I have been overseeing approximately $500k in an old IRA and a brokerage account with E-Trade, in addition to my company 401k. I also have around six months’ worth of income in a high-yield savings account, which could last about a year if needed. While I have used CDs before, my savings are currently yielding the same or better than recent CD rates.
I keep encountering information about wealth managers, but when I hear about the returns a friend of mine is getting, it makes me question their value. Am I overlooking something? I am a buy-and-hold investor with stocks and ETFs, so I’m not dabbling in crypto.
I am planning to sell some other assets soon, which will add another $1M or so to invest. However, I don’t see how this would alter my current strategy.
At what point and for what reasons should I consider paying someone else to manage my investments?
Yes, something is missing from your life. Personally, I doubt you will need one. But a lot of people don’t know anything about investing or managing their finances. They are the ones in need of assistance. An advisor only needs to outperform the client’s investment strategy—beating the market is not a difficult feat.
No. Continue using inexpensive ETFs. It is impossible for a financial manager to beat the market. They are mostly used for tax planning, wealth preservation, harvesting tax losses, etc. The costs won’t be justified if you don’t require this.
Exactly. Passive investing tends to outperform active management over time. So, take a deep breath and put your money into a low-cost, well-diversified ETF.
Without a doubt, you need expert assistance with accounting, taxes, and legal matters. In terms of investment strategy, I don’t believe the math really changes at 10M. Maybe you want to reduce your risk a little bit, but that should really just mean holding more bonds rather than stocks.
It really depends on how complex your assets are. Do you own multiple real estate properties in different states? Or have a self-directed IRA invested in unconventional assets? In that case, it’s probably wise to hire a professional to help manage those tasks.