taxed in the long-term gains bracket, whereas shares that you haven't held that long will be taxed in the short-term gains bracket.

I believe many brokerages default to this (it's called FIFO: first in, first out)

Thanks!